SHV ENERGY PRIVATE LIMITED.,HYDERABAD. vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-3(1)., HYDERABAD.

Brief facts of the case are that the assessee is a company engaged in the business of import, bottling and distribution of liquefied petroleum gas and related items. For the assessment year 2009-10 they have filed their return of income on 30/09/2009 declaring an income of Rs.13,09,36,598/- and after set off of brought forward business losses declared nil income. Assessment under section 143(3) read with section 144C (5) and 144C(13) of the Act was complete by order dated 01/11/2013 where under the learned Assessing Officer made transfer pricing adjustment to the tune of Rs.2,64,46,046/-, against which the assessee filed an appeal before the Tribunal, and the Tribunal by order dated 24/12/2014 directed the Learned Transfer Pricing Officer (TPO) to assess the transfer pricing study report afresh.

Subsequently, Ld. PCIT, having gone through the assessment record proposed to revise the same by notice under section 263 of the Act on the ground that the assessment order is erroneous and prejudicial to the interest of Revenue. After hearing the assessee, by order dated 09/11/2015 the Ld. PCIT directed the learned Assessing Officer to revise the income of the assessee and pass an order under section 143(3) of the Act after allowing an opportunity of being heard to the assessee. Consequently learned Assessing Officer passed an order dated 30/12/2016 under section 143(3) read with section 254 and 263 of the Act. Assessee preferred an appeal against this order dated 30/12/2016 before the Ld. CIT(A).

As the matters stood thus, assessee claims to have been advised by an external consultant to prefer an appeal against the order dated 09/11/2015 passed by the Ld. PCIT before the Tribunal. By the time the

Per contra, Ld. DR submitted that the assessee is a well-established multinational company assisted by a battery of in-house tax professionals and they also hire the tax professionals for tax audit and the TP audit works on regular basis. Further that, althrough this time the assessee has been preferring appeals before the Tribunal and also the High Court, and for example for the assessment year 2008-09 they preferred appeal before the Tribunal in ITA No. 1632/Hyd/2012 and also filed appeal before the Hon’ble High Court for the same year in ITTA No. 406/2014. Even against the assessment order passed pursuant to the directions in section 263 of the Act the assessee preferred appeal before the Ld. CIT(A) and the Tribunal. Ld. DR further submitted that the assessee did not establish any bona fides in their favour by explaining the specific details like name of the external consultant, the date of consultation, the date of advice and the relevant correspondence etc. according to him the internal correspondence of the assessee in the form of emails are not throwing any

We have gone through the record in the light of the submissions made on either side. There is no denial of the fact that the assessee is a multinational company engaged in the business of import, storage, blending, bottling and the sale of liquefied petroleum gas for domestic, commercial and industrial use. In the affidavit filed in support of the petition to condone the delay, the deponent clearly stated that the assessee has been representing their case for the assessment year 2009- 10 before the learned Assessing Officer and the Ld. PCIT with its in-house the finance team and there was no external consultant advised for filing the appeals before the ITAT. According to the assessee, they have appointed the external consultant on 25/04/2017. It is an admitted fact that there was representation before the Ld. PCIT on behalf of the assessee during the proceedings under section 263 of the Act. An order under section 263 was passed on 09/11/2015 and the consequential order was passed by the learned Assessing Officer on 30/12/2016. Against this order dated 30/12/2016 the assessee preferred an appeal before the Ld. CIT(A).

There is no denial of the fact that all through this time the assessee has been preferring appeals before the Tribunal and also the Hon’ble High Court, and by way of example Ld. DR mentioned the ITA No. 1632/Hyd/ 2012 before the Tribunal and ITTA No. 406/2014 before the Hon’ble High Court. It’s not the case of the assessee that at any point of time before 25/04/2017 they felt the need to engage any external consultant for

As stated above, the assessee is not an individual to say that they are not well conversant with the law or to plead that they do not know that an appeal could be preferred against the order passed in section 263 of the Act. Each case turns on its own facts and the assessee cannot have the benefit of ignorance of law, which could perhaps be available to an individual who had no recourse to the expert advice. Here the assessee has been conducting their tax audit in the TP audit works on regular basis, they have a battery of experts at their disposal. Assessee has been conducting the cases before the Ld. CIT(A), Tribunal and also the Hon'ble High Courts. They have been preferring the appeals regularly before these forums. It is not the case of the assessee that at any point of time, they felt the need to appoint an external consultant to seek advice as to filing of appeals before any of these fora. Assessee does not give us any details as to the purpose of engaging the external consultant, other than to un-earth this particular appeal to be preferred against the time barred Ld. PCIT passed under section 263 of the Act. It is not open for a multi-national company with a battery of experts at their disposal to contend that they do not know the law of the land. The views expressed in Motilal Padampat Sugar Mills (supra) are not helpful to the case of the assessee.

Assessee does not give us any details as to when exactly the external consultant gave them the advice to prefer an appeal before this Tribunal against the order of the Ld. PCIT. Absolutely, there is no evidence to establish that the advice to prefer an appeal against the order of the Ld. PCIT under section 263 of the Act emanated from the external consultant. The e-mail record produced before us does not show the external consultant as the source of this idea. It only shows that they have prepared the necessary papers and demanded the deposit of Rs. 10,000/-. It is imperative for the assessee, who happens to be a multi-national company, with all its paraphernalia to conduct the legal matters in-house to establish that they were wanting to be instructed by an external consultant and that too bona fidely, and it is only at the advice of the external consultant, they realised the possibility of preferring appeal. At the cost of repetition, we observe that there is no evidence what-so-ever to show that such an advice really emanated from the external consultant. Even according to the assessee at no point of time, they felt the necessity to engage an external consultant before 25/04/2017. It is sheer negligence on the part of the assessee not to engage such experts, when they have been dealing day in and day out with the tax matters. Volenti Non Fit Injuria. If a multi- national company is allowed to plead ignorance of law of the land and to take shelter under Motilal Padampat Sugar Mills and Katiji (supra), there will be no meaning to the public policy laid by the legislature. We cannot attribute any redundancy to the public policy involved in this matter.

At this juncture, it is just and necessary to refer to the observations of the Hon'ble Apex Court on this aspect. In Esha Bhattacharjee vs Mg.Commit.Of Raghunathpur Nafar (2013) 12 SCC 649, wherein the

Since we decline to condone the delay, adjudication of the appeal on merits does not arise.

In the result, appeal of the assessee is dismissed.