M/S Delphi-Tvs Diesel Systems Limited v. Ito (Osd) / Secretary Dispute Resolution Panel

IN THE HIGH COURT OF JUDICATURE AT MADRAS Date : 17.08.2021CORAM: THE HON'BLE MR. JUSTICE S.M.SUBRAMANIAM W.P.No.26313 of 2017 M/s Delphi-TVS Diesel Systems Limited,Represented by its Authorized Signatory,Mr.Sriram Seshadri,Mannur, Thodukadu Post,Sriperambadur Taluk, Kanchipuram,Tamil Nadu - 602 105. ... Petitioner Vs. 1.ITO (OSD) / Secretary Dispute Resolution Panel - 2, 7th Floor, Income Tax Office, BMTC Building, 80 feet Road, Koramangala, Bangalore - 560 095. 2.Assistant Commissioner of Income-tax (OSD), Corporate Range - 1, No.121, M.G. Road, Nungambakkam, Chennai - 600 034.3.Deputy Commissioner of Income-tax - 1(2), 5th Floor, Tower I - BSNL Building, 16, Greams Road, Chennai - 600 006. ... Respondents Prayer : Petition filed under Article 226 of Constitution ofIndia praying for issuance of a Writ of Certiorari to call forthe records comprised in the impugned order bearing FileNo.346/DRP-2/BANG/2016-17 dated September 20, 2017 made underSection 144C(5) of the Act on the file of the first respondentand quash the same. For Respondents : Mrs.Hema MuralikrishnanSenior Standing Counsel ORDER The lis on hand is instituted questioning the legalvalidity of the order passed by the Dispute Resolution Panel inproceeding F.No.346/DRP-2/BANG/2016-17 dated 20th September,2017. 2. The petitioner was incorporated as a joint venturebetween M/s.Delphi Singapore and TVS Group India. It is engagedin the business of manufacturing of diesel fuel injectionequipment for cars, sports utility and multi utility vehicles,light commercial vehicles, tractors, single and two cylinderengines for original engine manufacturers. During AssessmentYear 2013-14, the petitioner was engaged in variousinternational and specified domestic transactions. Thepetitioner filed its return of income on 28th November, 2011declaring a total income of 'Nil'. Along with the return ofincome, the international and specified domestic transactions ofthe petitioner were duly reported in the Accountant's Report inForm No.3CEB filed in accordance with the provisions of IndianTransfer Pricing Regulations. 3. The second respondent passed a Draft Assessment Order onthe petitioner under Section 143(3) read with Section 144C(1) ofthe Income Tax Act, 1961 (hereinafter referred to as 'the Act')for the Assessment Year 2013-14. In the said Draft AssessmentOrder, there was no proposal for variation in income return bythe petitioner by disallowing of any expenditure under Section40(a)(i) of the Act, the second respondent however had proposedvariations in respect of other issues. 4. The petitioner filed its objections before the firstrespondent in respect of the proposal for variation of incomemade in the Draft Assessment Order. The first respondent, duringthe course of proceedings before it, issued a notice forenhancing the income of the petitioner. Hence, the enhancementnotice was issued in respect of Employee Secondment Charges andReimbursement of Expenses on the ground that the same is to bedisallowed under Section 40(a)(i) of the Act. 5. The petitioner filed its objections to the proposal forenhancement. The first respondent however rejected theobjections and directed the second respondent under Section 144C(5) of the Act to make disallowance under Section 40(a)(i) inrespect of Employees Secondment Charges and Reimbursement ofExpenses and passed the Assessment Order. The directions of thefirst respondent enhancing the income, in respect of variations,which are not proposed by the second respondent is beyond thepowers conferred under the Income Tax Act and hence, the petitioner has filed this writ petition seeking to quash thedirections of the first respondent. 5. The petitioner filed its objections to the proposal forenhancement. The first respondent however rejected theobjections and directed the second respondent under Section 144C(5) of the Act to make disallowance under Section 40(a)(i) inrespect of Employees Secondment Charges and Reimbursement ofExpenses and passed the Assessment Order. The directions of thefirst respondent enhancing the income, in respect of variations,which are not proposed by the second respondent is beyond thepowers conferred under the Income Tax Act and hence, the petitioner has filed this writ petition seeking to quash thedirections of the first respondent. 6. Mr.N.V.Balaji, learned counsel for the petitionervehemently contended that the respondents have no jurisdictionor powers under Section 144C(8) of the Act to issue such anotice seeking enhancement and therefore, the writ petition isto be considered. The learned counsel for the petitionercontended that sub-section (8) to Section 144C of the Act is inpari materia with Section 251 of the Act. The explanationsprovided under these two Sections are similar in nature and inrespect of Section 251 explanation clause, the Courts have heldthat whatever not available in the original Assessment Ordercannot be taken as an issue for the purpose of enhancement underSection 251. Applying the said principle in the present case,the Assessing Officer has not adjudicated the issue taken outfor the purpose of enhancement by the Dispute Resolution Paneland therefore, the Dispute Resolution Panel has no powers toissue notice for enhancement as the said issue raised was notconsidered by the Assessing Officer in the Draft AssessmentOrder. 7. The matter of variation is not proposed in the DraftAssessment Order, therefore, the explanation clause providedunder Section 144C(8) cannot be expanded so as to exceed thescope of the original provision i.e., Section 144C of the Act.In other words, it is contended that the explanationcontemplated must be within the main provision and exercise ofpowers under the explanation clause is impermissible under law.In the present case, when the variation is not adjudicated inthe Draft Assessment Order, the said variation cannot be takenout for the purpose of enhancement and thus, the DisputeResolution Panel has no powers to issue notice and reject theobjections filed by the petitioner. 8. In support of the said contention, the learned counselfor the writ petitioner relied on the judgment of the Hon'bleSupreme Court of India in the case of Commissioner of Income-taxV. Shapoorji Pallonji Mistry reported in [1962] 44 ITR 891 (SC)wherein the Hon'ble Apex Court held as follows:"In Gajalakshmi Ginning Factory v. CIT [1952] 22 ITR502, it has been held by the Madras High Court that itwould not be open to the AAC to introduce into theassessment new sources, as his power of enhancement isrestricted only to income which was the subject-matterof consideration for purposes of assessment by the ITO.In view of the provisions of sections 34 of the 1922Act and 33B of the 1922 Act by which escaped incomecan be brought to tax, there is reason to think that the view expressed uniformly about the limits of thepowers of the Appellate Assistant Commissioner toenhance the assessment has been accepted by thelegislature as the true exposition of the words of thesection. If it were not, one would expect that thelegislature would have amended section 31of the 1922Act and specified the other intention in expresswords. The Income- tax Act was amended several timesin the last 37 years, but no amendment of section 31(3) of the 1922 Act was undertaken to nullify therulings, to which we have referred. In view of this,we do not think that we should interpret, section 31of the 1922 Act differently from what has beenaccepted in India as its true import, particularly asthat view is also reasonably possible. the view expressed uniformly about the limits of thepowers of the Appellate Assistant Commissioner toenhance the assessment has been accepted by thelegislature as the true exposition of the words of thesection. If it were not, one would expect that thelegislature would have amended section 31of the 1922Act and specified the other intention in expresswords. The Income- tax Act was amended several timesin the last 37 years, but no amendment of section 31(3) of the 1922 Act was undertaken to nullify therulings, to which we have referred. In view of this,we do not think that we should interpret, section 31of the 1922 Act differently from what has beenaccepted in India as its true import, particularly asthat view is also reasonably possible. 9. In the case of The Trustees, Nagore Durgah Vs.Commissioner of Income-tax reported in [1954] 26 ITR 805(Madras), this Court has held as follows:"8. Under Section 66 the Tribunal could refer onlyquestions of law arising out of the order of theAppellate Tribunal and not other questions in view ofthe expression "arising out of such order". It hasbeen held that a question of law can be said to ariseout of an order of the Appellate Tribunal only it suchan order discloses that the question was raised beforethe Tribunal. In other words, a question would ariseout of an order, only if it had been raised and dealtwith before the Appellate Tribunal. The scope of thejurisdiction was considered recently by the CalcuttaHigh Court in Allahabad Bank Ltd. v. Commissioner ofIncome-tax [1952] 21 ITR 169 and by this Court in anearlier case, A.Abboy Chetty and Co. v. Commissionerof Income-tax Madras [1947] 15 ITR 442. It was pointedout by the Supreme Court in a recent case Commissionerof Income-tax, West Bengal v. Calcutta Agency Ltd.[1951] 19 ITR 191, that as the statement of the caseprepared by the Appellate Tribunal -under the rulesframed under the Income-tax Act is prepared with theknowledge of the parties concerned and they have afull opportunity to apply for any addition or deletionfrom that statement, the High Court in dealing withthe question should confine and restrict if self tothe facts contained in the statement of the case. TheHigh Court must start by looking at the facts found bythe Tribunal and answer the question of law on thatfooting. It should not depart from that rule andconvert itself into a fact finding authority, which isnot part of its advisory jurisdiction." 10. In the case of Commissioner of Income-tax V. RaiBahadur Hardutroy Motilal Chamaria reported in [1967] 66 ITR 443(SC), the Hon'ble Supreme Court considered the pleas which readas under: "The principle that emerges as a result of theauthorities of this Court is that the AppellateAssistant Commissioner has no jurisdiction, undersection 31(3) of the Act, to assess a source of incomewhich has not been processed by the Income- taxOfficer and which is not disclosed either in thereturns filed by the assessee or in the assessmentorder, and therefore. the Appellate AssistantCommissioner cannot travel beyond the subject- matterof the assessment. .......... There must be something in the assessment order toshow that the Income-tax Officer applied Ms mind tothe particular subject-matter or the particular sourceof income with a view to its taxability or to its non-taxability and not to any incidental connection. Inthe present case it is manifest that the Income-taxOfficer has not considered the entry of Rs. 5,85,000from the point of view of its taxability and thereforethe Appellate Assistant Commissioner had nojurisdiction, in an appeal unders. 31 of the Act, toenhance the assessment." .......... There must be something in the assessment order toshow that the Income-tax Officer applied Ms mind tothe particular subject-matter or the particular sourceof income with a view to its taxability or to its non-taxability and not to any incidental connection. Inthe present case it is manifest that the Income-taxOfficer has not considered the entry of Rs. 5,85,000from the point of view of its taxability and thereforethe Appellate Assistant Commissioner had nojurisdiction, in an appeal unders. 31 of the Act, toenhance the assessment." 11. In the case of Commissioner of Income-tax V. ScindiaSteam Navigation Co. Ltd. reported in [(1961) 42 ITR 589 (SC)],the Constitution Bench of the Hon'ble Supreme Court of Indiasummed up the principles as under:"39. The result of the above discussion may thus besummed up :(1) When a question is raised before the Tribunal andis dealt with by it, it is clearly one arising out ofits order.(2) When a question of law is raised before theTribunal but the Tribunal fails to deal with it, itmust be deemed to have been dealt with by it, and is,therefore, one arising out of its order. (3) When a question is not raised before the Tribunalbut the Tribunal deals with it, that will also be aquestion arising out of its order.(4) When a question of law is neither raised beforethe Tribunal nor considered by it, it will not be aquestion arising out of its order notwithstanding thatit may arise on the findings given by it." 12. Relying on the Principle No.4, the learned counsel forthe petitioner reiterated that when a question of law is neitherbefore the Tribunal nor considered by it, it will not be aquestion arising out of its order notwithstanding that it mayarise on the findings given by it. In the present case also, theissue regarding variations were not considered in the DraftAssessment Order and therefore, the Dispute Resolution Panelcannot pick up such an issue and send a notice for enhancement.Thus, the impugned orders are issued without jurisdiction andtherefore, the subsequent order of final assessment passed alsolost its legal validity and thus, the writ petition is to beallowed. 13.Mrs.Hema Muralikrishnan, learned Senior Standing Counselappearing on behalf of the respondents objected the contentionsraised on behalf of the petitioner by stating that theprovisions of the Income Tax Act, more specifically, Section144C(8) is an unambiguous and the Dispute Resolution Panel hasthe power to consider any matter arising out of the assessmentproceedings relating to the Draft Assessment Order. Thus, theonly question is that, whether the issue considered is arisingout of the assessment proceedings or not? In the present case,the objections filed by the petitioner itself would show thatthe issues raised for enhancement in the notice dated 12.09.2017is relating to the financial year 2012-13 and furthermore, theEmployees Secondment Charges are also included in theproceedings. When the subject matter was discussed and certainissues were not discussed, such issues can be taken up by theDispute Resolution Panel either to confirm or to reduce or toenhance the variations. When sub-section (8) provides power tothe Dispute Resolution Panel to enhance the variations proposedin the Draft Order and explanation also is provided, the DisputeResolution Panel has the power to consider any matter arisingout of the assessment proceedings, then, there is no reason tointerfere with the order passed by the Dispute Resolution Paneland inference offered by the petitioner is not in consonancewith the spirit of the provisions of the Income Tax Act. 14. The learned Senior Standing Counsel further contendedthat the writ petition itself became infructuous, in view of thefact that the final Assessment Order has been passed pursuant tothe Draft Assessment Order and the order passed by the DisputeResolution Panel. When a final Assessment Order is passed, then,the petitioner has to approach the Appellate Authority if at allany grievance exists and thus the writ petition is to berejected on that ground also. 15. The learned Senior Standing Counsel relied on theJudgment of this Court in the case of Hyundai Motor IndiaLimited V. Secretary, Income-tax Department reported in [2017]86 taxmann.com 284 (Madras) and said that the appellate remedyonce available is to be exhausted by the aggrieved person and inthe present case, the final Assessment Order is passed andtherefore, the petitioner has to approach the AppellateAuthority. In respect of the other ground raised regarding thejurisdiction of the Dispute Resolution Panel, the judgment ofthe Lahmeyer Holding GMBH V. Deputy Director of Income-taxreported in [2015] 59 taxmann.com 336 (Delhi) is relied upon andthe relevant paragraphs are extracted hereunder: "Section 144C(8) 23. One more aspect which needs some discussion is withregard to the submission that the DRP had no occasionto consider the issue of taxability of the transactioninvolving the transfer of the expired value of thecontract in exchange of shares as no variation had beensuggested by the Assessing Officer on this aspect ofthe matter in his draft assessment order. It wassubmitted by the learned counsel for the revenue thatthe jurisdiction of the DRP in terms of Section 144C(8)was that it could confirm, reduce or enhance thevariations proposed in the draft order, but it couldnot introduce a new element of tax or variation. Inresponse to this, the learned counsel for thepetitioner drew our attention to the Explanation addedafter Section 144 C(8). It was submitted by the learnedcounsel for the petitioner that by virtue of the saidExplanation, the DRP always had the power to considerany matter arising out of the assessment proceedingsrelating to the draft order, notwithstanding that suchmatter was raised or not by the eligible assessee.Section 144 C(8) and the Explanation appended theretoreads as under:- "144C (8) The Dispute Resolution Panel may confirm,reduce or enhance the variations proposed in the draftorder so, however, that it shall not set aside anyproposed variation or issue any direction under sub-section (5) for further enquiry and passing of theassessment order. Explanation. - For the removal of doubts, it is herebydeclared that the power of the Dispute Resolution Panelto enhance the variation shall include and shall bedeemed always to have included the power to considerany matter arising out of the assessment proceedings relating to the draft order, notwithstanding that suchmatter was raised or not by the eligible assessee." "144C (8) The Dispute Resolution Panel may confirm,reduce or enhance the variations proposed in the draftorder so, however, that it shall not set aside anyproposed variation or issue any direction under sub-section (5) for further enquiry and passing of theassessment order. Explanation. - For the removal of doubts, it is herebydeclared that the power of the Dispute Resolution Panelto enhance the variation shall include and shall bedeemed always to have included the power to considerany matter arising out of the assessment proceedings relating to the draft order, notwithstanding that suchmatter was raised or not by the eligible assessee." 24. The said explanation was introduced through theFinance Act of 2012. But, it was to take effectretrospectively from 01.04.2009. The Dispute ResolutionPanel's directions were issued after the Explanationhad come into operation. In any event, the Explanationis clarificatiory. Reading the Explanation with sub-section 144C(8), it is evident that the DisputeResolution Panel could examine the issues arising outof the assessment proceedings even though such issueswere not part of the subject matter of the variationssuggested by the Assessing Officer. In this light, itis significant that though the draft order had notproposed any addition with regard to the restructuringand the said transaction, yet, the DRP had asked fordetails of the restructuring and had examined thematter. After such examination, the DRP did not directany addition to be made in this regard. It is evidentthat the DRP formed an opinion that the transaction wasnot exigible to capital gains tax and, to contendotherwise, in the purported reasons for re-opening ofthe assessment, would be nothing but a 'change ofopinion' which is not permissible in law." 16. Relying on the above judgments, the learned SeniorStanding Counsel summed up by stating that the DisputeResolution Panel exercised its power as contemplated under sub-section (8) to Section 144C of the Act and thereafter the orderof the Dispute Resolution Panel was taken into consideration andan Assessment Order was passed and therefore, the petitioner hasnot established any acceptable ground for the purpose ofconsidering the writ petition. 17. Considering the arguments as advanced by the respectivelearned counsel for the petitioner as well as the learned SeniorStanding Counsel for the respondents, it is necessary for thisCourt to understand the spirit of Section 144C as well the sub-section (8) of the Income Tax Act. 18. Section 144C is 'Reference to dispute resolutionpanel'. The purpose and object of constituting a DisputeResolution Panel is to assist the Assessing Officer in respectof certain matters as the Panel consists of three Commissionerof Income Tax and such a Panel is considered as an Expert bodyfor the purpose of adjudicating certain issues and issueappropriate directions to resolve the matter in more appropriate https://hcservices.ecourts.gov.in/hcservices/ manner. Thus, the Dispute Resolution Panel is a Statutory bodyprovided enabling the competent authorities to get certainissues clarified and the Panel is empowered to adjudicate theissues by following the procedures as contemplated and issuesuitable directions to the competent authority for inclusion. 18. Section 144C is 'Reference to dispute resolutionpanel'. The purpose and object of constituting a DisputeResolution Panel is to assist the Assessing Officer in respectof certain matters as the Panel consists of three Commissionerof Income Tax and such a Panel is considered as an Expert bodyfor the purpose of adjudicating certain issues and issueappropriate directions to resolve the matter in more appropriate https://hcservices.ecourts.gov.in/hcservices/ manner. Thus, the Dispute Resolution Panel is a Statutory bodyprovided enabling the competent authorities to get certainissues clarified and the Panel is empowered to adjudicate theissues by following the procedures as contemplated and issuesuitable directions to the competent authority for inclusion. 19. Thus, the Dispute Resolution Panel is an Expert Panelconsisting of three Commissioners of Income Tax and in thiscontext, the provision is to be considered. At the firstinstance, the draft of the proposed order of assessment is to beforwarded to the Dispute Resolution Panel by the AssessingOfficer. Thereafter, on receipt of the draft order, the eligibleAssessee shall, within thirty days of the receipt by him of thedraft order, may accept the variations of the Assessing Officeror file his objections, if any, to such variation with theDispute Resolution Panel and the Assessing Officer. In the eventof acceptance, the Assessing Officer shall complete theassessment on the basis of the Draft Assessment Order, if noobjections are received within the period as specified in sub-section (2), then also the Assessing Officer shall pass finalorders. However, in the cases where any objections are filed,then, the Dispute Resolution Panel shall issue directionsreferred to in sub-section (5), after considering the issues ascontemplated under sub-section (6) of Section 144C of the Act. 20. Sub-section (7) contemplates that the DisputeResolution Panel may, before issuing any directions referred toin sub-section (5), make such further enquiry, as it thinks fit,or cause any further enquiry to be made by the Income TaxAuthority and report the result of the same to it. 21.As far as the present case is concerned, sub-section (8)is more relevant as the learned counsel for the petitionerstates that the Dispute Resolution Panel has no power to enhancebased on the variations which were not identifiable in the DraftAssessment Order. 22.In this context, close reading of sub-section (8) wouldreveal that "the Dispute Resolution Panel may confirm, reduce orenhance the variations proposed in the draft order so, however,that it shall not set aside any proposed variation or issue anydirection under sub-section (5) for further enquiry and passingof the assessment order." 23. Explanation to sub-section (8) reads as under:"Inserted by the Finance Act, 2012, w.e.f. 1-4-2009 [Explanation.- For the removal of doubts, it ishereby declared that the power of the DisputeResolution Panel to enhance the variation shallinclude and shall be deemed always to have included the power to consider any matter arising out of theassessment proceedings relating to the draft order,notwithstanding that such matter was raised or not bythe eligible assessee.]" 24. Drawing inference, the learned counsel for thepetitioner reiterated that the explanation cannot supersede themain provision i.e. sub-section (8). In this regard, this Courthas to consider the scope of explanation to sub-section (8). 23. Explanation to sub-section (8) reads as under:"Inserted by the Finance Act, 2012, w.e.f. 1-4-2009 [Explanation.- For the removal of doubts, it ishereby declared that the power of the DisputeResolution Panel to enhance the variation shallinclude and shall be deemed always to have included the power to consider any matter arising out of theassessment proceedings relating to the draft order,notwithstanding that such matter was raised or not bythe eligible assessee.]" 24. Drawing inference, the learned counsel for thepetitioner reiterated that the explanation cannot supersede themain provision i.e. sub-section (8). In this regard, this Courthas to consider the scope of explanation to sub-section (8). 25. Sub-section (8) empowers the Dispute Resolution Panelto confirm, reduce or enhance the variations proposed in theDraft Order. Therefore, the undisputed position is that theDispute Resolution Panel may confirm, reduce or enhance thevariations proposed in the Draft Order. The explanation to sub-section (8) says that, for removal of doubts, the power of theDispute Resolution Panel to enhance the variation shall includeand shall be deemed always to have included the power toconsider any matter arising out of the assessment proceedingsrelating to the Draft Order. The nexus between sub-section (8)and the explanation is to be considered for the purpose offorming an opinion regarding the jurisdictional power as raisedby the petitioners. Sub-section (8) gives power for enhancement.Explanation is provided to remove the doubts. The explanationclarifies that the Dispute Resolution Panel have the power toconsider any matter arising out of the assessment proceedingsrelating to the Draft Order. Thus, the requirement is that thevariations proposed for enhancement must be relatable to theDraft Assessment Order and such issues must be arising out ofthe assessment proceedings. The very purpose and object ofexplanation is to ensure that in the event of any non-consideration of a particular point in the Draft AssessmentOrder by the Assessment Officer, the Dispute Resolution Panelbeing a Specialised Panel is provided with the power to proposesuch variations, relating to any matter arising out of theassessment proceedings. Therefore, the power of enhancementcontemplated under sub-section (8) is clarified through theexplanation. Such a clarification cannot be construed as'excessive power' as in the absence of such clarification by wayof an explanation, the very purpose and object of sub-section(8) to Section 144C would be diluted. 26. Power conferred on the Dispute Resolution Panel toconfirm enhance or reduce is certainly guided under theprovisions of the Act. Explanation to sub-section (8) of Section144C of the Act, stipulates that enhancement is to be made withreference to the matter arising out of the assessmentproceedings relating to the Draft Assessment Order.Responsibility of the Dispute Resolution Panel, once anobjection is raised by the eligible assessee, to scrutinise the 26. Power conferred on the Dispute Resolution Panel toconfirm enhance or reduce is certainly guided under theprovisions of the Act. Explanation to sub-section (8) of Section144C of the Act, stipulates that enhancement is to be made withreference to the matter arising out of the assessmentproceedings relating to the Draft Assessment Order.Responsibility of the Dispute Resolution Panel, once anobjection is raised by the eligible assessee, to scrutinise the Draft Assessment Order and verify the correctness or otherwiseand thereafter, issued suitable directions as it deems thoughtfit for the purpose of incorporation in the assessment order.Thus, the Explanation contemplates that any variation arisingout of the assessment proceedings relating to the DraftAssessment Order shall be proposed and on such proposal, anopportunity is to be provided to the eligible assessee to defendtheir case. Thus, the requirement as contemplated is that theDispute Resolution Panel is to provide pre-decisional hearing tothe assessee in order to comply with the principles of naturaljustice. Once a Dispute Resolution Panel identified and pickedup such variations arising out of the assessment proceedingsrelating to the Draft Assessment Order, then such variations areto be communicated to the Assessee, enabling them to file theirobjections on such variations. On receipt of objections, thesame is to be disposed of meaningfully. 27. There is a clear nexus between sub-section (8) and theExplanations provided to the sub-section. Explanation fulfilsthe purpose and object sought to be achieved under the saidprovision. In the absence of the explanation, there is apossibility of misinterpretation by either of the parties andtherefore, the explanation became necessary as far as the sub-section (8) is concerned and thus, the contention raised by thepetitioner that the Explanation exceeds the provision isincorrect and thus, rejected. 28. Regarding the judgment cited by the learned counsel forthe petitioner in the case of Commissioner of Income-tax Vs.Scindia Steam Navigation Co. Ltd., the Hon'ble Supreme Courtsummed up four principles and such four principles are relatableto the question of law, which was neither raised before theTribunal nor considered by the Tribunal and in suchcircumstances, the Hon'ble Supreme Court of India held that itwill not be a question arising out of its order notwithstandingthat it may arise on the findings given by it. Such an issuedoes not arise at all in the present case. In the case beforethe Hon'ble Supreme Court and the principles summed up wouldreveal that the particular question of law was neither raisedbefore the Tribunal concerned nor considered by the Tribunal andtherefore, the same will not be a conclusion arising out of itsorder. However, in the present case, the variations raised bythe Dispute Resolution Panel in its notice is relatable to theDraft Assessment Order and more specifically, the objectionsfiled by the petitioner itself reveals that they have dealt withthe facts in respect of Employee Secondment Charges and whilenarrating the background, the details are also furnished. Thus,the Dispute Resolution Panel in exercise of its powers as guidedin the Explanation clause, issued notice and received objectionsand thereafter, proceeded with the matter by following the procedures as contemplated. The Dispute Resolution Panel beingan Expert Panel, is bound to ascertain the correctness orotherwise of the Draft Assessment Order passed by the AssessingOfficer. In the event of identifying omission or commission orexcessive exercise, the Dispute Resolution Panel is empoweredunder sub-section (8) to confirm or reduce or enhance thevariations. The explanation is provided only to remove thedoubts and therefore, the explanation cannot be read inisolation and certainly in consonance with the main provision inthe present case. The Explanation undoubtedly fulfils thepurpose and object of sub-section (8) to Section 144C of theIncome Tax Act. Thus, there is no impediment as such for theDispute Resolution Panel to consider any matter arising out ofthe assessment proceedings relating to the Draft AssessmentOrder and no matter, such an issue was discussed in the DraftAssessment Order or not, but it should not be totallyunconnected with the assessment proceedings or the DraftAssessment Order. This being the purposive interpretation to beadopted for the purpose of defining Section 144C and sub-section(8) as well as the Explanation, this Court is of the consideredopinion that proposed notice issued to the writ petitioner isrelatable to the assessment proceedings and to the DraftAssessment Order. Thus, there is no infirmity in respect ofexercise of powers by the Dispute Resolution Panel and thenotice issued for enhancement. The petitioner submitted itsobjections and such objections were also disposed of andfinally, the assessment order was admittedly passed by theAssessing Officer on 05.10.2017. 29. The learned counsel for the petitioner though pointedout that the final Assessment Order is anti-dated, this Court isof an opinion that such disputed facts are to be adjudicatedbefore the Appellate authority, if the petitioner has chosen tofile an appeal against the final assessment order. However, thesaid point raised may not be relevant as far as the issuesraised in this writ petition is concerned. Thus, the petitioneris at liberty to raise all such grounds before the Appellateauthority, if any appeal is filed against the final assessmentorder. 30. In view of the facts and circumstances, the followingorders are passed : -(i) The relief as sought for by the petitionerin the present writ petition stands rejected; (ii) The petitioner is at liberty to prefer anappeal against the final Assessment Order passed bythe competent authority on 05.10.2017 within a periodof four weeks from the date of receipt of a copy ofthis order in a prescribed manner and by complyingwith the provisions of the Act and Rules; (iii) In the event of filing any such appeal, thecompetent Appellate Authority shall condone the delay,if any taking into consideration the pendency of writpetition before this Court and dispose of the appealon merits and in accordance with law and by affordingan opportunity to the writ petitioner as expeditiouslyas possible. 31. With these directions, the Writ Petition standsdisposed of. No costs. Sd/-Assistant Registrar(CO) //True copy// Sub Assistant Registrar SglTo1.ITO (OSD) / Secretary Dispute Resolution Panel - 2, 7th Floor, Income Tax Office, BMTC Building, 80 feet Road, Koramangala, Bangalore - 560 095.2.Assistant Commissioner of Income-tax (OSD), Corporate Range - 1, No.121, M.G. Road, Nungambakkam, Chennai - 600 034.3.Deputy Commissioner of Income-tax - 1(2), 5th Floor, Tower I - BSNL Building, 16, Greams Road, Chennai - 600 006. +1cc to Mr.N.V.Balaji, Advocate SR.No.41150+1cc to Mrs.Hema Muralikrishnan, Advocate SR.No.41049 W.P.No.26313 of 2017 SSV(CO)GMY(01/09/2021)