MULTICOREWARE INDIA PVT. LTD.,CHENNAI vs. ITO, CORPORATE WARD-4(1), CHENNAI

आयकर अपीलीय अधिकरण, ’डी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI श्री एबी टी. वर्की, न्यायिर्क सदस्य एवं श्री अयिताभ शुक्ला, लेखा सदस्य के समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ Assessment Years: 2021-22 Multicoreware India Pvt Ltd., Income Tax Officer, Plot No.1, No.9, 3rd Street, Corporate Ward-4(1), Elango Nagar, Chennai. Virugambakkam, Chennai-600 092. [PAN: AAICM2321B] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent)

अपीलार्थी की ओर से/ Assessee by : Mr.Arjun Raj, Advocate प्रत्यर्थी की ओर से /Revenue by : Mr.ARV Sreenivasan, CIT सुनवाई की तारीख/Date of Hearing : 24.09.2025 घोषणा की तारीख /Date of Pronouncement : 21.11.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M :

This appeal is filed by the assessee against the order bearing DIN & Order No.ITBA / AST / S / 143(3) / 2024-25 / 1073821729(1) dated 28.02.2025 of the Learned Assessing Officer, for the assessment year 2021-22 passed in compliance to directions vide F.No.372/DRP- 2/Bang/2023-24 dated 10.09.2024 of the Ld.DRP. The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time.

2.0 The appellant assessee is contesting the order u/s 143(3) r.w.s. 263 r.w.s.144B dated 28.02.2025 both on legal grounds as well as on the merits of the case. The order dated 28.02.2025 supra has been passed in accordance with directions of the DRP dated 10.09.2024. On the issue of legal grounds, it is the case of the assessee that the orders have been passed beyond the prescribed timelines and had therefore got time barred. The Ld.Counsel argued that the impugned orders were therefore a nullity in law. 3.0 Per contra, the Ld. DR would like to place reliance upon the order of lower authorities. 4.0 We have heard the rival submissions in the light of material available on records. The brief factual matrix of the case is that the appellant assessee is engaged in software solutions and IT enabled services and is operating from SEZ Zone. Return of income for the year under consideration declaring total income of Rs.57,13,650/- was filed. As the case involved international transactions with overseas associate enterprises (AEs), a reference was made u/s 92CA for determination of arm’s length price to the Ld.Transfer Pricing Officer (TPO). An upward adjustment of Rs.5,73,59,243/- was recommended by the Ld.TPO. Draft order u/s 144C was issued to the assessee on 28.12.2023 to consider accepting the same or contest before the Dispute Resolution Panel (DRP). The assessee filed its objections before the DRP on 12.01.2024 Page - 2 - of 6 which were not known to the NAFAC, the apex body coordinating electronic assessment for Revenue authorities. Unaware of the same, the Ld.AO proceeded to complete the assessment determining total income of the assessee at Rs.6,33,81,879/- u/s 143(3) r.w.s. 144C(3) r.w.s.144B vide order dated 13.02.2024. Aggrieved, the assessee approached Hon’ble Madras High Court which vide its order dated 23.03.2024, quashed the order dated 13.02.2024 with the directions to the Ld.AO to await DRP directions before passing fresh assessment order. The DRP passed its order u/s 144C(5) dated 10.09.2024 confirming the adjustments proposed by the Ld.TPO. 5.0 Appellant assessee has argued that directions of the DRP u/s 144C(5) dated 10.09.2024, were conveyed to the Ld.AO and therefore within the meanings of the section 144C(4) , the Ld.AO was required to have completed the assessment within one month from the end of the month in which the directions of the DRP were received. Thus, in the instant case, the impugned date has been identified as 31.10.2024. The Ld.Counsel has argued that the order in the instant case u/s 143(3) was passed on 28.02.2025 and was therefore a time barred order. The Ld.Counsel has, through an extensive paper book placed before us, inter- alia, a screen shot of an email communication dated 10.09.2024 being an email from the ACIT(Headquarter) and secretary DRP-2 Bangalore indicating that the DRP directions were conveyed on said date to the Page - 3 - of 6 Ld.AO. A perusal thereof indicates that copies were endorsed to the Ld.AO (through email ITO, C4.1@incometax.gov.in) and Ld.TPO (through email TPO2.2@incometax.gov.in). The Ld.Counsel for the assessee has also placed on record order dated 20.09.2024 of the Ld.TPO which was passed post issuance of DRP directions dated 10.09.2024. 6.0 We have noted that the provisions of the statute are crystal clear. Thus, section 144C concerning action to be taken in cases involving directions of DRP reads as under:- “….144C. (1) The Assessing Officer shall, notwithstanding anything to the con- trary contained in this Act, in the first instance, forward 62 a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation 63[***] which is prejudicial to the interest of such assessee. ------------------------------------------------------------------------------------------------------------------ ----------------------------------------------------------------------------------------------------------- (3) The Assessing Officer shall complete the assessment on the basis of the draft order, if- (a) the assessee intimates to the Assessing Officer the acceptance of the variation; or (b) no objections are received within the period specified in sub-section (2). (4) The Assessing Officer shall, notwithstanding anything contained in section 15364[or section 153B], pass the assessment order under sub-section (3) within one month from the end of the month in which,- (a) the acceptance is received; or (b) thpperiod of filing of objections under sub-section (2) expires.

7.0 A perusal of the section 144C(4) clearly mandates that the Ld.AO is required to conclude the assessment within one month from the end of the month in which the DRP directions have been received. It is an undisputed fact on record that the DRP directions dated 10.09.2024 Page - 4 - of 6 were received by the Ld.AO, electronically on 10.09.2024 itself. It is a settled principle of law that electronic communications being emails etc have been recognized as an evidence under the Evidence Act. Thus, the email communication to the Ld.AO dated 10.09.2024 conveying DRP directions constituted a valid peace of evidence under the Evidence Act. The timeline for the Ld.AO under section 144C(4) would therefore commence from 10.09.2024. The Ld.AO was required to have passed the order on or before 31.10.2024. The argument of the Ld.DR from the Revenue that the order was passed in consonance to decision of Hon’ble Madras High Court in assessee’s Writ Petition and hence the timelines under section 144C(4) would not apply is unmaintainable since Hon’ble High Court had directed the Ld.AO to pass assessment order after obtaining the DRP directions. With due deference to the Hon’ble High Court, the impugned directions would not constitute extending the statutory timelines prescribed under section 144C(4) of the Act. There is nothing in the order of the Hon’ble High court that the said timelines were extended. Accordingly, we are of the considered view that the order u/s 143(3) dated 28.02.2025 is time barred and therefore a nullity in law. The orders of lower authorities are therefore set aside and the order u/s 143(3) dated 28.02.2025 is therefore quashed. The legal grounds of appeal raised by the assessee are therefore allowed.

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8.0 As the assessee has succeeded in the legal grounds, challenging the validity of the assessment order, all other grounds raised by the assessee qua merits of the addition have become academic and hence left open. 9.0 In the result, the appeal of the assessee is allowed. Order pronounced on 21st , November-2025 at Chennai.

Sd/- Sd/- (एबी टी. वर्की) (अधमताभ शुक्ला) (ABY T VARKEY) (AMITABH SHUKLA) न्याधयक सदस्य / Judicial Member लेखा सदस्य /Accountant Member चेन्नई/Chennai, धदनांक/Dated: 21st , November-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Chennai/Coimbatore/Madurai/Salem. 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF

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