THE RAMCO CEMENTS LIMITED ,DELHI vs. ACIT,CORPORATE CIRCLE, MADURAI

आदेश /O R D E R PER MAHAVIR SINGH, VICE PRESIDENT:

This appeal by the assessee is arising out of the final assessment order passed, in lieu of directions of the Dispute Resolution Panel-2, Bengaluru dated 24.01.2022, by the National Faceless Assessment Centre, Delhi for the assessment year 2017-18 u/s.143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter the ‘Act’), vide order dated 22.03.2022.

- 2 - IT(TP)A No.27/Chny/2022 2. At the outset, the ld.counsel for the assessee drew our attention to the petition dated 02.08.2023, wherein the assessee has raised additional ground that the impugned assessment order for the relevant assessment year 2017-18 dated 22.03.2022 is barred by limitation and for this, assessee has raised following ground:- “The impugned Assessment Order dated 22-3-2022 is barred by limitation by 22 days in as much as the Assessing Officer had passed Orders beyond the time limit specified in the Income Tax Act and as such the impugned Order is not valid in law.”

The ld.counsel for the assessee stated that it has come to the knowledge of the assessee by way of RTI information obtained from Income-tax Department on 30.05.2023 whereby it came to know that DRP order for the year was made available to the AO of National e-Faceless Assessment Centre (NeFAC) on 31.01.2022 itself and resultantly, in term of section 144C(13) of the Act, final assessment order ought to have been passed on or before 28.02.2022 whereas, in fact, it was passed only on 22.03.2022 after a delay of 22 days. Hence, the assessment order passed is time barred and void ab inito. The ld.counsel stated that all the facts related to above issue are available on record and also obtained by filing application under RTI Act and the response received is also attached. The ld.counsel for the assessee stated that this being purely a legal issue and matter does not require any verification of facts and can be decided

- 3 - IT(TP)A No.27/Chny/2022 on the basis of material already available on record and the matter goes to the root of the issue concerning the validity of the assessment itself, the additional ground be admitted and adjudicated upon.

- 4 - IT(TP)A No.27/Chny/2022 2017-18 on 30.11.2018. Subsequently, the assessee revised its return of income on 16.03.2019. The assessee company is engaged in the business of manufacture of cement, ready mix and dry mortal products. The assessee’s case was selected for complete scrutiny assessment under CASS on the basis of original return of income and accordingly, notices u/s.143(2) of the Act were issued and served electronically and the details (as noted in the assessment order) are as under:- Compliance S.No. Notices Issue Date Remark Date 1. 143(2) 23.08.2018 06.09.2018 No Compliance

The assessee time and again submitted required documents and made online submissions. The AO after verification of details and documents submitted online, noted that the assessee has entered into specified domestic transaction with its Associated Enterprises (AEs) for an amount of Rs.329,37,30,000/- and hence the case was referred to TPO u/s.92CA of the Act for determination of Arms

- 5 - IT(TP)A No.27/Chny/2022 Length Price (ALP) pertaining to specified domestic transactions entered into by the assessee after taking approval of the competent authority. The TPO passed an order u/s.92CA(3) of the Act vide No.ITBA/TPO/F/92CA3/2020-21/1030199264(1) dated 29.01.2021, wherein the AO computed Arms Length Price adjustment at Rs.64,83,26,167/- and ALP adjustment was made towards transactions of assessee with its AE’s. In response to TPO’s order dated 29.01.2021, the AO passed draft assessment order u/s.144C of the Act dated 26.04.2021 in which the AO made following additions:- 1. Addition on account of transfer pricing adjustment Rs.64,83,26,167/-. 2. Disallowance on account of deduction u/s 80(IA) of the Act of Rs.31,72,59,668/-. 3. Disallowance on account of provisions for bad and doubtful debts of Rs.33,41,182/-. 4. Disallowance on account of capital expenditure for power transmission line of Rs.86,03,389/-. 5. Disallowance on account of cash deposited during demonetization Rs.2,84,46,323/-.

In response to this draft assessment order, the assessee filed objections before Dispute Resolution Panel-2, Bengaluru by e-mail on 27.05.2021 and raised various objections and grounds. The assessee received DRP directions by e-mail on 31.01.2022 and assessee has filed the copy of e-mail in its paper-book at page 14, which reads as under:-

- 6 - IT(TP)A No.27/Chny/2022 Jagadish M Corp (SDGM- Systems )__________________________ From : BANGALORE.CIT.DRP2.3@INCOMETAX.GOV.IN Sent : 31 January 2022 21:03 To : Jagadish M Corp (SDGM- Systems ) Subject : [ITBA] Intimation Letter Attachments: the ramco cements AY 2017-18_202201311317.pdf; AABCM8375L_Intimation Letter_1039241927(1)_31012022.pdf

WARNING. The sender of the email could not be validated and may not match in the person "From" Field CAUTION : The email originated from out side of the organisation [Do not click links or open attachments unless you recognize the sender and known the content is safe.

Dear THE RAMCO CEMENTS LIMITED,

Please find attached the Intimation Letter for PAN:AABCM8375L

Please quote your PAN in all future correspondences.

Note: -This communication is computer generated and may not contain signature. - This communication may be treated as compliant with the requirements of Income Tax Rules 127 and 127A. - Signed copy may be sent separately if not already digitally signed. - Please quote your PAN in all communications. - Income Tax Department does not seek any taxpayer information like user name, password, details of ATM, credit cards, etc. Taxpayers are advised not to part with such information on the basis of emails. DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe.

- 7 - IT(TP)A No.27/Chny/2022 22.03.2022 is barred by limitation as the AO had passed order beyond the time limit specified in the Act and as such, the impugned assessment order is not valid in law. The ld.counsel stated that the assessee has received information from Income-tax Department under RTI on 30.05.2023 that the DRP order for the year was made available to the AO of NeFAC on 31.01.2022 itself. The ld.counsel for the assessee drew our attention to the RTI information obtained by the assessee from the AO i.e., the Assistant Commissioner of Income tax (HQ) & Secretary, Dispute Resolution Panel-2, Bengaluru, which reads as under:- GOVERNMENT OF INDIA INCOME TAX DEPARTMENT SECRETARIAT, DISPUTE RESOLUTION PANEL-2, BENGALURU 'A' Wing, 4th Floor, Kendriya Sadan, Koramangala, Bengaluru- 560034. Phone & Fax No.080-25505730. Email: bangalore.secretary.drp2@incometax.gov.in Date: 30.05.2023 F.No.52RTI/DRP-2/2023-24 PROCEEDINGS OF THE CPIO & ASSISSTANT COMMISSIONER OF INCOME TAX DRP-2, BENGALURU S.P. PREAM KAMEL Name and address of the applicant Shri T. Mathivanan, Sr. General Manager – Legal of M/s The Ramco Cements Ltd., No.91, Parasurama Eswaran Koil west mada street, Ayanavaram, Chennai, Tamil Nadu – 600023 Permanent Account Number AABCM8375L Assessment year 2017-18 Date of filing RTI application u/s 6(1) of RTI 08.05.2023 Act’ 2005 Date of receipt of RTI application u/s.6(1) of 11.05.2023 RTI act 2005 in this office Date of order 30.05.2023

- 8 - IT(TP)A No.27/Chny/2022 ORDER UNDER SECTION 7(1) OF RIGHT TO INFORMATION ACT' 2005 Shri. T Mathivanan, Sr. General Manager-Legal of M/s The Ramco Cements Ltd., residing at No.91. Parasurama Eswaran Koil west mada street, Ayanavaram, Chennai, Tamil Nadu- 600023. vide his application under the RTI Act, dated 08.05.2023 received in this office on l1.05.2023, sought information as under to which replies are given:

Sl.No. Information called for Response 1. On what date was the order it was sent by ITBA in dispatched to the AO, NFAC, Delhi. electronic mode only on- 31/01/2022 2. By what mode of communication was Electronically by way the order dispatched to NFAC, Delhi. 3. On what date was the communication This particular information is order received by the AO NFAC. not available with this office.

If the applicant is not satisfied with the RTI reply, applicant can appeal before the first Appellant Authority, within 30 days as per Section 19(1) of the RTI Act 2005. The address of the first Appellate Authority is as below.

The Chief Commissioner of Income tax (Intl.Taxation) (South Zone), C.R. Building, Queens Road, Bangalore-560001, Sd/- (S.P. Pream Kamel) Assistant Commissioner of Income tax (HQ) & Secretary Dispute Resolution Panel-2, Bengaluru. To: Shri T. Mathivanan, Sr. General Manager – Legal of M/s. The Ramco Cements Ltd. No.91, Parasurama Eswaran Koil West Mada Street, Ayanavaram, Chennai, Tamil Nadu – 600023.

- 9 - IT(TP)A No.27/Chny/2022 (Income-tax Business Account) by way of intimation letter. According to ld.counsel, this is an intimation to assessee as well as the AO. He stated that once the AO has received the DRP order on 31.01.2022, he is bound to pass the final assessment order u/s.144C(13) of the Act on or before 28.02.2022 but in fact, it was passed only on 22.03.2022 thereby, there is a time barred assessment order by 22 days.

"(13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained in section 153, the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received."

He stated that Provisions of section 144C(13) of the Act lays strong emphasis on the receipt of theorder. The provision has used receipt and received, which gives no scopefor any further interpretation except the time limit starts from the date ofreceipt of the directions from DRP. The Provisions of section 144C(12) of the Act states that:-

- 10 - IT(TP)A No.27/Chny/2022 "(12) No direction under sub-section (5) shall be issued after nine months from the end of the month in which the draft order is forwarded to the eligible assessee.

The ld. CIT-DR stated that though in this section "No directions shall be issued…" is used, the statute has chosen to use the receipt of direction in section 144C(13) of the Act instead of reckoning the date from date of issue of directions by DRP.Reading of Provisions of section 144C(12) and 144C(13) of the Act together left no scope to other interpretations except only one, that the time limit starts only when the A.O receives the DRP directions.Letters were sent to DRP and to the jurisdictional AO to ascertain as to when the Directions of DRP were received by the Faceless AO. Reply was received from DRP on 24-08-2023 and the same is attached asAnnexure-1, which is reproduced as under:- GOVERNMENT OF INDIA INCOME TAX DEPARTMENT SECRETARIAT, DISPUTE RESOLUTION PANEL-2, BENGALURU 'A' Wing, 4th Floor, Kendriya Sadan, Koramangala, Bengaluru- 560034. Phone & Fax No.080-25505730. Email: bangalore.secretary.drp2 @incometax.gov.in F.No.52/DRP-2/BANG/2023-24 Date: 18.08.2023

To, The Commissioner of Income tax, (DR)-1, ITAT, II Floor, ‘B’ Block Rajaji Bhavan, Besant Nagar, Chennai – 60009.

Sir,

- 11 - IT(TP)A No.27/Chny/2022 Sub: Report on additional ground of appeal filed by M/s. The Ramco Cements Limited (PAN: AABCM8375L) A.Y. 2017-18 - reg. Ref : Your office letter in F.No. D Bench/IT(TP)A 39/CHNY/2023, dated: 10.08.2023. ***** Please refer to the above. 1. It is humbly submitted that in the case of M/s The Ramco Cements Ltd (PAN : AABCM875L) for AY 2017-18, the DRP directions were uploaded to ITBA portal on 31.01.2022( 1TBA screenshot enclosed). 2. Further, on the same day i.e 31.01.2022, the directions were also uploaded through common functionality in ITBA for NeFAC, Delhi. 3. Regarding successful delivery of directions to AO (in this case AO , NeFAC), it is brought to your goodself’s knowledge that there is no functionality in ITBA through which this office can track the delivery of the directions uploaded through common functions module for NeFAC, Delhi.

Yours faithfully

Sd/- (S.P. Pream Kamel) Assistant Commissioner of Income tax (HQ) & Secretary Dispute Resolution Panel-2, Bengaluru.

Attention is drawn to point no. 2 of the reply wherein it is stated that the directions were uploaded through common functionality in ITBA for NeFAC, Delhi on 31.01.2022. Ld CIT DR argued that it is pertinent to mention that in the Faceless Assessment Scheme all the communications to the Faceless Assessing Officer is routed through NeFACDelhi. No communication either from or to the faceless AO can take place directly. Attention is further drawn to point 3 of the reply received wherein it is stated that regarding successful delivery of directions to AO (in this case AO, NeFAC),

- 12 - IT(TP)A No.27/Chny/2022 there is no functionality in ITBA through which this office can track the delivery of the directions uploaded through common functions module of ITBA.Further, the AO in his reply, attached the order sheet/Log downloaded from ITBA, wherein it is clearly recorded that the directions were received by the the Faceless AO on 03-02-2023. It is pertinent to mention here that it is a system generated log, no manual intervention or feeding of data is possible at the end of the Assessing Officer.From the above submissions the following is brought to the consideration of the bench:- a) DRP directions were uploaded for NeFAC, Delhi on 31-01-2022 b) Directions were received by the Faceless Assessing officer on 03-02- 2022. c) As the directions were received on 03-02-2022 the time limit available to pass the final assessment order was 31-03-2022. d) The final assessment order was passed on 22-03-2022 is well within the due date and hence valid.

Hence, it was prayed that the additional ground filed by the assessee may berejected and the case may be decided on merits.

- 13 - IT(TP)A No.27/Chny/2022 on 24.01.2022 to the AO of National e-Assessment Centre, Delhi. Admittedly, the DRP directions were received by the AO of NeFAC, Delhi because it was sent through electronic mode only on 31.01.2022. This information is very much available in the RTI information obtained by the assessee vide order passed u/s. 7(1) of the RTI Act, 2005 dated 30.05.2023. We also noted from the letter issued by the Secretariat, Dispute Resolution Panel-2, Bengaluru in F.No.52/DRP-2/BANG/2023-24 dated 18.08.2023 whereby it is clearly admitted that the DRP directions in the case of M/s. The Ramco Cements Ltd,(PAN: AABCM8375L, mentioned as AABCM875L) for AY 2017-18 were uploaded to ITBA portal on 31.01.2022 and on the same date i.e., 31.01.2022, the directions were also uploaded through common functionality in ITBA for NeFAC, Delhi. The only argument of ld.CIT-DR is that there is no functionality in ITBA through which the office of the DRP can track the delivery of the directions uploaded through common functionality of NeFAC, Delh. We are not in agreement with the argument of the ld.CIT-DR, because the order uploaded on ITBA and through ITBA, it is uploaded on common functionality in ITBA for NeFAC, Delhi is to be considered as the date of receipt i.e., 31.01.2022. Hence in our view, the final assessment order should have been passed by the AO on or before 28.02.2022 whereas actually final assessment order

- 14 - IT(TP)A No.27/Chny/2022 was passed by the Revenue on 22.03.2022, which is barred by limitation by 22 days. Hence, we are of the view that this final assessment order is clearly barred by limitation and hence, void ab initio. Hence we quash the final assessment order and allow the appeal of the assessee on this additional ground alone.

Order pronounced in the open court on 20th October, 2023 at Chennai.

Sd/- Sd/- (महावीर िसंह ) (मनोज कुमार अ�वाल) (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) उपा�� /VICE PRESIDENT लेखा सद�/ACCOUNTANT MEMBER चे�ई/Chennai, िदनांक/Dated, the 20th October, 2023 RSR आदेश की �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु� /CIT 4. िवभागीय �ितिनिध/DR 5. गाड� फाईल/GF.