TATA MOTORS LTD,MUMBAI vs. ACIT 2(3), MUMBAI

आयकर अपीलीय अिधकरण मुंबई पीठ “एच ”,मुंबई �ी िवकास अव�थी,�ाियक सद� एवं �ी एस. �रफौर रहमान, लेखाकार सद� के सम� IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “ H ”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER& SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER आअसं.631/मुं/2013 (िन.व. 2008-09) (A.Y.2008-09) Tata Motors Limited Bombay House, 24,Homi Mody Street, Hutama Chowk, Mumbai – 400001. PAN: AAACT-2727-Q ...... अपीलाथ�/Appellant बनाम Vs. The Addl. Commissioner of Income Tax Circle -2(3), Mumbai. Aaykar Bhavan, M.K.Road, Mumbai – 400 020 .....�ितवादी/Respondent अपीलाथ� �ारा/ Appellant by : Shri J.D.Mistry, Sr.Advocate with Shri Nikhil Tiwari,Advocate �ितवादी �ारा/Respondent by : Ms. Vatsala Jha, CIT-DR and Shri Manoj Kumar Singh, Sr.AR सुनवाई की ितिथ/ Date of hearing : 10/11/2023 घोषणा की ितिथ/ Date of pronouncement : 05/02/2024 आदेश/ORDER PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the assessment order passed under section 143(3) r.w.s. 144C of the Income Tax 1961 [in short ‘the Act’] for the assessment year 2008-09.

“16.On the facts and circumstances of the case and in law, the Order u/s. 92CA(3) of the Act passed by the Additional Commissioner of Income-tax, Transfer Pricing - ll(2), Mumbai (Addl. CIT) is without jurisdiction and bad in law inasmuch as the "Transfer Pricing Officer" means a Joint Commissioner or Deputy Commissioner or Assistant Commissioner authorized by the Board to perform all or any of the functions of an Assessing Officer specified in sections 92C and 92D in respect of any person or class of persons, as per Explanation to section 92CA of the Income-tax Act, 1961 ("the Act").” To support admission of additional ground, the assessee placed reliance on the following decisions:

(i) Jute Corporation of India Ltd. , 187 ITR 688 (SC). (ii) National Thermal Power Company, 229 ITR 383(SC) (iii) Pruthvi Brokers and Share Holders, 349 ITR 351 (Bom)

5.1 In the first plank of arguments he pointed that in the present case, the order u/s. 92CA of the Act has been passed by an Officer in the rank of Additional Commissioner of Income Tax. As per Explanation to section 92CA, Additional Commissioner cannot be appointed as TPO. The provisions of section 92CA is very specific and Explanation to section 92CA categorically mention that the TPO means a Joint Commissioner or Deputy Commissioner or Assistant Commissioner. Since, in the instant case, the order u/s. 92CA of the Act has been passed by an Additional Commissioner, the order is without jurisdiction, hence, unsustainable in the eye of law. The ld.Counsel for the assessee to support his argument that Additional Commissioner and Joint Commissioner are different authorities referred to in the provisions of section 116 of the Act. He pointed that the Act classifies Income Tax Authorities u/s. 116 of the Act. The Additional Commissioner and Joint Commissioner have been categorized in two different clauses of section 116 of the Act. The Additional Commissioners have been put in clause (cc), whereas Joint Commissioners have been put in clause (cca) of section 116. Hence, this itself signifies that Additional Commissioner and Joint Commissioners are not the authorities in same class. He further referred to the definition of Additional Commissioner u/s. 2(1C) of the Act . He submitted that Additional Commissioners have been defined separately u/s. 2(1C) and Joint Commissioners have been defined u/s.2(28C) of the Act . The definition of Additional Commissioner was inserted by the Finance Act, 2007 with retrospective effect from 01/06/1994, whereas the definition of Joint Commissioner was inserted by Finance (No.2) Act, 1998 w.e.f. 01/10/1998. The aforesaid definitions of two different authorities were inserted at different point of time, hence, by no stretch of explanation it can be said that Additional Commissioners and Joint Commissioners are one and the same. He further referred to the definition of Assessing Officer u/s. 2(7A) of the Act to contend that in the definition of the Assessing Officer, Joint Commissioner was included by the Finance (No.2) Act of 1998, whereas the Additional Commissioner was inserted by the Finance (No.2) Act of 2007 w.r.e.f 01/06/1994. The insertion of these two authorities in the definition of Assessing Officer at two different point of time would clearly show that these authorities fall under separate category and hence cannot be considered as one and the same. He further referred to the provisions of section 124 of the Act to again highlight that Additional Commissioners and Joint Commissioners were inserted in clause (b) of section 120(4) at different point of time. Hence, they are two different authorities under the provisions of the Income Tax Act. He vehemently argued that the intention of Legislature was never to designate Additional Commissioner as TPO as the Explanation to section 192CA of the Act does not specify Additional Commissioner as TPO. He submitted that wherever the Legislature intended to include Additional Commissioner along with Joint Commissioner, the section provides so specifically. In support of his arguments he referred to the provisions of section 132(1) of the Act. The ld. Counsel for the assessee to thrust the point that the Additional Commissioner and Joint Commissioner are two separate authorities placed reliance on the decisions rendered in the case of Dr.Nalini Mahajan vs. Director of Income Tax, 252 ITR 123(Del) upheld by Hon’ble Supreme Court of India in Director of Income Tax vs. Nalini Mahajan, 314 ITR 340 (SC), CIT vs. Pavan Kumar Garg, 334 ITR 240(Del) and CIT vs. Jain Sons in SLP (Civil) No.8958/2009 decided on 27/07/2009.

5.2 In second plank of his submissions, the ld. Counsel for the assessee submitted that a perusal of Explanation to Section 92CA would show that “authorization by Board” is necessary to perform the functions of a TPO u/s. 92C and 92D of the Act. In the instant case, there is no authorization by the Board in the name of Shri Vatsalya Saxena, Additional Commissioner to discharge the functions of a TPO. He pointed that a request letter dated 13/01/2020 was written to the Department for providing copy of authorization in favour of Shri Vatsalya Saxena to act as TPO. Till date copy of authorization has not been provided to the assessee. The ld. Counsel for the assessee further asserted that Board authorization for designating an officer as TPO has to be in specific manner. He referred to one such Board Authorization, Notification No.239/2004 dated 09/09/2004 to point the right manner of authorization.

Finally, he submitted that where the assessment or any order is passed by an authority not competent to pass such order or is not authorized to pass such order, the said order and any proceedings arising therefrom are bad in law. To support his argument he placed reliance on the decision in the case of Virtura Consulting Services Pvt. Ltd. Vs. DRP & Ors, 139 taxmann.com 361 (Madras).

6.1 In response to second limb of argument by the ld. Counsel for assessee, the ld. Departmental Representative placed on record copy of order No.59 of 2011 dated 04/04/2011 vide which the officers in the grade of Joint/Additional Commissioners are transferred in the Directorate of International Taxation and Transfer Pricing by the Board. She pointed that Shri Vatsalya Saxena was transferred from Pune Zone to Mumbai Zone under the charge of Director General of Income Tax (International Taxation), Mumbai.[in short ‘the DGIT(IT)] Thereafter, vide office order dated 05/04/2011 Shri Vatsalya Saxena was posted as TPO 2(2) at Mumbai by the DGIT(IT). The posting of officers from one Zone to other Zone are done by the Board. Further postings to the range/charge are done by the CCIT/DGIT of the respective Zones.

The aforesaid postings of the officers are on the vacancies of the TPO created by the Board. He pointed that the relevant notification of vacancies of the TPO for the impugned assessment year are notified by the Board vide Notification No.231/2007 dated 22/08/2007. The authorization by the Board vide aforesaid notification is in accordance with Explanation to section 92CA of the Act. Referring to the Notification No.231/2007 (Supra) she pointed that at Sl.No.32 Joint Commissioner TPO-II(2) Mumbai has been designated against territorial area and the class of persons assessable within his jurisdiction. She further pointed that at the end of notification there is a note which clearly states that the Board empowers Director General of Income Tax (International Taxation) or the concerned Directors of the Income Tax (Transfer Pricing) to distribute work among TPO working under them while exercising their power and performing their functions. The transfer of Shri Vatsalya Saxena, Additional Commissioner by the Board to Mumbai in the Directorate of International Taxation and Transfer Pricing and the subsequent office order issued by Director General of Income Tax (International Taxation) posting him as TPO II(2), Mumbai are in accordance with authorization by the Board.

6.2 The Ld. Departmental Representative placed on record Explanatory note to the provisions of Finance Act, 2007 vide which definition of Additional Commissioner was inserted as section 2(1C). She submitted that a perusal of explanatory note would make it clear that the definition of Additional Commissioner was inserted only as a clarificatory amendment to the definition of Assessing Officer defined in section 2(7A) of the Act. She pointed that Joint Commissioner has been defined u/s. 2(28C) of the Act which includes Additional Commissioner u/s. 117 of the Act. The Ld. Departmental Representative referring to the decision in the case of DCIT vs. BBC Worldwide India Pvt. Ltd.112 taxmann.com 380 (Del-Trib) submitted that an additional ground challenging jurisdiction of Additional Commissioner to act as TPO was raised in the said appeal. The decision of Delhi High Court in the case of Pawan Kumar Garg (supra) was also relied upon by the ld.Counsel for the assessee therein. The Tribunal distinguished the said decision and dismissed the additional ground raised by the assessee.

“Explanation:- For the purpose of this section, “Transfer Pricing Officer” means a Joint Commissioner or Deputy Commissioner or Assistant Commissioner authorized by the Board to perform all or any of the functions of an Assessing Officer specified in sections 92C and 92D in respect of any person or class of persons. ” The contention of the assessee is that since, Additional Commissioner is not mentioned in Explanation, therefore, he cannot be the TPO.

Section 2(1C): “Additional Commissioner” means a person appointed to be an Additional Commissioner of Income-tax under sub-section (1) of section 117;” The aforesaid definition was inserted by the Finance Act, 2007 w.r.e.f 01/06/1994. The Joint Commissioner has been defined u/s. 2(28C) as under:

“Joint Commissioner” means a person appointed to be a Joint Commissioner of Income-tax or an Additional Commissioner of Income-tax under sub-section (1) of section 117;” The definition of Joint Commissioner was inserted by the Finance (No.2) Act, 1998 w.e.f. 01/10/1998. Before proceedings further, it would be relevant to refer to the reasons for inserting the aforesaid definition. Circular No.772 dated 23/12/1998 gives the reasons behind the insertion of sub-section(28C) to section 2 of the Act. The relevant extract of Circular No.772(supra) is reproduced herein below:

“Redesignation of Income-tax Authorities under the Income-tax Act 5.1 The Fifth Central Pay Commission had recommended a change in the designation of Assistant Commissioner of Income-tax (Senior Scale). Consequently, it was decided to re-designate Assistant Commissioner of Income-tax (Senior Scale) and Assistant Director of Income-tax (Senior Scale) as Deputy Commissioner of Income-tax and Deputy Director of Income-tax respectively. This necessitated re-designating the existing Deputy Commissioner of Income-tax and Deputy Director Income-tax as Joint Commissioner of Income-tax and Joint Director of Income-tax respectively. The above changes in designation made it necessary to amend the various sections of the Income-tax Act so that the statutory powers continue to be exercised by the substituted authorities as a result of redesignation.

5.2 The following substitution of income-tax authorities has been globally made in the Income-tax Act: Table

From To Assistant Commissioner Assistant Commissioner or Deputy Commissioner

Assistant Director Assistant Director or Deputy Director Deputy Commissioner Joint Commissioner Deputy Director Joint Director

5.3 Clause (74) of section 2 of the Income-tax Act containing the definition of Assessing Officer has been amended to include the redesignated authorities as above.

5.4 Clause (94) of section 2 of the Income-tax Act has been amended to include Deputy Commissioner in the definition of Assistant Commissioner.

5.5 Clauses (194) and (19C) of section 2 of the Income-tax Act have been amended to exclude the authorities of Additional Commissioner of Income-tax and Additional Director of Income- tax from the definitions of Deputy Commissioner and Deputy Director.

5.6 Two new clauses, namely (28C) and (28D) have been inserted in section 2 of the Income- tax Act to define Joint Commissioner and Joint Director.

5.7 Section 116 of the Income-tax Act has been amended by inserting clause (cca) to add a new class of income-tax authorities, namely, Joint Director of Income-tax or Joint Commissioner of Income-tax.”

A perusal of aforesaid reasons would show that prior to 1998 there was no designation in the hierarchy of Income Tax Authorities as Joint Commissioner. There was restructuring of Income Tax Department in 1998. The Fifth Central Pay Commission recommended changes in the designation of the then existing authorities which necessitated re-designation of then existing authorities. As a result, Deputy Commissioner was re—designated as Joint Commissioner. A new authority Joint Commissioner came into being hence, sub-clause (28C) was inserted defining Joint Commissioner.

In the year 2007, the definition of Additional Commissioner was inserted w.r.e.f 01/06/1994. A perusal of Explanatory Notes to the Provisions of Finance Act, 2007, vide Circular No.3/2008 dated 12/03/2008 gives the reasons for insertion of the definition of Additional Commissioner. The relevant extract of the Explanatory Notes are reproduced herein:

“4. Clarificatory amendment to the definition of 'Assessing Officer' and definition of certain other Income-tax Authorities; As per the provisions of clause (7A) to section 2, the expression "Assessing Officer" has been defined to include Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of this Act. The Joint Commissioner or Joint Director who is directed under clause (b) of sub-section (4) of section 120 can also exercise or perform all or any of the powers and functions conferred on or assigned to an Assessing Officer under this Act. The Income-tax authorities- "Additional Commissioner" and "Additional Director" were not specifically mentioned in the said definition because "Additional Commissioner" and "Additional Director" were included in the definition of Joint Commissioner and Joint Director respectively under clauses(28C) and (28D) of the section(2) respectively. However, in order to further clarify the intension of the legislature with regard in the meaning of the term "Assessing Officer", the following amendments have been carried out through the Finance Act, 2007- (i) ……… (ii) …….. (iii) Clause (1C) has been inserted in section 2 so as to provide that "Additional Commissioner" means a person appointed to be an Additional Commissioner of Income-tax under sub-section (1) of section 117. This amendment will take retrospective effect and will be effective from 1st June, 1994. (iv) …………. (v) ………….. (vi) …………. (vii) Clause (b) of sub-section (4) of section 120 has been amended so as to provide that the powers and functions conferred on or assigned to the Assessing Officer may also be exercised or performed by an Additional Commissioner. This amendment will retrospective effect and will be effective from 1st June,-1994.”

The definition of Joint Commissioner in section 2(28C) makes it unambiguous that Joint Commissioner means a person appointed to be Joint Commissioner or Additional Commissioner. The definition of Additional Commissioner was subsequently inserted u/s. 2(1C) of the Act as a clarificatory amendment. Hence, it can be safely deduced from the definition of Joint Commissioner and the reasons for inserting the definition of Additional Commissioner that Joint Commissioner and Additional Commissioner are not two authorities functioning at different levels in the hierarchy of the Income Tax Department but are authorities performing or discharging concurrent functions.

10. The designation of Additional Commissioner was created by the Finance Act, 1994, accordingly, amendment was made to section 116 of the Act and clause (cc) was inserted by the Finance Act, 1999 w.e.f. 01/06/1994. The Board Circular No.684 dated 10/06/1994 (Explanatory Notes to the Finance Act, 1994) explains the reasons for creation of new class of Income Tax authorities. The relevant extract of the same is reproduced herein below:

“15. At present, the classes of income-tax authorities specified in Chapter XIII of the Income-tax Act include the class of Deputy Directors of Income-tax, Deputy Commissioners of Income-tax and Deputy Commissioners of Income-tax (Appeals). The income-tax authorities referred to in this class perform different kinds of functions such as.- (i) supervising the work of Assistant Commissioners/Income-tax Officers. (ii) doing assessment functions. (iii) handling internal audit of the completed assessments, (iv) disposal of appeals, (v) representing Departmental cases in the Appellate Tribunal, (vi) handling search and seizure matters, etc. The above shows that some of the Deputy Commissioners and Deputy Directors have been assigned duties of higher responsibility. Therefore, there is need to recognize the aforesaid distinction in responsibility by making an appropriate change in the designation of such authorities. 15.2 The Finance Act has, therefore, amended the relevant provisions of the Income Tax Act in order to create a new class of income tax authorities, namely, additional directors of Income Tax, Additional Commissioners of Income Tax and Additional Commissioners of Income Tax (Appeals). Similar changes have been made to the Wealth Tax Act, the Gift Tax Act, the interest tax Act and the expenditure tax Act.” It is relevant to mention here that prior to 1998 Additional Commissioner was included in the definition of Deputy Commissioner u/s.2(19A) of the Act. By virtue of amendment by the Finance (No.2) Act, 1998 the words Additional Commissioner were omitted from the definition of Deputy Commissioner in Section.2(19A) of the Act and Additional Commissioner was included in the definition of Joint Commissioner. Thus, Additional Commissioner was never separately defined. The Additional Commissioner was initially bracketed with Deputy Commissioner (upto 01/10/1998) and thereafter with Joint Commissioner w.e.f. 01/10/1998. In the backdrop of these amendments we can say that the designation of Additional Commissioner was not per se authority superior/at a different level to the DCIT prior to the amendment or Joint Commissioner after the amendment of 1998.

“19. We have carefully considered the rival contention. Admittedly according to the provisions of Explanation to section 92 CA of the act Transfer Pricing officer for the purposes of the section of 92 CA of the act is: 'Explanation.—For the purposes of this section, "Transfer Pricing Officer" means a Joint Commissioner or Deputy Commissioner or Assistant Commissioner authorised by the Board17 to perform all or any of the functions of an Assessing Officer specified in sections 92C and 92D in respect of any person or class of persons.]' Provisions of section 2 (28C) of the Act defines the Joint Commissioner means a person appointed to be a Joint Commissioner Of Income Tax Or An Additional Commissioner Of Income Tax under subsection (1) of section 117 of the income tax act. Further with retrospective effect from 01/06/1994 section 2 (1C) was inserted by finance act 2007 to define Additional Commissioner means a person appointed to be an Additional Commissioner Of Income Tax under subsection (1) of section 117 of the act . Further, it is not the case of the assessee that such Additional Commissioner of income tax, who passed an order u/s 92CA (3) of the income tax act, was not an authorised officer by the central board of direct taxes. Reliance placed by the learned authorised representative on the decision of the honourable Delhi High Court in CIT v. Soyuz Industrial Resources Ltd. [2015] 58 taxmann.com 336/232 Taxman 414 decided the issue that Where re-assessment proceedings were initiated after expiry of four years from end of relevant years, sanction for issuance of notice for re- assessment proceedings was to be granted by Joint Commissioner and not by commissioner as per provisions of section 151(2) of the act. Therefore, in that case notice was to be issued by the joint Commissioner, which was issued by the Commissioner. Such is not the case before us. Therefore, the reliance on this decision does not help the case of the assessee. Further, the reliance placed by the assessee on the decision of the honourable Delhi High Court in SPL's Siddhartha Ltd. (supra) also does not help the case of the assessee as in that case it was held that Where Assessing Officer instead of taking approval from Joint Commissioner as per provisions of section 151, obtained approval from Commissioner and issued notice under section 148, said notice was invalid. Reliance placed by the authorised representative on the case of Pawan Kumar Gupta (supra) wherein the issue was that the second warrant of authorization in respect of the said locker was issued by the Additional Director, Income-tax (Investigation). The Additional Director does not find mention in the provisions of section 132(1). However, it was contended by the learned counsel for the revenue that the Additional Director would be covered in the expression 'Joint Director' in view of the provisions of section 2(28D) of the said Act. The court held that Even assuming that the expression 'Joint Director' as used in section 132(1) includes an Additional Director, such Additional Director or Joint Director would have to have initial empowerment by the Board to issue warrants of authorization in view of the provisions of section 132(1)(B). Therefore the only issue before the honourable Delhi High Court was whether the warrant issued by the additional director who was not empowered by the central board of direct taxes is a valid warrant or not. The honourable High Court held so only for the reason that there was no authorization by the board in favour of the additional director. Here it is not the case of the assessee that the Additional Commissioner of income tax who passed the order of the transfer pricing under section 92CA (3) of the act was not authorised by the central board of direct taxes to perform all or any of the functions of an assessing officer specified u/s 92C of the Act. In view of this, the reliance on the above decision of the honourable Delhi High Court does not support the case of the assessee. Thus we hold that, the order passed by the additional Commissioner of income tax u/s 92CA (3) of the income tax act is appellate order passed by a transfer pricing officer in case of the assessee for assessment year 2002 - 03. In view of this, the additional ground raised by the assessee in the cross objection is dismissed.”

11.1 The ld.Counsel for the assessee has placed reliance on the decision in the case Dr.Nalini Mahajan(supra) to buttress his arguments that Additional Commissioner and Joint Commissioner are two separate authorities. We have carefully perused the aforesaid judgement. We find that the said decision is distinguishable on facts. The ld.Counsel for the assessee referring to Para – 77 and 78 of the aforesaid judgment argued that the powers conferred upon the authorities specified in a particular section must be exercised by the authorities who had expressly being conferred therein. We find that the Hon’ble Court made aforesaid observations in the case of Dr.Nalini Mahajan (supra), as in the said case search warrant were issued by Additional Director (Investigation), whereas the Act required Director or Director General or Chief Commission or Commissioner to issue such warrants. Thus, it was a case where the Act envisaged issuance of warrant by higher authorities, whereas the warrants were issued by authority junior in hierarchy. The Additional Director (Investigation) issued authorization or warrants to Joint Director. In the backdrop of the above facts, the Hon’ble Court held “ A delegation of power is essentially a legislative function. Such a power of delegation must be provided for by the staute. The Director himself for certain matters is the delegating authority. He, unless the staute expressly state, cannot sub-delegate his power to any other authority.” In the instance case it is not so. The definition of Joint Commissioner includes Additional Commissioner as well. Both, the Joint Commissioner and the Additional Commissioner perform functions in the same level of hierarchy in the Income- tax Department. Precisely for this very reason the definition of Joint Commissioner in section 2(28D) includes Additional Commissioner, hence, the case of Dr.Nalini Mahajan does not support the cause of assessee. Similar were the facts in the case of Pawan Kumar Garg (supra). The warrants were required to be issued by Director whereas, the warrants were issued by lower authority i.e. Additional Director. Therefore, the Hon’ble Court followed the decision in the case of Dr.Nalini Mahajan.

11.2 The second limb of the arguments advanced by the ld.Counsel for the assessee is that Shri Vatsalya Saxena, Additional Commissioner is not authorized by the Board to act as TPO. The arguments of ld.Counsel is that Explanation to Section 92CA requires Joint Commissioner/Deputy Commissioner/ Assistant Commissioner to be authorized by the Board to perform the functions of a TPO and such an authorization is in a particular manner. He referred to one such authorization Notification No.239/2004 dated 09/09/2004. Mr. Mistry asserted that the authorization furnished by the Department falls short of the requirement as envisaged u/s. 92CA of the Act. The Department has referred to the Notification No.231/2007 dated 22/08/2007, whereby the Board has notified the designation of Income-tax authorities to act as TPO and has also specified the territorial area and the class of persons on whom such an officer shall have jurisdiction. The ld. Departmental Representative stated at Bar that the Notification dated 22/08/2007 is relevant notification applicable to Assessment Year under appeal. A perusal of the said notification reveals that at Sl.No.32 the relevant entry for authorization of the officer to act as TPO II(2), Mumbai. For the sake of ready reference the relevant extract of the notification is reproduced herein under:

“NOTIFICATION NO.231/2007, DATED 22-08-2007 In exercise of the powers conferred by sub-section(1) and (2) of section 120 of the Income- tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following further amendment to the Notification of the Government of India, Ministry of Finance (Department of Revenue),(Central Board of Direct Taxes), number S.O 994(E) dated the 9th September, 2004, namely:- In the said notification, for the Schedule, the following Schedule shall be substituted, namely:- SCHEDULE

Serial Designation of Head Territorial Area Persons or Class of Number Income-tax Quarter persons. Authorities. (1) (2) (3) (4) (5) 1. x x x x 2. x x x x x x - x 32. Joint Commissioner of Mumbai Areas lying within Persons or class of Income-tax (Transfer the territorial persons who are Pricing Officer)-II(2), limits of assessed or assessable Mumbai Metropolitan within jurisdiction of Council Greater Assessing Officer Mumbai and having their office in Districts of Thane the territorial area and Raigarh, indicated in column(4) State and having their Maharashtra names beginning with any of the alphabets ‘N’ to ‘Z’ - x x x x 69. x x x x 70. x x x x Note: The Central Board of Direct Taxes empowers the Director General of Income-tax (International Taxation or the concerned Directors of Income-tax (Transfer Pricing) to distribute the working amongst the Transfer Pricing Officers working under then while exercising their powers and performing theirs functions.” A perusal of the above notification would show that the Board in exercise of powers conferred by section 120(1) & (2) of the Act has amended RBI Notification dated 09/09/2004 and has authorized the officers designated in column (2) to have territorial jurisdiction( mentioned in column (4)over the person or class of persons mentioned in column (5). The Note in the end of the said notification clarifies that Board has empowered Director General of Income-tax (International Taxation) or Director Income-tax (Transfer Pricing) to distribute the work amongst the TPOs working under them. The Ld. Departmental Representative has placed on record order No.59 of 2011 dated 04/04/2011 vide which Board has transferred the officers in the grade of Joint Commissioner/Additional Commissioner in the Directorate of International Taxation and Transfer Pricing. The name of Shri Vatsalya Saxena figures in the list of ‘Officers who are being posted to other station/region’ at Sl.No.11. Thus, he was transferred in the charge of Director General of Income Tax (International Taxation) by the Board and the DGIT(IT) posted Shri Vatsalya Saxena vide office order dated 05/04/2011 as TPOII(2). Thus posting orders of Shri Vatsalya Saxena as TPO-II(2) in harmony with authorisation by the Board vide notification dated 22/08/2007 (supra). Here we would observe that what Mr. Mistry referred to as authorization is in fact the order of posting. Authorization by the Board and posting of an officer to an authorized vacancy are two different things. The authorization by Board only refers to the designation of an Income Tax Authority for a particular vacancy & the transfer/ posting orders assign a particular officer to that vacancy. To put it in simple words, the Board authorization creates a vacancy and by virtue of transfer/posting orders the Department fills the said vacancy with the designated incumbent. As pointed earlier, the definition of Joint Commissioner in Section 2(28C) includes Additional Commissioner, therefore, in our considered view there is no infirmity or irregularity in appointing officer in the grade of Additional Commissioner to a position designated for Joint Commissioner. Thus, in view of our above findings we find no merit in both the arguments advanced by the ld.Counsel assailing validity of order passed u/s. 92CA of the Act. As a result, additional ground No.16 of appeal is dismissed.

Ground No.1 : Allowability of Pro-rata amount for the year in respect of Leasehold Lands – Rs.71,86,777/-: 13. The ld. Counsel for the assessee submits that the assessee had claimed deduction towards pro-rata amount of Leasehold land. The assessee had made claim of the aforesaid amount by way of a Note in computation of income. The A.O rejected the claim on the ground that the amount has not been claimed in the return of income or in the revised return of income. The ld.Counsel for the assessee pointed that similar claim was made in A.Y 2006-07 and 2007-08. He fairly stated that in A.Y.2006-07 the claim was made in the computation of income and requisite disclosure was made in notes to computation of income that the deduction has been claimed u/s. 37(1) of the Act. The A.O accepted the same and no disallowance was made in the assessment order. He submitted that since, the claim of assessee has been accepted in the past the same cannot be disallowed in the impugned assessment year merely for the reason that the claim was made in the notes to the Return of Income and not in the return of income. The ld Counsel further pointed that in A.Y. 2007-08 the claim of assessee was allowed by the Tribunal in decided on 25/04/2019, the Tribunal directed the A.O to consider assessee’s claim of deduction in line with earlier assessment years. The A.O while passing the order giving effect to the Tribunal order allowed the claim of assessee.

“ 13. We have considered rival submissions and perused material on record. It is evident, the assessee’s claim of deduction on account of amortization of upfront payment made towards leasehold land was rejected both by the Assessing Officer and learned DRP only for the reason that such deduction was not claimed either in the original or in the revised return of income. However, it is a fact on record that in the computation of income the assessee has claimed such deduction. Moreover, though, the ratio laid down in Goetz India Ltd. (supra) is applicable to the Assessing Officer, however, it is not applicable to the appellate authorities. Therefore, assessee’s claim of deduction should have been examined on merit by learned DRP instead of rejecting it on technical ground. Be that as it may, in view of the ratio laid down by the Hon'ble Jurisdictional High Court in Pruthvi Brokers & Shareholders Pvt. Ltd. (supra), we restore the issue to the Assessing Officer for deciding afresh assessee’s claim of deduction. While doing so, the Assessing Officer should also take note of assessee’s contention that similar deduction claimed by the assessee in preceding assessment year was allowed. Further, the Assessing Officer is also directed to decide the issue on merit keeping in view the decision of the Hon’ble Gujarat High Court in Sun Pharmaceuticals India Ltd. (supra) and that of the Tribunal in Delhi International Airport Pvt. Ltd. (supra) and any other decision which may be cited by the assessee. With the aforesaid observations, this ground is allowed for statistical purposes” The ld. Counsel for the assessee placed on record copy of order giving effect dated 27/05/2022 for A.Y 2007-08. From perusal of the said order we find that the A.O has allowed assessee’s claim of pro-rata amount on the leasehold land. Since, the claim of assessee has been allowed in the past i.e. A.Y 2006-07 and 2007-08 on similar set of facts, in principle we hold that assessee’s claim of deduction of pro-rata amount in respect of leasehold lands deserves to be accepted, however, we deem it appropriate to restore the issue to the A.O for the limited purpose to examine quantum of claim. Ground No.1 of appeal is allowed in the aforesaid terms.

Ground No.2: Write back of provision for doubtful debts- Rs.14,24,06,922/-:

He further submitted that second part of claim is, in A.Y 2004-05 the deduction claimed by TFL Rs.1,37,99,189/- was disallowed by the A.O in reassessment proceedings. The assessee challenged reopening of assessment before the Tribunal in for Assessment Year 2004-05. The Tribunal vide order dated 31/07/2017 quashed reopening of assessment. Therefore, claim was made before the A.O/DRP in the current year, as deduction was not allowed in the hands of TFL in A.Y. 2004-05.

He submitted that third segment of relief amounting to Rs.7,10,77,678/- is in respect of deduction claimed by TFL disallowed by the A.O in Assessment Year 2005-06. The said order was passed after assessment order and order of DRP for Assessment Year 2008-09, wherein provision for doubtful debts written back during the year was offered to tax in the return of income. Since, the order of A.O was received post directions of the DRP, the issue has been raised before the Tribunal. He submitted that the issue is covered by the order of Tribunal in assessee’s own case decided on merits in for A.Y 2007-08 on 25/04/2019 and the order of Tribunal for A.Y 2006-07 in ITA No.8926/Mum/2010 vide order dated 18/01/2019. In support of his submissions that deduction can be allowed by the Tribunal, even if, not claimed by way of return of income /revised return of income he placed reliance on the following decisions:

(i) Jute Corporation of India Ltd. 187 ITR 688 (SC) (ii) Pruthvi Brokers and Shareholders Pvt. Ltd., 349 ITR 336(Bom). 16. The ld. Departmental Representative supported the impugned order and prayed for dismissing this ground of appeal by the assessee. He submitted that assessee did not make any such claim in the return of income, hence, the same was rightly rejected by the A.O and DRP.

Taking into consideration entire facts, we deem it appropriate to restore this issue back to the file of A.O for re-examination. The Assessing Officer shall also consider the fresh claim made by the assessee before the Tribunal amounting to Rs.7,10,77,678/-. The A.O shall grant reasonable opportunity of hearing /making submissions to the assessee, in accordance with law. In the result, ground No.2 of appeal is allowed for statistical purpose. Ground No.3: Interest on Income-tax refund u/s. 244A of the Act – Rs.4,23,16,581/-.

Ground No.4: Disallowance u/s. 14A r.w.r. 8D- Rs.60,20,00,000/-

(i) Under Rule 8D(2)(ii) Rs.43.50 crores (ii) Under Rule 8D(2)(iii) Rs.16.70 crores.

The ld.Counsel for the assessee submitted that the assessee has made investments out of own interest free funds. Referring to Fund Flow Statement at page 318 of the Paper Book he pointed that own funds of the assessee comprising of Capital and Reserves and Surplus are to the tune of Rs.7839.50 crores, as against total investment of Rs.4910.27 crores as on 31/03/2008. Thus, own funds of the assessee are sufficient to cover investments. Hence, no disallowance on account of interest expenditure u/r. 8D(2)(ii) is warranted. The ld.Counsel for the assessee submits that in preceding Assessment Years, the Assessing Officer accepted disallowance @1% of exempt income. Thus, he prayed for restricting disallowance u/r.8D(2)(iii) to Rs.2.21 crores. Without prejudice to primary prayer, he made an alternate prayer that if disallowance is restricted to investments yielding dividend income during the year in line with the decision of Special Bench in the case of Vireet Investments Pvt. Ltd.165 ITD 27 (SB-Del) then the disallowance u/s.14A would be Rs.7.23 crores.

In respect of disallowance u/s. 8D(2)(iii) the ld.Counsel for the assessee has made two fold submissions. The first submissions of ld.Counsel for the assessee is that the disallowance be restricted to 1% of the exempt income as was done in the preceding Assessment Years. The second submission of the assessee is that disallowance be restricted to investments yielding exempt income. The provisions of Rule 8D would apply from the Assessment Year 2008-09 i.e. the impugned assessment year before us. Prior to Assessment Year 2008-09 disallowance u/s. 14A was made merely on estimations. Hence, the manner of making disallowance prior to Assessment Year 2008-09 would not apply to Assessment Year 2008-09 and thereafter. Hence, we are not in agreement with the first submission of the assessee, therefore, rejected. The second/alternate contention of the assessee is that disallowance be restricted to investments yielding exempt income. The Special Bench in the case of Vireet Investments Pvt.Ltd.(supra) has held that for the purposes of disallowance u/r. 8D only investments yielding dividend income should be considered. The alternate prayer of the assessee is in line with the principle laid down by Special Bench, hence, we find merit in the alternate prayer made by the ld.Counsel for the assessee. The Assessing Officer is directed to compute disallowance u/r. 8D(2)(iii) on investments yielding exempt income only.

Ground No.5- Disallowance u/s. 14A r.w.r. 8D while computing book profitu/s. 115JB of the Act:

Ground No.6 – Expenditure on issue of FCCN – Rs.22,72,48,854/- : 27. During the period relevant to the assessment year 2008-09, the assessee raised funds by issue of Foreign Currency Convertible Bonds (FCCN) aggregating to USD 490 million. In this connection the assessee incurred expenditure of Rs.2,72,48,854/- towards Arranger fees, Legal and Professional fee, Audit fee, etc. The assessee claimed the aforesaid expenditure as deduction. During assessment proceedings, the assessee pointed that the issue is squarely covered by the decision in the case of CIT vs. Secure Meters Ltd.,321 ITR 611(Raj). The SLP filed by the Department i.e. SLP (C) No. 10548 of 2009 against the said decision was dismissed vide order dated 11/08/2009. The ld.Counsel for the assessee submitted that similar issue was considered by the Tribunal in assessee's own case in Assessment Year 2006-07 in ITA NO.8926/Mum/2010. The Tribunal vide order dated 28/01/2019 allowed the expenditure. The ld.Counsel for the assessee further submitted that without prejudice to the primary submission the Authorities Below have erred in not appreciating the fact that FCCN was never converted into shares and the debt was repaid on maturity. It was further submitted that FCCN were convertible to shares, at the option of the holder.

Instance One: (Product 207 Di31) (i) Third Party price (Non-AEs) - Rs. 2,72,670/- (ii) Price sold to AEs - Rs. 2,57,861/- (iii) Adjustment for difference in price in respect of 12 Units - Rs.1,77,714/- Instance Two: (Product 207-4x4 -483) (i) Third Party price(Non-AEs) - Rs.4,53,915/- (ii) Price sold to AEs:

No. Average price Units 1. Tata Africa Holdings (Ghana) Ltd. 280 400228 1,50,32,445 2. Tata De Mozambique Limited 25 415942 9,49,325 3. Tata Africa Holdings (Tanzania) Ltd. 25 417218 9,17,425 4. Tata Zambia Ltd. 6 416953 2,21,774 (iii) Adjustment made - Rs.1,71,20,979/- The ld.Counsel for the assessee submits that the TPO has cherry picked only one transaction to make adjustment. The assessee is selling different variants of the same vehicle to AEs and Non-AEs. The TPO without appreciating the fact that there could be difference in the variant of vehicle sold to AE and Non- AE made adjustment rejecting assessee’s CUP. The ld.Counsel for the assessee referred to the detailed list of vehicles exported, tabulating description/model of the vehicle, region, country, sale to AE or Non-AE and the value of vehicle in Indian rupee. He submitted that the TPO and the DRP without appreciating the facts made the adjustment. The ld.Counsel for the assessee further referred to month wise export to AE and comparable Third Party transactions at 655 of the Paper Book. Referring to the table at page 655 he submitted that a perusal of aforesaid data would reveal that in all instances price charged to AE is more than Non-AEs.

34. Both sides heard. The assessee is exporting vehicles (CBU) and spare parts to its AEs and non-AEs based in Africa/Asia. To benchmark international transactions the assessee applied internal CUP as the most appropriate method. The assessee is selling different models of its vehicles to its AEs and non-AEs. The TPO in respect of two models of vehicles i.e. 207Di31 and 207- 4x4-483, came to the conclusion that internal CUP to determine arm’s length price is not the correct method and made Transfer Pricing adjustment of Rs.1,72,98,968/-. In so far as other models, the TPO raised no objections. The assessee has placed on record details of export of its various models. For the purpose of determining the issue in hand the details of overseas sale of models selected by the TPO for adjustment are reproduced herein below:

PRODUCT: 207-Di-31 Name of party(AE) Qty. FOB in INR Average FOB in INR Tata Africa Holdings (SA) Pty Ltd. 914 284,434,887 304,633 Tata Africa Holdings (Kenya) Ltd. 77 20,403,534 264,981 Tata Africa Holdings (Tanzania) Ltd. 78 20,474,178 262,489 Tata Uganda Ltd. 12 3,904,326 257,861 Tata Zambia Ltd 22 5,768,425 262,201 Total 1,103 328,175,350 297,530 Average sales price per unit 297,530 Comparable transaction (Non-AE) Nitol Motors Ltd. 73 19,904,907 272,670 Diesel& Motor Engine 868 220,771,761 254,345 Total 941 240,676,668 255,767 Average sales price per unit 255,767 The TPO in respect of product 207-D-31 picked the transaction with one AE i.e. Tata Uganda Ltd. having average FOB of Rs.257,861 and compared it to a transaction with non-AE Nitol Motors Ltd. with an average FOB of 272670. The Assessing Officer /TPO while cherry picking transactions with AE turn blind eye to the other transactions with Non-AE, where the average FOB is lower and number of units sold is much higher. A perusal of the table would show that the average sale price per unit charged to AEs is higher than the average sale price per unit of comparable uncontrolled transactions. Though, the TPO held that internal CUP is not acceptable but he has not specified what other method he has applied to benchmark the transaction.

PRODUCT: 207-4x4-483 Name of party(AE) Qty. FOB in INR Average FOB in INR Tata Africa Holdings (Ghana) Ltd. 280 112,063,745 400,228 Tata De MocambiqueLimita 25 10,398,550 415,942 Tata Africa Holdings (SA) Ltd. 42 18,679,145 444,742 Tata Africa Holdings (Tanzania) Ltd 25 10,430,450 417,218 Tata Zambia (Senegal) 15 6,569,062 437,937 Tata Uganda Ltd. 2 874,458 437,229 Tata Zambia Ltd. 6 2,501,716 416,953 Total 395 161,517,126 408,904 Average Sales Price per unit. 408,904 Comparable transaction(Non-AEs) Compotec UEM 65 23,972,364 368,806 Zahira S.P.R.L 60 23,209,540 386,826 SocieteMiniere Bakwanga 15 5,925,680 395,045 United Diesel 20 8,451,518 422,576 All Trans F Z E 13 5,047,588 388,276 Paul Ries & Sons (ETH) Ltd 7 2,754,243 393,463 Al Zayani Trading Co. 12 4,813,103 401,092 Diesel & Motor Engine 2 907,830 453,915 Total 194 75,081,866 387,020 Average sales price per unit 387,020

Similarly, in respect of product 207-4x4-483, the TPO selected the transaction with non-AE where the average price charged is more than price charged from AE ignoring the fact that there are transaction with other non- AEs where the average price charged is less than average price charged from AEs. The TPO further failed to consider the fact that the assessee has sold only two units to the non-AE where the average price charged is more than the average price per unit charged to AEs. Thus, we are in agreement with the ld.Counsel for the assessee that to determine ALP of the transaction average price charged to AEs should have been compared to the average price of the comparable uncontrolled transactions in respect of each product/model of vehicle. The TPO has resorted to cherry picking which is unacceptable in making Transfer Pricing adjustment. Thus, in light of our above observations, the adjustment made in respect of export of vehicles deserves to be deleted. Hence, ground No.8 of appeal is allowed.

Ground No. 10: Adjustment u/s.92CA(3) of the Act in respect of transaction with Hispano Carrocera, S.A (in short ‘Hispano’) :

Ground No.9 : Adjustment u/s. 92CA(3) of the Act in respect of interest on loans granted to AE- Rs.79,91,563/- :

TMETC, UK @ 3months GBP Libor + 0.5%. TPI, Singapore @3 months Sibor + 0.5%. Hispano, Spain @12 months Euribo + 1.25% The TPO did not accept the rate of interest charged by the assessee from its AEs. The TPO held that the assessee has borrowed funds in the domestic market at the rate ranging from 6% per annum to 14.75%. The TPO took average of the aforesaid rate i.e. 10.375% per annum and made addition of 3% per annum on account of credit risk, currency fluctuation risk and country specific risk and adopted the effective rate of lending at 13.375% and made adjustment of Rs.7,46,00,955/-. The assessee filed objections before the DRP against the aforesaid adjustment. The DRP following its own directions for earlier Assessment Years i.e. Assessment Year 2006-07 and 2007-08 granted part relief to the assessee and restricted addition to LIBOR + 200 bps. Thus, the Assessing Officer in accordance with direction of the DRP confirmed the adjustment on account of interest on loans to Rs.79,91,563/-.

We deem it appropriate to restore this issue back to the file of Assessing Officer with similar directions. In the result, ground No.9 of appeal is allowed for statistical purposes.

Ground No.11 –Adjustment u/s. 92CA of the Act in respect of purchase of property from Hispano Carrocera – Rs. 76,29,00,744/- : 43. During the period relevant to Assessment Year under appeal the assessee vide agreement dated 18/03/2008 purchased factory land and building from its AE i.e. Hispano in Spain for a total consideration of Rs.160.07 crores. The assessee determined the fair market value of the land and building on the basis of valuation report from an independent external Valuation Expert. The assessee paid Euro 24.70 million as per valuation report. The valuation certificate is at page 540 to 545 of the paper book and the purchase agreement dated 28/03/2008 is at page 516 to 539 of the paper book. The TPO rejected valuation report stating it to be not reliable and adopted Insurable Value of the property Euro 12.99 million stated in the valuation certificate. Thus, the TPO made adjustment of Rs.76,00,29,744/- (Rs.160,07,98,815 – Rs.84,07,69,071/-). The DRP rejected assessee’s objections against the aforesaid adjustment.

i) Johnson & Johnson Pvt. Ltd, 247 Taxman 136 (Bom) ii) CA Computer Associates Pvt. Ltd., 351 ITR 69 (Bom) (ii) Merck Limited, 179 TTJ 121 (Mum-Trib) affirmed by Hon’ble Bombay High Court in Income Tax Appeal No.744 of 2017 decided on 16/09/2019.

Ground No.12 – Adjustment u/s. 92CA(3) of the Act in respect of notional interest computed on alleged excess consideration paid for purchase of property from Hispano – Rs.8,35,512/- : 47. The ground No.12 of appeal is consequential to ground No.11. While adjudicating ground No.11 of the appeal, we have deleted the adjustment in respect of purchase of property from Hispano. In light of above findings ground No.12 has become infructuous and the same is dismissed as such.

Ground No.13 – Adjustment u/s. 92CA(3) of the Act in respect of property leased to Hispano adopting 10% of property as fair annual value :

Ground No.14 – Short TDS credit of Rs.2,94,05,368/- :

Ground No.15 – Interest u/s. 234D :

Ground No.17 & 18:

as alternate grounds to ground No.16 challenging legality of the order passed by TPO. The ld.Counsel for the assessee made a statement at Bar that he is not pressing additional grounds No.17 &

18. Thus, in view of the statement made by ld.Counsel for the assessee ground No.17 and 18 of the appeal are dismissed, as such.

Ground No.19 – Assessment order time barred by limitation, hence, liable to be quashed: 52. The assessee vide application dated 02/06/2022 has raised a legal ground assailing validity of assessment order on the ground of limitation. The additional ground raised by the assessee in ground No.19 reads as under:-

“19. On the facts and circumstances of the case, the learned TPO/AO erred in passing draft assessment order by following procedure laid down under section 144C of the Act without appreciating that provision of Section 144C is not applicable during AY 2008-09. Thus the assessment order passed is beyond the time limit prescribed under section 153 of the Income Tax Act, 1961 and hence bad in law and liable to be quashed.” In support of this ground of appeal, the assessee has placed reliance on the following decisions:

(i) M/s. Vedanta Limited vs. ACIT [WP No 1729 of 2011] 22/10/2019 for AY 2007- 08 - Hon'ble Madras High Court (ii) M/s. Truetzschler India Pvt. Ltd. Vs. DCIT in ITA No.-1949/Mum/2015 decided on 30/09/2020 for AY 2009-10. (iii) M/s A. T. Kearney Limited in decided on 25 May 2021. (iv) M/s Travelport L.P. USA for AY 2007-08 to AY 2010-11 – in ITA Nos 6500/Del/2012, 1480/Del/2012, 217/Del/2014, 218/Del/2014 decided on9th Nov.2020. (v) Jindal Steel & Power Ltd for AY 2010-11, 133 tax nann.com 514) (Del ITAT)

(vi) Pearson India Education Services Pvt Ltd for AY 2007-08, 142 taxmann.com 282 (Chennai), The additional ground raised by the assessee is purely legal and no further evidence is required to be adduced for its adjudication. Hence, the aforesaid legal ground raised as additional ground is admitted for adjudication.

“8.7 We find that both, the Division Bench of the Hon'ble Andhra Pradesh High Court and Single Bench of the Hon'ble Madras High Court in the case of Vedanta Ltd., has given contrary finding and so the issue before us is which findings should be followed. We find that there is no decision on the issue of the jurisdictional High Court. The judicial discipline demand that decision of the higher forum should be followed. Since the decision of the Hon'ble Andhra Pradesh High Court is of the division bench whereas the decision of the Hon'ble Madras High Court in the case of Vedanta Ltd. (supra) is of the single bench, and therefore we are inclined to follow the decision of the Hon'ble Andhra Pradesh High Court in the case of Zuari Cement Ltd. (supra), wherein it is held that procedure of issuing draft assessment order laid down in the section 144C is to be followed with effect from 1-10-2009. In the instant case, though the assessment year involve is 2009-10, the draft assessment order has been issued on 28-3-2013, much after the specified date of 1-10-2009 and therefore we do not find any violation of the law by the Assessing Officer in issuing the draft assessment order on 28-3-2013 and passing of the final assessment order dated 26-2-2014 by the Assessing Officer. Therefore, the final assessment order passed by the Assessing Officer is well within the limitation provided in law. Thus, the additional grounds raised by the assessee are accordingly dismissed”

54. Similar ground was considered by Co-ordinate Bench in the case of Wockhardt Ltd. vs. DCIT, 144 taxmann.com 27 (Mum-Trib). The Tribunal after considering various decisions, including the decision in the case of Vedanta Limited (supra) dismissed the ground by observing as under:

“ 9. In the present case, however, we have much simpler and much more objective criteria readily available, which is the strength of the bench of the Hon’ble non- jurisdictional High Court which have rendered the judgment. There is one decision of the division bench consisting of two Hon’ble judges, and there is another decision of a single judge bench consisting of only one Hon’ble judge. The plurality in the decision- making process makes the decisions of benches with a larger number of Hon’ble judges being placed on a higher pedestal than the decisions of the of the benches with a lesser number of Hon’ble judges. Explaining this principle, Hon'ble Gujarat High Court, in the case of CIT Vs VallabhdasVithaldas [(2015) 56 taxmann.com 300 (Guj)] has observed that “the law of precedent heavily relies on the collective decision-making process where multiple legal minds are simultaneously applied assisted by legal research and presentation of legal arguments. When such materials and legal contentions are processed by several judges, the decision that is rendered even if not unanimous has the advantage of input from larger number of legally trained minds”. As observed by a Full Bench of Hon’ble AP High Court in the case of CIT Vs B R Constructions [(1994) 202 ITR 222 (AP-FC)], “The principles applicable to Courts in India were laid down by Subba Rao, J. (as he then was) in Dr. K.C. Nambiar v. State of Madras AIR 1953 Mad. 351, which were approved by a Full Bench of our High Court in M. Subbarayudu v. State AIR 1955 Andhra 87... A single Judge is bound by a decision of a Division Bench exercising appellate jurisdiction. If there is a conflict of Bench decisions, he should refer the case to a Bench of two Judges who may refer it to a Full Bench. A single Judge cannot differ from a Divisional Bench unless a Full Bench or the Supreme Court overruled that decision specifically or laid down a different law on the same point”. Of course, as we have already noticed in our discussions earlier, so far as Hon’ble High Courts are concerned, the decisions of one of the Hon’ble High Court do not bind the other High Court, and all the Hon’ble High Courts being in the same tier of judicial hierarchy, it is not the call of judicial discipline either that one High Court follows the other High Court. What is undisputed, however, is the fact that a full bench decision is to be placed at a level higher than a division bench decision and that a division bench decision from the same forum, is to be placed at a level above the single judge bench decision forum. There cannot be two opinions on this aspect of the matter, and that is a universally accepted judicial practice, whereas the principle of following the view in favour of the assessee, as we have seen in our analysis earlier, is subject to several riders. Therefore, so far as choice between a division bench decision of a non-jurisdictional High Court and a single judge bench of a non-jurisdictional High Court is concerned, it is clear that a simple objective criterion of choice will require the division bench decision to be preferred over the single judge bench decision. Therefore, even though the decision of the Hon’ble Madras High Court, in Vedanta Ltd’s case (supra), cannot be said to per incuriam, for the simple reason that a Hon’ble High Court judgment does not constitute a binding precedent for any other Hon’ble High Court other than the Hon’ble High rendering such a judgment, the judgment of Hon’ble Andhra Pradesh High Court in the case of Zuari Cements Ltd (supra), being a division bench decision of Hon’ble non-jurisdictional High Court, is required to be followed even if it is contrary to a single bench judgment of another High Court in the case of Vedanta Ltd (supra). The impugned assessment order thus cannot be said to be barred by limitation. We uphold the impugned assessment order on this count, and decline to interfere in the matter on this jurisdictional ground. As we are deciding this issue on this short ground alone, all other contentions on merits remain open.

Order pronounced in the open court on Monday the 5th day of February , 2023.