POSCO INDIA PROCESSING CENTRE PVT. LTD.,,CHENNAI vs. DCIT, CORPORATE CIRCLE-5(2),, CHENNAI

ITTPA 13/CHNY/2020Status: DisposedITAT Chennai05 February 2025AY 2013-1421 pages
AI SummaryAllowed

What were the facts?

The assessee, M/s. POSCO India Processing Centre Pvt. Ltd., is in appeal against the assessment order dated 22.11.2019 passed by the Assessing Officer (AO) for Assessment Year 2013-14. The case involved transfer pricing adjustments. After an initial assessment order and subsequent directions from the Tribunal, the AO referred the matter back to the Transfer Pricing Officer (TPO). The TPO passed an order on 29.10.2018 proposing an adjustment of Rs. 10,49,39,548/-. Subsequently, the AO passed an assessment order on 30.12.2018, which he later clarified via a corrigendum dated 23.01.2019 to be treated as a draft assessment order. The assessee filed objections before the Dispute Resolution Panel (DRP), which were rejected. The AO then passed the final assessment order on 22.11.2019.

What did the Tribunal hold?

The Tribunal held that the Assessing Officer (AO) erred in law by passing the assessment order dated 30.12.2018 along with a demand notice without first issuing a draft assessment order as required by Section 144C(1) of the Income Tax Act, 1961. This omission rendered the assessment order wholly without jurisdiction and unenforceable. The Tribunal further held that the subsequent corrigendum issued on 23.01.2019, attempting to treat the earlier order as a draft, was beyond the limitation period prescribed under Section 153(3) read with Section 153(5) of the Act, which expired on 31.12.2018. Consequently, the corrigendum and all subsequent actions, including the DRP's directions and the AO's final assessment order dated 22.11.2019, were also considered without jurisdiction and bad in law. The Tribunal relied on the jurisdictional High Court's decision in Vijay Television Pvt. Ltd. and other precedents. The assessment order dated 30.12.2018 and the demand notice dated 30.12.2018 were quashed as nullities. The appeal was allowed on the legal issue, rendering other issues academic.

What were the issues?

1. Whether the AO erred in law by passing the final assessment order dated 30.12.2018 without issuing a draft assessment order as contemplated under Section 144C(1) of the Income Tax Act, 1961, thereby vitiating the assessment. Assessee's Contention: The AO's omission to issue a draft assessment order rendered the assessment order dated 30.12.2018 bad in law. The subsequent corrigendum dated 23.01.2019, treating the earlier order as a draft, was time-barred under Section 153(3) read with Section 153(5) of the Act, as the statutory timeline lapsed on 31.12.2018. Therefore, the corrigendum and subsequent actions were a nullity. The assessee relied on decisions including Vijay Television P. Ltd. v. DRP & ACIT, Zuari Cement Ltd., and Nokia India Pvt Ltd. Revenue's Contention: The omission, if any, was cured by the AO's subsequent action of issuing a corrigendum on 23.01.2019, and the assessee's subsequent filing of objections before the DRP. Therefore, the final assessment order dated 22.11.2019 was valid.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 254,Section 92CA(4),Section 144C(5),Section 115JB,Section 144C(1),Section 153(3),Section 153(5),Section 156

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & SHRI AMITABH SHUKLA

Hearing: 12.12.2024Pronounced: 05.02.2025

PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the assessment

order of the AO dated 22.11.2019 passed u/s.143(3) r.w.s.254

r.w.s.92CA(4) r.w.s.144C(5) of the Income Tax Act, 1961 (hereinafter in short "the Act”).

2.

The assessee has raised a legal issue, which will be dealt with first

and the relevant facts for adjudicating this issue ar

The order continues below.

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