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Income Tax Appellate Tribunal, MUMBAI BENCH “K ”, MUMBAI
आदेश/ ORDER
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the assessment order dated 17/03/2022 passed u/s. 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 [in short 'the Act']. The assessee in appeal has assailed Transfer Pricing(TP) adjustments as well as addition on Corporate Tax issues.
Shri Nikhil Tiwari appearing on behalf of the assessee stated at the outset that ground No.1 to 9 of the appeal relating to T.P adjustment has become academic as the T.P issues have already been settled in Transfer Pricing Agreement(TPA). Thus, the ld. Authorized Representative for the assessee confined his submissions in respect of corporate tax issues in ground No.10 to 17 of appeal.
The ld. Authorized Representative for the assessee submits that the single issue assailed in ground No.10 to 16 of the appeal is with respect to addition of Rs.374,41,07,380/- pertaining to foreign remittances made by assessee / appellant. The ld. Authorized Representative for the assessee submits that while passing the draft assessment order dated 01/05/2021 the Assessing Officer made addition of Rs.374,41,07,380/- on account of foreign remittances allegedly made by the assessee. The assessee filed objections before the Dispute Resolution Panel (DRP). Along with objections the assessee furnished details and the documents including party wise list of foreign remittances made during the relevant period. The assessee categorically stated that during the period relevant to the assessment year under appeal the assessee had foreign remittances amounting to Rs.174,79,17,354/- only. The DRP after taking cognizance of the documents furnished by the assessee during DRP proceedings directed the Assessing Officer to verify the foreign remittances made by the assessee and thereafter, decided the issue as per the provisions of the Act. Before the Assessing Officer the assessee again furnished various documents including:
(i) Summary of chart capturing facts and contentions of the assessee /appellant as Annexure -3.
(ii) Tabulation giving details of foreign remittances made during the year amounting to Rs.174,79,17,354/- - Annexure -4.
(iii) Copies of Form No.15CA/CB in relation to the foreign remittances - Annexure -5.
(iv) Sample copies of invoices in respect of transactions entered into with various non-resident entities. Annexure -6.
(v) Copies of financial statement for the year ended 31/03/2017 – Anneuxre-7 The ld. Authorized Representative for the assessee submits that it was specifically pointed to the Assessing Officer that only sample copies of Form - 15CA/CB are filed as the data is voluminous. The soft copies of remaining Form 15CA/CB are available. The Assessing Officer without examining the documents furnished by the assessee as directed by the DRP passed the assessment order confirming addition of Rs.3,74,41,07,380/-. The ld. Authorized Representative for the assessee asserted that the Assessing Officer has violated the directions of the DRP. The Assessing Officer had issued notice to the assessee on 09/03/2022. The assessee filed reply thereto on 11/03/2022. The Assessing Officer passed the impugned order on 17/03/2022. Thus, the Assessing Officer had sufficient time to examine the documents filed by the assessee. He further pointed that the Assessing Officer in the impugned order has mentioned that the data submitted by the assessee is majorly in the form of Form 15CA, therefore, nothing could be verified. The said observations of the Assessing Officer is contrary to the documents furnished by the assessee. Apart from Form 15CA the assessee had furnished copies of sample invoices, relevant to the financial statement and the details of foreign remittance during the relevant period. The ld. Authorized Representative for the assessee further pointed that the assessee vide letter dated 10/04/2021 had requested the Assessing Officer to provide the copies of Form 15CA, based on which addition has been made. However, the Assessing Officer never supplied the copies of Form 15CA to the assessee. The ld. Authorized Representative for the assessee placed reliance on the decision in the case of ESPN Star Sport Mauritius S.N.C ET Compagine vs. Union of India , 388 ITR 383 (Del) to contend that the Assessing Officer was duty bound to pass the assessment order in accordance with the directions of the DRP. In case the Assessing Officer fails to comply with the directions of the DRP, the order passed by Assessing Officer is without jurisdiction.
Per contra, Dr. Yogesh Kamat representing the Department vehemently defended the impugned assessment order. The ld. Departmental Representative submits that during the draft assessment proceedings, the assessee failed to furnish any document whatsoever in respect of foreign remittance. Repeated notices were given to the assessee to make submissions on the issue, however, the assessee failed to submit single document in this regard. Therefore, the nature of remittance made by assessee could not be established. The Assessing Officer had no other option but to make the addition. At the time of passing final assessment order, the Assessing Officer had examined the documents filed by the assessee and thereafter, made the addition. The ld. Departmental Representative prayed for confirming the assessment order and dismissing the grounds raised by the assessee assailing the addition.
We have heard the submissions made by rival sides and have examined the orders of authorities below. The solitary issue for adjudication before us is with respect to addition on account of foreign remittance. A bare perusal of the draft assessment order dated 01/05/2021 shows that no submissions or documents whatsoever were filed by the assessee before the Assessing Officer in respect of foreign remittance. In proceedings before the DRP, the assessee filed various documents which inter-alia includes details of foreign remittance amounting to Rs.147,79,17,354/-, copy of financial statement for the year ended 31/03/2017. On the basis of the documents and submissions furnished by the assessee, the DRP directed the Assessing Officer to re-examine foreign remittance.
The primary contentions of the assessee is that during the period relevant to the assessment year under appeal the assessee had made foreign remittance only to the tune of Rs.147,79,17,354/- and not Rs.386,40,53,228/- as mentioned by the Assessing Officer. We find that while passing assessment order consequent to the direction of the DRP, the Assessing Officer has failed to examine the documentary evidences filed by the assessee. The Assessing Officer merely on the basis of Form 15CA made the addition of Rs.374,41,07,380/-. No effort was made by the Assessing Officer to verify and examine documents furnished by the assessee in support of its claim. The Assessing Officer was duty bound to carry out the verifications and examine the documents furnished by the assessee in compliance with the directions of the DRP. In our considered opinion, it was incumbent upon the Assessing Officer to examine and verify the documents furnished by the assessee. The Assessing Officer failed in his duty to give effect to the directions of the DRP.
Hence, to the extent the Assessing Officer has failed to comply with the directions of the DRP, the assessment order is without jurisdiction. Consequently, the assessee succeeds on ground No.10 to 16 of the grounds of appeal.
7. In ground No.17 of the appeal the assessee has assailed initiation of penalty proceedings u/s. 270 A of the Act. Challenge to penalty proceedings is premature at this stage hence, ground No.17 of the appeal is dismissed as such.
8. Both sides are unanimous in stating that ground No.1 to 9 of the appeal relating to TP adjustment have become academic as they are covered under TPA, hence, these grounds are not deliberated upon.
In the result, appeal by the assessee is partly allowed in the aforesaid terms.