MARVELL INDIA PRIVATE LIMITED,BENGALURU vs. DCIT, CIRCLE-4(1)(1), BANGALORE

ITTPA 115/BANG/2023Status: DisposedITAT Bangalore25 May 2026AY 2017-1819 pages
AI SummaryAllowed

What were the facts?

The assessee, Marvell India Pvt. Ltd., is appealing an order passed by the DCIT, Circle 4(1)(1), Bengaluru, for Assessment Year 2017-18. The initial assessment proceedings involved transfer pricing adjustments proposed by the TPO amounting to Rs. 13,32,47,187. The AO passed a draft assessment order on February 16, 2021, incorporating these adjustments. The assessee filed objections before the DRP. Subsequently, the AO issued a show cause notice on April 15, 2021, which included corporate tax adjustments not present in the draft order. The final assessment order dated April 26, 2021, was passed without awaiting DRP directions, including both transfer pricing and corporate tax additions. This order was quashed by the Karnataka High Court, which directed the DRP to reconsider the assessee's objections. Following fresh DRP directions on November 28, 2022, which only addressed transfer pricing, the AO passed a final assessment order on December 29, 2022, again including corporate tax additions.

What did the Tribunal hold?

The Tribunal held that the Assessing Officer (AO) acted in clear violation of Section 144C of the Income-tax Act, 1961, by making corporate tax additions of Rs. 10,89,81,456 in the final assessment order dated December 29, 2022. The DRP's directions, issued on November 28, 2022, only pertained to transfer pricing adjustments and did not include any directions regarding corporate tax issues. The Tribunal emphasized that the AO is bound by the directions issued by the DRP under Section 144C(10) and is required to pass the assessment order in conformity with these directions under Section 144C(13). Making additions in the absence of any such directions from the DRP renders the entire additions of Rs. 10,89,81,456 illegal and bad in law. Consequently, these additions are liable to be deleted. The Tribunal also noted that a subsequent draft assessment order dated April 15, 2021, which proposed only corporate tax additions, had already been quashed. The principle is that the AO cannot introduce new additions in the final assessment order that were not part of the draft assessment order or not directed by the DRP.

What were the issues?

1. Whether the Assessing Officer (AO) erred in making corporate tax additions of Rs. 10,89,81,456 in the final assessment order dated December 29, 2022, when such additions were not proposed in the draft assessment order dated February 16, 2021, thereby violating Section 144C of the Income-tax Act, 1961? (Question of law and fact) 2. Whether additions totaling Rs. 10,89,81,456 made in the final assessment order were without any basis or information and without considering the assessee's rectification application? (Question of law and fact) Assessee's Contentions: - The AO acted in excess of jurisdiction by assessing corporate tax additions that were not part of the draft assessment order, citing Section 144C. - Any adjustment made in the final assessment order without being raised in the draft assessment order is contrary to the scheme of Section 144C and is a nullity. - The additions made in the final assessment order lacked basis or supporting information and were made without considering the rectification application. Revenue's Contentions: - The judgment records no specific contentions for the revenue on these specific grounds.

Which sections of the Income-tax Act were involved?

Section 144C,Section 143(3),Section 92CA,Section 144C(1),Section 144C(5),Section 144C(6),Section 144C(8),Section 144C(10),Section 144C(13)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C’’BENCH: BANGALORE

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

For Appellant: Shri Mukesh Bhutani, A.R
For Respondent: Dr. Divya K.J., CIT D.R
Hearing: 12.03.2026Pronounced: 25.05.2026

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of ld. DCIT Circle 4(1)(1), Bengaluru dated 29.12.2022 vide DIN & Order No. ITBA/AST/S/143(3)/2022-23/1048343764(1) passed u/s 143(3) r.w.s. 260 of the Income Tax Act, 1961 (in short “The Act”) for the assessment year 2017-18. 2. The assessee has raised the following grounds of appeal:

IT(TP)A No.115/Bang/2023 Marvell India Pvt. Ltd., Bengaluru IT(TP)A No.115/Bang/2023 Marvell India Pvt. Ltd., Bengaluru IT(TP)A No.1

The order continues below.

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