M/S UT WORLDWIDE (INDIA) PVT LTD.,MUMBAI vs. DY CIT 11 (1)(2), MUMBAI

INCOME TAX APPELLATE TRIBUNAL MUMBAI „K‟ BENCH, MUMBAI [Coram: Pramod Kumar, Vice President and, Pavan Kumar Gadale, Judicial Member] ITA No.: 7597/Mum/2019 Assessment year: 2015-16 DSV Solutions Pvt Ltd …………………….. Appellant (formerly known as UT Worldwide India Pvt Ltd) A 203, The Cube CTS No. 1489, A/2 MV Road Marol, Andheri (East), Mumbai 400 020 [PAN: AAACU5306L] Vs. Deputy Commissioner of Income Tax Circle 11(1)(2), Mumbai ………………….Respondent Appearances: J D Mistry, Sr Advocate, along with Paras Savla and Harsh Shah for the appellant Dr Yogesh Kamat and Soumendu Kumar Dash for the respondent Date of concluding the hearing : 26/08/2022 Date of pronouncing the order : 09/11/2022

O R D E R Per Pramod Kumar, VP: 1. By way of this appeal, the assessee appellant has challenged the correctness of the order dated 29th October 2019, passed by the Assessing Officer under section 143(3) read with section 144C(13) of the Income Tax Act, 1961, for the assessment 2015-16.

3. The issue in appeal lies in a very narrow compass of material facts. The assessee before us is engaged in the business of air and ocean and freight forwarding, warehousing and clearing agent, the assessee has entered into a number of international transactions with its associated enterprises abroad, and that, as a consequence of the order passed under section ITA No.: 7597/Mum/2019 Assessment year: 2015-16 Page 2 of 7 92CA(3), the returned income of the assessee was proposed to be, by the Assessing Officer, subjected to variations prejudicial to the interests of the assessee. There is no dispute that the assessee was an „eligible assessee‟ in terms of the provisions of Section 144C, and that the Assessing Officer was under an obligation to “forward a draft order of proposed assessment (hereafter in this section referred to as „draft assessment order) to the eligible assessee”, i.e. the assessee before us. There is also no dispute that in terms of the provisions of Section 153 read with Section 144C, such a draft order was required to be forwarded to the assessee on or before 31st December 2018. The short case of the assessee was that since the Assessing Officer dd not “forward” the draft assessment order on or before that date, the impugned assessment order is time-barred. There was a change of address in this case, and the assessee, vide letter dated 25th May 2018, intimated the new address to the Assessing Officer. A copy of this intimation was also placed before us at page 755 of the paper-book. As evident from the notice dated 25th October 2018, issued under section 142(1), the assessee even acted upon the said intimation, as the notice was sent at the new address. A copy of this notice is also placed before us at pages 736 and 737 of the paper-book. It appears that the Assessing Officer passed two draft assessment order, both dated 10th December 2018, but both of these draft assessment orders contained the old address of the assessee, and, to this extent, the intimation regarding change of address was not given effect. The first draft assessment order, containing two additions to the returned income, is said to have been served upon the assessee on 16th January 2019 through the speed post. The second draft assessment order, containing three additions to the retuned income, is said to have been served upon the assessee, in its office, on 12th February 2019. None of these draft assessment orders was, according to the assessee, was forwarded by the Assessing Officer to the assessee within the permissible time limits. These orders were thus claimed to be time barred. Aggrieved by these two different draft assessment orders, the assessee had filed a writ petition before the Hon‟ble Bombay High Court on certain legal aspects, and had also filed objections before the Dispute Resolution Panel on certain factual aspects. When the matter came up for consideration before the Hon‟ble High Court, Their Lordships held that the assessee should pursue its remedy before the Dispute Resolution Panel and dismissed the writ petition. Thereupon, some additional issues were also raised before the DRP. The DRP, however, dismissed the objections raised before them and held that (i) the second draft assessment order was void ab initio and, as such, there was no need to deal with the matter on merits vis-à-vis the second draft assessment order; (ii) the date of service of the first draft assessment order was 4 January 2019, and not 16 January 2019, and, as a corollary thereto, the objections filed by the assessee, before the DRP, o 15 February 2019 were time-barred; (iii) the DRP had no powers to condone the delay in filing of objections before the DRP; and (iv) the Assessing Officer is to go ahead with the passing of assessment order in terms of the provisions of Section 144C(15) of the Act. The finding # (ii) is essentially based on the claim of the Assessing Officer, which is denied by the assessee, that the the draft assessment order was served personally on the assessee‟s employee on 4th January 2019. To the limited extent above, this stand of the Assessing Officer has been accepted by the DRP on the ground that the acknowledgement shows the signatures of one G R Apte, Manager Taxation of the ITA No.: 7597/Mum/2019 Assessment year: 2015-16 Page 3 of 7 company, and Mr Apte has not filed, despite having been given the opportunity for the same, any affidavit to deny the same. The Assessing Officer thus proceeded to pass the final assessment order based on the first draft assessment order. The assessee is aggrieved and is in appeal before us.

4. This matter is heard on the short ground of limitation, but the hearing has been spread over several sessions, and the Assessing Officer has been given ample opportunities to demonstrate how the requirements of the time limit for forwarding the draft assessment order have been complied with. The reports from field officers have also been called on more than one occasion. We have taken into account all these inputs, as also submissions of the parties. We have heard the rival submissions, perused the material on record and duly considered the facts of the case in the light of the applicable legal position.

5. In our considered view, the short and specific question which requires our consideration is whether, on the facts and in the circumstances of the case, the Assessing Officer can be said to have “forwarded” the draft assessment order within the prescribed time limit, i.e. on or before 31st December 2018. The stand of the Assessing Officer is that as the Assessing Officer had sent the draft assessment order to the assessee on 10th December 2018, even though at the old address, the Assessing Officer had ”forwarded” the draft assessment order within the prescribed time limit. As for the draft order being sent to the old address, the stand of the Assessing Officer, in reports dated 10th February 2022 is that the address was taken as in the PAN database as on the date of order, and the assessee could not be aggrieved of the old address being used as the assessee had updated the PAN database only on 2nd January 2019. In the report dated 10th March 2022, the Assessing Officer, however, takes the stand that “due to time barring pressures, it (the old address) might have been mentioned due to oversight”. We have also noted that the Assessing Officer nevertheless does not dispute that the notice dated 25th October 2018, issued by him under section 142(1), was on the new address, and, in response to our specific question, it is also submitted that the address on the assessment order is not a system generated order, and, in that sense, the mere fact of non- updation of database does not result being used as the default address. In any case, as rightly pointed out by the learned counsel, proviso to rule 127 (2) specifically provides that the address given database ceases to be applicable when an assessee, when the assessee “furnishes in writing any other address for the purposes of communication to the income-tax authority or any person authorised by such authority issuing the communication”. While rule 127(1) of the Income Tax Rules 1962 provides that “for the purposes of sub-section (1) of section 282, the addresses (including the address for electronic mail or electronic mail message) to which a notice or summons or requisition or order or any other communication under the Act (hereafter in this rule referred to as "communication") may be delivered or transmitted shall be as per sub-rule (2)”, sub-rule 2 provides as follows: (2) The addresses referred to in sub-rule (1) shall be—

ITA No.: 7597/Mum/2019 Assessment year: 2015-16 Page 4 of 7 (a) for communications delivered or transmitted in the manner provided in clause (a) or clause (b) of sub-section (1) of section 282— (i) the address available in the PAN database of the addressee; or (ii) the address available in the income-tax return to which the communication relates; or (iii) the address available in the last income-tax return furnished by the addressee; or (iv). in the case of addressee being a company, address of registered office as available on the website of Ministry of Corporate Affairs:

Provided that the communication shall not be delivered or transmitted to the address mentioned in items (i) to (iv) where the addressee furnishes in writing any other address for the purposes of communication to the income-tax authority or any person authorised by such authority issuing the communication:

[Emphasis, by underlining, supplied by us]

“On a perusal of tracking details of the consignment # EM 991898789IN, which admittedly contained the draft assessment order, we find that it was not served on the assessee, and was returned to the sender on 19.12.2018 at 18.13.25. When the learned Departmental Representative was confronted with the above position

ITA No.: 7597/Mum/2019 Assessment year: 2015-16 Page 5 of 7 and was asked to clarify the position, he further sought two weeks to ascertain the correct position and make his submissions.

Learned Sr Counsel does not oppose the request of the DR. Adjourned to 8th April 2022. In case learned DR has nothing to controvert the post office records indicating the draft assessment order being returned to the Assessing Officer and to demonstrate any further efforts to „forward‟ the draft assessment order before 31st December 2018, the hearing of the appeal will be concluded on this short point itself. No further adjournments.”