Wp/8528/2019 Of M/S. Tns India Private Limited v. The Assistant Commissioner Of Income Tax Circle- 2(2)

"/ HIGH COURT FOR THE ST- ; ;" :, [j ]i*iF,fffi{l*:,:'.;^ " ^,^- ; ;" :, [j ]i*iF,fffi{l*:,:'.;^ " ^,^ [ [3386 ]I 1?['fJ"lii,u#iiliff .",[?,1??T PRESENT THE HON,BLE SRP' sAM KosHYrHE H.N,BLE ;E LAXMI NARAYANA ALISHETTY"*,rrrr,affitcE WRtTPETITloNNO: 853 AND85280F 2015 WP No.8530F 2 019: Between: M/s TNS lndia prpa rr< p ro'i,li;",i t,Jfi ;",..: ti:,l __ _v,vv(J J,.i" ill R;;o?,,v,duidpur, l.^?, i nyoerabad f :1, rh e v_A s ce n d a s r r..U"?OIOT?J*.*, AND ' Ullf,i of lndia, rep. by [s secretary. Minisrry of Finance, south Btock, New2. The Assistan, ao-T,f:,^o,L9l of tncome.Tax, 5th Froor, sisnature Circte_ 2e).Hyderabad, Roomr"*.ii,'rJttl'gilo ,,,ono"rr., " [iSariJ,i ]Hyderabad_' il:: fl ?: t'I^ ?", [g1's;#:?L'd' ]2 (2), H y d e r a b ad, Roo mllff#; lff ;?rt[;,* peririon under Articte 226 of the Constitution of lndia p*yiff:[:ih.i;:circumstances p*yiff:[:ih.i;:circumstances pleased to a writ stated of certiorari, in the affidavit or a writ fired in the therewith, the nature of certiorari, High court or any othermay beappropriate writ, order or direction under artiile 226t227 ,n" a"""nr;;;'.,lndia, ca,ing for the records of the petitioners ", case so far as they rerate to thecase so far as they rerate to theissue of (a) the rmpugned consequentiar order under section 254 read withsection 143(3) for assessment year 2006 - 07 dated Aprit 20, 2018 (Exhibit p),(b) the impugned rectification order gn6s7 section 154 (Exhibit e) for(b) the impugned rectification order gn6s7 section 154 (Exhibit e) forassessment year 2006_ 07 dated October 12, 2O1B and (c) the impugned12, 2O1B and (c) the impugnedintimation bearing reference no. F.No.ACrr -2(2)t245t201g-1g dated June 15,2018 (Exhibit R) and, after going through and examining the question of thevalidity, propriety and regarity thereof, be preased to decrare the same to bevalidity, propriety and regarity thereof, be preased to decrare the same to beillegal and unenforceable, and, quash the same and directing the Respondentsto pass necessary orders granting deduction under section 10 A of the Act asto pass necessary orders granting deduction under section 10 A of the Act as w of income [as amended ][bY ][it]Der the [claim ][made ][by ][the Petitioner ][in its ][return]s, [(b) ][grant ][credit for taxes]of the [assessment ][proceedins]issue [a ][refund ][of ][Rs']:H,iJ "ou"" (c) deducted [at ][sollrce ][of Rs ][2'69'19'506 ][and']lo,uu,r, [,t ][t ][as ][comPuted ][in ][(Exhibit ][T)] of [PraYing ][that ][in ][the]IAN[o:][ '1 ][0F][ 2019]der [Order ][39 ][Rule ][1 ][& ][2]Petition [un]ort [of ][the ][Petition' ][the ][High]circumstances [sta][ted ][in ][the ][affidavit ][filed ][in ][suPP]I disPosal [of ][this ][Petition ][' ][the]Court [may ][be ][Plea][sed ][Pending ][the ][hearing ][and ][fina]pursuant [to ][the ][impugned]strained [from ][taking ][any steps]ResPondents [be ][re]45/2018-19 [dated June ][15']reference [no ] [No ][ACIT-2(2)/2]intimation [bearing]2018 [(Exhibit ][R)] IA NO:2OF 2019that [in ][the ][circumstances ][stated]der [Section 151 ] [Prayrng]Petition [un]e High [Court ][maY ][be ][Pleased ][to]ed in [suPport ][of ][the Petition' ][th]in the [aff ][idavit ][fil]copY [of ][imPugned order ][dated]e filing [of the original / ][certified]dispense [with ][th]20th [APril 2018] Section [151 ][cPc ][praving ][that ][in ][the ][circumstances ][stated]^""ffi##der in the [affidavit ][fifed ][in ][support ][of ][the ][petition' ][the ][High ][Court ][may ][be ][pleased ][to]leave [to ][the ][petitioner company ][to ][carry ][out ][the ][amendment ][by ][changing]grant the Petitioner [Company's ][name ][from ] [lndia ][Private ][Limited' ][to 'Kantar ] lndia [Private ][Limited' ][in the ][cause ][title ][of ][the ][writ ][petition and ][other]miscellaneous [petitions ][and ][also ][wherever ][it ][is ][required ][in ][the proceedings ][in]the interest [of justice] Section [151 ][cPc ][praving ][that ][in ][the ][circumstances ][stated]^""ffi##der in the [affidavit ][fifed ][in ][support ][of ][the ][petition' ][the ][High ][Court ][may ][be ][pleased ][to]leave [to ][the ][petitioner company ][to ][carry ][out ][the ][amendment ][by ][changing]grant the Petitioner [Company's ][name ][from ] [lndia ][Private ][Limited' ][to 'Kantar ] lndia [Private ][Limited' ][in the ][cause ][title ][of ][the ][writ ][petition and ][other]miscellaneous [petitions ][and ][also ][wherever ][it ][is ][required ][in ][the proceedings ][in]the interest [of justice] IA NO:2OF[2021]'1 51 CPC praying that [in ][the ][circumstances ][stated]Petition [under ][Section ]in the affidavit [filed ][in ][suPP][ort ][of ][the petition' ][the ][High ][Court ][may ][be ][pleased ][to]WP No.853 [of ][2019 ][bY]the above [writ ][Petition ][i.e..]expedite [the ][hearing ][ln]advancing the [date ][of]hearing ftom [31 ][.08.2022 ][lo]today or any [nearest]convenient date as thisHon'ble High Court deemsfit and proper in thecircumstances of the case Counsel for the Petitioner: SRt DEEpAK CHOPRA, COUNSEL FOR SRI G. NARENDRA CHETTY pleased circumstances perition under to a writ stated of certiorari. or Articte in the 226 affidavit of a writ the fired therewith, Constitution in the nature of of the tndia certiorari. or High court ,.";f;il:ir,".T;:any may otherbeappropriate writ. order or direction under articre 226t227 0f the constitution oflndia ca'ing for the records of the petitioners case so far as they rerate to theissue of (a) the lmpuoned TP oGE passed by the second Respondent datedJanuary 07, 2o1g (Exhibit M). (b) the rmpugned consequentiar order undersection 254 read with section 143(3) for A.y. 2008 - 09 dated January 22. 2o1g(Exhibit N) (c) the rmpugned Inlimation urs. 245 0f the Act (Exhibit o). and,after going through and examining the question of the validity, propriety andlegality thereof, be preased to decrare the same to be iflegar and unenforceabre,and' quash the same and directing the Respondents to pass necessary ordersas per the craims rirade by the petitioner in its revised return of income. (b)issuea refund of Rs. 14,26,56.136 as computed in (Exhibit p) lA NO: 1 OF 2019 Petition under section 1s1 cpc praying that In the circumstances statedin the affidavit filed in support of the petition, the High court may be preased topending the hearing and final disposal of this petition, the respondents berestrained from taking any steps pursuant to the impugned intimation undersection 245 dated January 22 zo19 bearing reference No.F. No. AABCN22TBF/AY 2008-09 (Exhibit O) IA NO[:20]F2019ction ['1 ][51 ] [praying ][that ][in ][the ][circumstances stated]Petitio[n ][under ][Se];;;;" [., ][the petition' ][the ][High ][court ][mav ][be ][pleased ][to]in the [affidavit ][frled ][in ][s]of the [Original/certified ][copy ][of ][impugned ] [order]disPense [with ][the ][filing]dated [January ] ' [2019] IA Noi1oF2[oz',l]der section [1 ][51 cPC ][praylng][ that ][in ][the ][6il6urnsf3n6ss stated]Petition [un]the [High ][Court ][may ][be ][Pleased]in the [affidavit ][filed ][in ][support ][of ][the ][petition']out the [amendment ][bY changing]grant [I][eave ][to ][the ][Petitioner Company ][to ][carry]a Private [Limited' ][to 'Kantar ] the [Petitioner Company's ][name ][from ]['TNS ][lndi]of the [writ ][Petition ][and ][other]lnd iaPrivate [Limited ][in ][the ][cause ][title]tt is required [in ][the ][proceedings ][ln]miscellaneous [petitions ][and ][also ][wherever ]the [interest ][of ][iustice and ][be ][pleased] IA Noi1oF2[oz',l]der section [1 ][51 cPC ][praylng][ that ][in ][the ][6il6urnsf3n6ss stated]Petition [un]the [High ][Court ][may ][be ][Pleased]in the [affidavit ][filed ][in ][support ][of ][the ][petition']out the [amendment ][bY changing]grant [I][eave ][to ][the ][Petitioner Company ][to ][carry]a Private [Limited' ][to 'Kantar ] the [Petitioner Company's ][name ][from ]['TNS ][lndi]of the [writ ][Petition ][and ][other]lnd iaPrivate [Limited ][in ][the ][cause ][title]tt is required [in ][the ][proceedings ][ln]miscellaneous [petitions ][and ][also ][wherever ]the [interest ][of ][iustice and ][be ][pleased] trNt#p]!!f-a" *aer Section 1Sl CpC praying [that ][in ][the ][circumstances stated]in the [affidavit filed ][in ][support ][of ][the petition, ][the ][Hiqh ][court ][may ][be ][pleased ][to]expedite [the ][hearing ][in ][the above ][writ ][petition ][i'e ][' ] [No-8528 ][of ][2019 ][by]advancing [the ][date ][of ][hearing from ][31 ]['OB ][2022 ][to ][today ][or ][any ][nearest]convenient [date as this ][Hon'ble High ][Court deems ][fit ][and ][proper ][in ][the]circumstances [of ][the case ][']Counsel [for ][the ][Petitioner: ] [C!{-O'PILIOUNSEL ] iCr o. [cHErrY]Counsel [for ][Respondent'' ][llt' ][X' ] The Court [made ][the ][following: ] THE HON'BLE SRI JUSTICE P.SAM KOSHYAND THE HON'BLE SRI JUSTICE LAXMI WRIT PETITION Nos.853 & 8528 [of2Ol9] COMMON ORDER:(per Hon'ble Si Justice P.SAM [KOSHY)] The challenge in these two [writ ][petitions ][a-re ][the] orders [dated ][20.04 ][-2O ][1B ][issued ][by ][the ][respondent]consequential No.3/The Deputy [Commtssioner ][of ][Income ][Tax-2 ][under ][Section]254 read with Section [143 ][of ][the ][Income ][Tax ][Act, ][196 ][1, ][(for]short the "Act") [for ][the ][assessment ][year ][2006-2007 ][and ][the]rectification [order ][dated ][l2'lO'2O18 issued ][by ][the]impugned No.2/The [Assistant Commissioner ][of ][Income ][Tax]respondent underSectionl54oftheActforthesalneassessmentyear.ForConvenience,W.P.No.853of2Olgistakenup,sofarasthefactsare concerned. 2,HeardMr.DeepakChopra,learnedcounselappearingonbehalf of Mr.Narendar [Chetty' learned ][counsel ][for ][the ][petitioner]andMs'K.MamataClroudaSl,learnedcounselforthere spondent-DePartment The whole whole [[dispute ][in ][the ][two ][writ ][petitions originates ]][[in ][the ][two ][writ ][petitions originates ]][[the ][two ][writ ][petitions originates ]][[two ][writ ][petitions originates ]][[writ ][petitions originates ]][[petitions originates ]][[from]] 3. The whole whole [[dispute ][in ][the ][two ][writ ][petitions originates ]][[in ][the ][two ][writ ][petitions originates ]][[the ][two ][writ ][petitions originates ]][[two ][writ ][petitions originates ]][[writ ][petitions originates ]][[petitions originates ]][[from]]an order [passed ][by ][the ][Income ][Tax Appellate ][Tribunal ][(for ][shorl] the "Tribunal") in [No.108/H1'd/2011 ][for ][the assessment ])iear2006-2007. The Tribunal [vidc ][order ][clated27.06.2O14 ][had ][partly]allorved an appcal of the [petitioner/assesse.] 4. For the aloresaid [year, ]thc [petitioner/ ][assesse ][had ][filed ][its]return after cl:uming deductions [r-rnder ][Section ][1OA ][of ][the ][Act.]The said return of the petitioner/assesse [\\'as ][subjccted ][to]scrutiny by the Assessing Officer. [Thc ]Assessing Oificcr [ncting]certaln international transactions being mirdc [by ][thc]petitioner/ assesse referred the matter to the Transfer PricingOfficer (TPO) under Section 92CA(1) for determining the [Arm's]Length Price (ALP). On examination, the TPO noted that whileselecting comparables in ITES-BPO category, the petitioner/assesse has wrongly applied incomparables with thecomparables ignoring the provisions ol rule lOB(a) of the Act.Finally, the TPO passed a draft assessment order. Thepetitioner/ assesse raised objections before the DisputeResolution Panel (DRP) who in l.urn rejected the same, leading tofiling of ITA before the Tribunal. 5. The Tribunal after due consideration of all the contentionsput forth bv the petitioner/ assesse found that there were certainitems which were not properly assessed by the Assessing Officer. tEEiE tEEiE\ ffi.-{ \ (t/ To the aforesaid extent, the appeal [of ][the ][petitioner/ ][assesse ][was]partly allowed and the matter [was ][remitted back ][to ][the ][fiie ][of]Assessing Olficer with [a ]direction [[o ][look ][into ][the ][aspect ][and]take a decision in [the ][matter alter ][veri$ing ][the ][claim ][of ][the]petitioner / asse sse and [giving ][a ][fair and ][reasonable ][opportunity]of hearing. [The order ][of ][the ][Tribunal ][was ][one which was ][passed]on 27.06.2014. [Now ][the ][consequential ][order ][pursuant ][to ][the]remand by [the ][Tribunal ][has ][been passed ][by ][the ][Assessing]Officer only [on ][20.O4 ][2}la' It is this ][passing ][of ][the]consequential [order ][dated ][20 ]['O4 ]['2018 ][which ][is the ][bone ][of]contention [in ][the ][present rvrit petitions'] 6. The contention [is ][as ][to ]["whether ][the consequential order]could have [been passed ][by the ][Assessing ][Ofircer beyond ][the]prescribed [period ][of ][time ][as ][is ][envisaged ][under ][Section ][153 ][(2A)]of the Act.,, [Secondly, ][uwhether aJter ][a ][remand is ][made ][by ][the]the [consequential]Tribunal [while ][aliowing ][an ][appeal ][in ][part']one under [Section]order that [needs ][to ][be ][passed ][would ][be]153(2A) [or ][would ][be ][under ][Section ][153(3) of ][the ][Act''] 7. For ProPer [aPPreciatton][ of ][the ][issue ][raised ][in ][the writ]petitions [it ][would ][be ][relevant ][at ][this juncture ][to ][quote ][the]aforesaid [two ][provisions ][of ][law under ][the Act ][i'e' ][Section ][153(2A)] \E=-F..1_#E \- r..'t:*.i.i ii'! [t ]'J \ and Section 153(3) u,hich for read1. refercnce are reproduced herein under: "(2A) Notluithstanding angthinq contained h sub-sections (1),(1A), (l B) and (2), in relation fo lhe a-ssessm ent Aear comnrcncingAear, on the [an ]l't [order ]dag of [of ]April fres h I assessmenf 971 , and ang in subser1tent assessmerltpursuance of o.n orderunder section 250 or section 254 oJ section 263 of seciion, settingasirle or cancelllng an assessme,l L, ntag be marle at antl timebefore the e4tiry of one gear from tlrc encl of Lhe frnanciat 11ear intuhich the order under sectiott 250 of section 254 is recei.ued bgIhe Pnncipal ChreJ Commissioner or Chief (.ommissioner orPincipal Commissioner or Cnmmissroner or, as lhe case ntag be,lhe order under section 263 or section 264 is passecl bg thePincipa! Chief Commissioner or Chief Comrniss,oi., o, pnicipalC ommis s ione r o r Commts s io rLer. "(3) .The prouistons of sub secrions (t), (tA), ltB) and (2) sha notappLA lo the folLowing classe-s o;f as.sessmenls, ,ro..r"r.-"rztaand recomputatons uthich maq, sthject to the prouisions o/ sulr.section (2A), be completed at anA time- o r*t (it utherethe assessmenl, rea.ssessmenf orrecomputotion is made on lhe assessee or anA persondirection ln <nrtsequence. contained of -or. ln to giue effect to ang finiing orai orii, und_er section 25O,254, 260, 262, 263 or 264 or in qn order of anA courtreferencc in a proceeding under this ot.henuise Act:than bA Luag oj apieat or (ii! ulere, in the cc.se of tt firm, an assessment is mad.eassessmenl on a partner made of on the the firm ftnt under in consequenre sect'ion 147.,,of an The provision of Section 153 went in for an amendment whichwhich came into force from 01.06.2016. The amended provision under Section 1s3(3) also is being reproduced herein under: :ili;i-;tr:fr2!:f ,l::^' I::: co ntai ne d tn sub's e ct ion s ( I ) t, ( 1 A)l- ;:: ?:.?^i:!*i:{i;;';;;l:""ff ;::li:t;:l,Z:i,Z;::X:;*;: #,': i",':: .:[ ; : :, : i 2 6 4, s e t, i n i ;; ;; ;; iL,,. t r i n s o n^"ab";;;;;,;";'i,:;"";:r:;f ;:''":_i,?".!;;i"!,T [jX,XN:i,il;] ,/ ,,. : "ixii!:{!,.:!:*:iilii!^,"t,i!;",4:;;:!:;,sec,ion254syg;gg;ytr,*,r,x;l:itr.l:"i;:,twtmissioner, (ii! ulere, in the cc.se of tt firm, an assessment is mad.eassessmenl on a partner made of on the the firm ftnt under in consequenre sect'ion 147.,,of an The provision of Section 153 went in for an amendment whichwhich came into force from 01.06.2016. The amended provision under Section 1s3(3) also is being reproduced herein under: :ili;i-;tr:fr2!:f ,l::^' I::: co ntai ne d tn sub's e ct ion s ( I ) t, ( 1 A)l- ;:: ?:.?^i:!*i:{i;;';;;l:""ff ;::li:t;:l,Z:i,Z;::X:;*;: #,': i",':: .:[ ; : :, : i 2 6 4, s e t, i n i ;; ;; ;; iL,,. t r i n s o n^"ab";;;;;,;";'i,:;"";:r:;f ;:''":_i,?".!;;i"!,T [jX,XN:i,il;] ,/ ,,. : "ixii!:{!,.:!:*:iilii!^,"t,i!;",4:;;:!:;,sec,ion254syg;gg;ytr,*,r,x;l:itr.l:"i;:,twtmissioner, A ptain reading of the aforesaidstatutory provisions of law,particular$ sub_section 2A of Section 153, it would clearlyindicate that there is a specific timelimit envisaged in the saidsub-section for completion of the assessment, reassessment orrecompuhtion. What is also appalsntly evident is that sub_section (2A) itself was enacted with a clear intention of fixing atime limit for the order of freshassessment to be passed inrespect of matters which arise on account of an order underSection 25O, 254, 263 or Section 264 of the Act whereby theorder of the Assessing of'cer is set aside or cance,ed.8What also is to be seen is that sub_section 3 of Section 153(unamended) dealing witha situation where a pri^cdEalng isinitiated under Section 2A,the provisions under Section (1), 'afld [2 ][of ][the Act shali not ][aPPIY][ At ][the ][same ][r"lme ](1A), [(18)]appreciated [is ][that][ even ][under ][the]\^rhat [also][ needs ][to ][be]of sub-section [3 ][which ][came ][into ][force ][t'ith]amended Provlslon016, [the ][law ][makers ][again ][have inserted ][a]effect [lrom ][01 ][06'2]etion [of ][the ][assessment ][']time [limi.t ][for ][comPl] 9Referring [to ][the aforesaid ][provtsron][ of law, ][learned ][counsei]contended [that ][the]the Petitioner [categorically]appearing [for]been Passed [after ][a]the instant [case ][having]proceedings [in]considerable [period ][of ][time ][and ][the ][tlme ][limit ][was ][also ][lapsed ][as]is required [under ][sub-section (2A) ][of ][Section 153' ][Learned]counsel [appearing ][for the ][petitioner ][in ][support ][of ][his]conrentions, [relied ][upon ][the ][decision ][of ][High ][court ][of ][Gujarat ][in]the casc of [Instntments ][Control Co' ][a' ][Chief ][Cornmissioner ][of]Income'tax'l [& ][21' A ][sirnilar view ][has ][also ][been ][talen ][by ][the]High Court [of ][Delhi ][in ][the ][case ][of ][Commissioner ][oJ ][Incorrr.e'tqx']a. Bhan [Textite ][(P') ][Ltd'2 ][and ][also ][in the ][case ][of ][Nokia ][India](P.) Ltd. a, [Deputg ][Cornmissioner ][of ][Incone-taxs ][' ] [similar]view has also [been taken ][by ][the ][High Court ][of ][Kerala ][in ][the ][case]of DR R.P. [PATEL, ] [HOUSE' COLLEGE ][ROAD'] ' 1zoos1 zrs crn:66 (2008) 30o,rR 176 Delhi - ;11??"-! a* ;11??"-! a* a* [crR ][366 ][Derhi ][= ][(2008) ][3oo ][lrR ][176 ]Dethi - ;11??"-! a* ;11??"-! a* a* (2O17) 35 taxman.com 291 (Dethi) lit KOTTAYAM VERSUS THE ASSISTANT COMMISSIONER OFINCOME TAX, CIRCLE - 1, KOTTAYAM in WpC No. 29 I93 of2008 (A) decided on 09.03.20 15.2008 (A) decided on 09.03.20 15. lO. Per contra, learned counsel for the respondent-Departmentopposing the petition submits that it is \vrong on the part of thepetitioner/ assessee to state that the authority is denude of itspowers after the prescribed time limit is provided under sub-section (2A) of Section 153 of the Act. ' 1zoos1 zrs crn:66 (2008) 30o,rR 176 Delhi - ;11??"-! a* ;11??"-! a* a* [crR ][366 ][Derhi ][= ][(2008) ][3oo ][lrR ][176 ]Dethi - ;11??"-! a* ;11??"-! a* a* (2O17) 35 taxman.com 291 (Dethi) lit KOTTAYAM VERSUS THE ASSISTANT COMMISSIONER OFINCOME TAX, CIRCLE - 1, KOTTAYAM in WpC No. 29 I93 of2008 (A) decided on 09.03.20 15.2008 (A) decided on 09.03.20 15. lO. Per contra, learned counsel for the respondent-Departmentopposing the petition submits that it is \vrong on the part of thepetitioner/ assessee to state that the authority is denude of itspowers after the prescribed time limit is provided under sub-section (2A) of Section 153 of the Act. 11, It was also the contention of the learned counsel for therespondent-Department that the provision of Section [(2A) ]wouldnot be applicable in the instant case as the appeal was notaltowed in toto, but was partly allowed. Therefore, the Tribunalas a-1so the Commissioner (Appeals) have erred in as much [as]reaching to the said conclusion. It was further agitated thatsince it is only the term "may" which is used by the law [makers]while fixing ttie time limit for fresh assessment order to [be]passed after the matter stands remitted back from the Tribunalor a Court of appeal, it cannot [be ][treated ][as a ][provision which ][is]mandatory. Rather, it is only [a ][nature of ][directive ][which ][was]issued. 12. Accordinq to rhe learned counsel for the respondentDepartment thc ordcr or directive given by the Tribunal isrequired to bc enforced in its letter and spirit, nonetheless,prescribing a rirne limit for the fresh assessment. It u'as furthercontcnded rl)at the order of the Tribunal or the Court of law,cannot be lelj unenlorceable or unexecutable only on account ofthe time limit ha.,ing been lapsed u,ithin u,hich the authoritv \\,asrequired to p215" the order of the reassessment. 13. It u,as the further contention ol the learned counsel for therespondent Department that since the assessment order in theinstant case \\jas tl-rat of 2006_2007 , the order of the Tribunalalso being that of 2Z .06 -2014, the amended provision undersub-section 3 of Section 153 would not be applicable in the caseof the petiriorler. According to the rearned counser for therespondent- Department since prior to the amendment broughtunder sub-section 3 of Section 153, there was no time limitprescribed for passing of a consequential order pursuant to thedirection contained in the order of the Tribuna_l under Section254. Thle impugned orders in the instant case carnot be violativeof the provisions of the Act. L4. It rvas further contended that since sub section (2A), theterm "may" has been used, hence the said provision is onll'directory and not mandatory. According to the learned counselfor lhe respondent-Department since sub-section [(2A) ]of [Section]153 so also the amended provision under sub-section 3 [of]Section 153 do not provide any consequence [Llpon ][the failure in]not passing the consequential order in terms of [the order of ][the]Tribunal under Section 254, the time [limit ][prescribed ][under]sub-section (2A) of Section [153 ][so ][also sub-section ][3 ][of ][Section]I 53 are to be only considered to [be ][a ][sort ][of ][guidelines ][or ][a]directives without any [mandatory ][force ][of ][law. ][It ][was ][in ][this]context that the learned [counsel contended ][that ][the ][said]provisions have to be treated [only ][as a ][directory and ][not ][a]statutory command. 15. Learned counsel [for ][respondent-Department ][also]contended that the Tribunat [had ][remanded ][only ][few ][issues]raised before it to the [authority ][for ][fresh ][consideration,]therefore, it does not arnount [to ][total ][remand and ][thus, ][Section]153 (2A) of the Act has [no ][application ][to ][the ][present ][case' ][In]other words, the contention [of ][learned ][standing ][counsel ][is ][that]Section 153 [(2A) ]of the Act [is ][applicable only where, ][the ][matter] / is remanded in [ioto ]and [Se ][ctron ] [(2A) ][has ][no ][application ][in]case of partial [rt:;nand.] 15. Learned counsel [for ][respondent-Department ][also]contended that the Tribunat [had ][remanded ][only ][few ][issues]raised before it to the [authority ][for ][fresh ][consideration,]therefore, it does not arnount [to ][total ][remand and ][thus, ][Section]153 (2A) of the Act has [no ][application ][to ][the ][present ][case' ][In]other words, the contention [of ][learned ][standing ][counsel ][is ][that]Section 153 [(2A) ]of the Act [is ][applicable only where, ][the ][matter] / is remanded in [ioto ]and [Se ][ctron ] [(2A) ][has ][no ][application ][in]case of partial [rt:;nand.] 16, Having hearrl thc [contentions ][put ][forth ][on ][either ][side ][and]on perusal of records, [so ][far ][as the ][factual ][aspects ][a-re]concernecl, partrcularll . [in ][respect ][of ][the ][material ][dates ][of ][the]orders passed bl the [difierent authorities ][including that ][of ][the]Tribunal is no', in disprrte- It [is ][also ][not ][in ][dispute ][that ][the]revisionary order under Section 263 [was ][set ][aside ][by ][the]Tribunal and tirr: malter [stood ][remitted ][back ][to ][the ][concerned]Assessing Ofticcr for fresh adjudication. [The ][dispute ][arose ][on]the consequential order [passed ][by the ][Assessing ][Ofllcer after ][an]inordinatety delayed [period ]of [time. ][This ][delayed consequential]order passed bl the [Assessing ][Off-rcer ][is ][under ][challenge ][in ][the]present writ pctitions. L7. As has been stated at the [initial ][part ][of ][this ][order, ][the]question to be considered is [wor-r-ld ][the ][provision ][of ][sub-section](2A) of Section 153 be applicable upon [the ][Assessing Officer in]the course of the [reassessment ][being ][done ][pursuant ][to ][the]remand being made b1' the Tribunal. [The ][question ][also ][would ][be]whether the authoritl. concerned upon [a ]remand being [made ][by] '1:?.' the Tribunal have any time limit for completion of theassessment, reassessment or recomputation 18. Nou,in the light of the aforesaid [question ]that [needs ][to ][be]considered and answered by this Bench, [it ][is ][relevant ][to ][take]note of the entire contents of Section [153 ][and ][the sub-sections]envisaged therein. A plain [reading ][of ][the ][entire Section ][153 ][itself]rvould go to establish that the [said Section ][has ][been ][enacted by]the framers of law [so ]as [to ][prescribe ][time ][limit ][for ][completion ][of]assessment, [reassessment ][and ][recomputation' ][First, ][the ][sub-]Sections (t), [(1A), ][(lB) ][and ][2 ][of ][the ][Act ][start ][with ][a ][specilic]restnctive commancl [highlighting ][the fact that ][beyond ][a]of [time ][prescribed ][under the ][various ][sub-]particular period sections referred [to ][above, ][the ][Assessing ][Officer ][is ][denuded ][of]his powers to [pass ][an ][assessment ][order' ][The ][aforesaid]provisions of law [i.e. ][sub-Section ][(1), ][(1A), ][(18) ][and ][2 ][deal ][with]the assessment, [reassessment arld ][recomputation ][in ][exercise ][of]powers conferred [upon ][the ][Assessing ][Officer'] 19. The aforesaid [provisions ][did ][not ][envisage ][a situation ][where]thereisanorderofremandbytheAppellateTribunaloranAppellate [Authority' ][It ][is ][preciseiy ][for ][this ][reason ][that ][sub-]section [(2A) ][stood ][enacted ][in ][respect ][of a ][situation where ][there] is an order of remand rvith a direction to the Assessing Oflicer topass a fresh ,assessmen t order. Sub-section (2A) starts with anon-obstante clause holding rhat notrvithstanding anythingcontained in thc aJoresard pror,isions i.e. sub-Section (1), (1A),( 1B) and 2 in tt're cvcnt o[ an order ol fresh assessment orderedby the Appell:Lte Tribur.ral or the Appellate Authority after settingaside or cancelling the earlier assessment order, the authoritSrconcerncd is required to makc an assessment in terms of thedirection ol thc Appellare Tribunal or the Appeltate Authority asthe case may be rvithin a stipulated period. A plain reading ofthe aforesaid statutor\ pror.isions does not give any otherinterpretation other tharr that mentioned above. is an order of remand rvith a direction to the Assessing Oflicer topass a fresh ,assessmen t order. Sub-section (2A) starts with anon-obstante clause holding rhat notrvithstanding anythingcontained in thc aJoresard pror,isions i.e. sub-Section (1), (1A),( 1B) and 2 in tt're cvcnt o[ an order ol fresh assessment orderedby the Appell:Lte Tribur.ral or the Appellate Authority after settingaside or cancelling the earlier assessment order, the authoritSrconcerncd is required to makc an assessment in terms of thedirection ol thc Appellare Tribunal or the Appeltate Authority asthe case may be rvithin a stipulated period. A plain reading ofthe aforesaid statutor\ pror.isions does not give any otherinterpretation other tharr that mentioned above. 20. The very purposc of enacting sub-section (2A) goes to showthat it has been enacted to nleet with a situation where theoriginal assessment order has been set aside/cancelted by theAppellate Tribunal or the Appellate Authority under Section 250or under Section 254 or under Sectio n 263 or under Section264. As regards sub-section 3 of Section 153 as it stood prior tothe amendment carried out in the year 2016, the reading of thesaid provision of law w'ould also give a clear indication that thereshall be no time limit for completion of the assessment, E =:E?\ ' [['-qr.]] ' [['-qr.]] it reassessment and recomputation towards compliance of anydirection contained in an order under Section 250, 254, 260,262,263 or Section 264 subject to the provisions of sub-sectiondirection contained in an order under Section 250, 254, 260,262,263 or Section 264 subject to the provisions of sub-section(2A) and in a proceeding otherwise than by way of an appeal orreference under this Act. This in other words means that this isa provision which deals with a situation where the assessment,reassessment and recomputation is made, to give effect to afinding or a direction contained in an order under Sections [25O,]254,260, 262, 263 or Section 264 in an [appeal ][or ][reference.]reference under this Act. This in other words means that this isa provision which deals with a situation where the assessment,reassessment and recomputation is made, to give effect to afinding or a direction contained in an order under Sections [25O,]254,260, 262, 263 or Section 264 in an [appeal ][or ][reference.] 21. The aJoresaid conclusion arrived [at ][by ][this ][Bench ][further]stands strengthened lrom the amendment [that ][was ][brought to]the Act, particularly, so far [as ][sub-section ][3 of ][Section ][153 ][is]concerned with elfect from [1.04.2016 onwards. ][Vide ][the ][said]amendment, the legislature [has ][brought ][a ][time ][limit ][for]adjudication of a [proceeding ][under ][sub-section ][3 ][as ][well ][which]till the amendment was [made was ][not ][stipulated' ][If ][the ][analory]of the principle contention [of ][the ][learned ][counsel ][for ][the]respondent-Department [is ][to ][be ][accepted, then ][in ][that ][event, the]very purpose of sub-section [(2A) ][becomes ][redundalt ][The]contention of the [learnerl counsel ][for the ][respondent-]DepartmentalsowouldnotbeSustainableforthereasonthatif, that ri'ould hacl been the intention of the legislature, then at thetime of the amendment brought in to sub-section 3 of Section153, the iegislature vvor.rld also had deleted the provision of sub-section (2A), as it u,oulrl not be any further required in the lightof their contention and in the light of the subsequentamendment brought in to sub section 3 of Section 153 22. Now we shall rel'er to certain judicial precedents on thesaid subject from difl-erer-rt High Courrs. The High Court ofGujarat in the case of Instruments Control Co. (supra) inparagraph Nos. 16.3, 17, 19, 21,22 and 25 held as trnder: '16.3 Vre maq notice that sub section ().4) of section 153 tuasintroduced bg utag of amendmt:nt bA the Amendrnent Act, l97Owith effect from 1 .4.1971. Correspondingtg, the tuord.s [,,subject ]tothe prouislons of sub-section (2A)" u.tere also added in sub section(3) of sectiort 153. 22. Now we shall rel'er to certain judicial precedents on thesaid subject from difl-erer-rt High Courrs. The High Court ofGujarat in the case of Instruments Control Co. (supra) inparagraph Nos. 16.3, 17, 19, 21,22 and 25 held as trnder: '16.3 Vre maq notice that sub section ().4) of section 153 tuasintroduced bg utag of amendmt:nt bA the Amendrnent Act, l97Owith effect from 1 .4.1971. Correspondingtg, the tuord.s [,,subject ]tothe prouislons of sub-section (2A)" u.tere also added in sub section(3) of sectiort 153. 17. It can, thus, be seen LhaL prior to introduction of subsection(2A) of section 153, tlle Legislafitre prouided for timitation forcompletion o/ assessmenls under sub section (1) and sub-section(2) of section .l 53. Sub-sectio n (3) of section 153, hou.rcuer,prouided. that the prouisions of sub-sections (1) and (2) shoL notopplA to classes o/ assessmenls, reassessments and, re_computattons prouided in clauses (i) to (iii) of sublsection (3) ofsection 153. Such r:lasses inctuded a case of fresh assessmentmade under section 146; a case o;F assessmen,, reasses sment orre-computation in consequence of or to giue effect to ang fnd.ingor direction contained in an order under section 2SO, 254, 26d,262, 263 of 264, as also in case of a firm, uhere an assessmen,is made on o partner of the rtrm in consequence of an assessmentmade on the firm under section 147. 19. The situation, howeuer, must bee seen to haue und_ergone amaterial change upon introduction of sub-section (2A) of iection153 of the Act, tuhich prouides inter atia that notu;ithstandinganything contained in sub-secfioas (1) and (2), in retqtion to thbassessment year commencing on the lst doy of April, 1971, and i-.'t:'lr' anA subsequenl assessmenl Llear, an order of fresh assessJ'nentunder sectlon 146 or in pursuonce of an order, under section 25O,section 254, section 263 or section 264, setting aside orcancelling an assessment, maa be made at onA ttme before [the]expiry ol'tu)o Aears from the end of the financial [gear ][in ]whtchthe order under section 146 cttncelling the assessment [is ][passed]by the Assessing Officer or the order under section 250 [or ]section254 is receiued bq the Chie.l Commissioner or Commissioner, [as]the case may be. t\s alreadg noted, tuhile introducing [sub-sectton](2A) in section I53 of the Act, the Legislature simultaneouslymade a small chttnge in sub'section [(3) ][thereof ][bg ][adding ][the]u.tords, "subject to the prouislons of sub-section [(2A)".] 27. Sub-section [(2A) ]of seclron [153 ][of ][the ][Act, ][tlrcrefore, ][in ][our]uieut, tuould couer the [cases ][uthere ][the ][Assessing ][Officer ][is]required to pass a fresh order [of ][assessment ][when ][such ]freshasiessment is necessitatetl [on account ][of ][an ][order ][setting aside]or cancelLirtg the [assessment. ][In ][compaison, clause ][(ii) ][of ][sub]section [(3) ]if section [153 would ][apply uhere ]lher9 [i^s ][a ][need ][for]an assessment, reassessmenf [or ][re ][computcltlon uL ][consequence]of or to giue effect [to ]ang irtding [or direction contnined ][in ][an ][order]passed"rnaii section b50 etc. [Signiftcantlg, ][afi-er 1'4'1971, ][the]^prouisions of sub section (3) of section 1-53 of tlrc Act .are madesubject to tie [prouisions ][of ][section ][(2A) ][of ][section ][153 ][of ][the ][Act'] 22- tlnder the [ciralnTst()nces, ][the class ][o/ ][cases ][of ][fresh]cssessment to [be mad-e ][pursuant ][to ][order ][under ][section ][25O ][etc']uould fatt under sectioi [(2A) ][of ][section ][153 ][of ][the ][Act' ][and ][the]penna'of limitation [prescibed ][therein utould ][oryrate' ][In ][those]'r^"" -h"ra there is no need for a Iresh assessflLent and are notund.er section [(2A) ][of ][section 153 ][of ][tle ][Act' ][but ][are]"ou"red couered under [cLauses ][(i), ][(ii) ][ind ][(iii) ][of ][section 153, the ][limitation]ir.tiiaia [under ][sub-section ][pe1 ][o1 ][sie"tion ][153 ][uould ][not ][applg]and [re']'";;; th" expression "assessment, reqssessment , "o^p"t"tA" ti ilitin""" [ie ]the [completed ][piceeding' ][at ][ang ][o; ][time" ][mdg ][etable ][t,he ][reuerule]neiod orescibed [und'er ]^""""^tnt (1) and [(2) ]-?ue! of [section ][begond ][153 ][the-][o[]'r;"';"i ;;';;tZZi"- "'6''""ri"t" iot be [hindeied bs ][the ][prescription ][of]ii^tioiion section [(2A) ][of ][sectton ][1 ][53 ][of ][the ][Act']""a"r ';i';;;",;;;i'::t,!.,::;"X'":,:':#:,Hi.T;.Xi:l:;X25.Toourmind,thecaseonhandwoutdJatlundersubsectionthe "il-- ,iiitl"a' words [of ]the ["settng ]iatter [asfit ]back to the Assessa€Oytru, 1o,summoning [two ][tuitnessei'ogoi" ]pi"a" [1o' ][cros:-ex:m::::ion ]to the [Assessing officer'][bg ][the]assessee [and ][permitted ][piii' ]necessailtl [it ][must ][a" ]["'nir:itiloa ]- rit rna'no'l [to ][lwue ]otherttise ' [set ][aside ]in latu [the]'a-ssessmenl [under ][clalteig) ]aould not [haue ][remitted ][fii ][p'o"eedingt ][to ][the ][Asse. ][ssing Officer]I::7*:;;"i;'1y::::-!:;ii;i:";:X"::;f,:"ff:;',.::icarrying [out ][sucn ProDe ][I] that such comrnissions paid lo lhe ILL)o oqencrcs ()os the soLedispule beltueen the o-sse-s.see antl the D?partment. In the oiqinalassessmerlr, lhe Asse.s.sing Ofrtc:er disatssed onlu tit.s issue andrnode con'esponding disallowance. Itt essence, thus, theAssessing Offtcer uas requiretl fo p.rss a Jrt'sh order ofas.sessmenl uhich utos necessan.l on accouttt of an order passedbg the TibunaL under section 254 oJ' the Act canceLling theassessmenl framed by rhe As.sess inq Officer. The peiod oflimltcttion prescribed in section 153(2A), therefore, tuould notapply. While such an order u.us serued on the Cornnissioner on3.8.1994, utithin a peiod o_f tluo Aears of thl: end of suchJlnancial [geo,r, ][a ]fresh [order ][of ][as.ses-sntetlt l-Lad ]to be passed bgthe Assesslng Officer.I'he sa.ire not lnuing been done, in ouruiew, such proceedings hate become tinte-baned. Theassessment placed before the A..;.sessin.g Officer by the TribunaL'sorder, therefore, rnust be treated as houing abatec). In that uieu)of the matter, the declaration prayed for bq the p:litione:r must begranted. " 23. The High Court of Delhi also in the case of Nokia Ind.io. (P.) Ltd. (supra) dealing with the said provisions of law inparagraph Nos.22, 23,24 and 25 held as under:paragraph Nos.22, 23,24 and 25 held as under: "22. Ha.uing perused the impugned. order of the ILAT corefulty ond.the operatlue portions qua uhich the asslssmen t or(ier ,,as setaside and the matter remand_ed to the A(), the Couft is unable toagree utith the contention of leamed ASG that the aforementioned.order of the ITAT did not constitute a complete settiig asfae il iheas.sessrnen, with directions to the AO to pass a fresh order.' ThLCourt does not passed a remand.the AO u.tas fresh [,chained' ]agree taith the ,uAmisrion' assessmen, by the tTAT,s order airi"tiii'i"a de noro oJ iJ [-pur"ron, ]bo^"d could. ASG not to hauesuchthat (P.) Ltd. (supra) dealing with the said provisions of law inparagraph Nos.22, 23,24 and 25 held as under:paragraph Nos.22, 23,24 and 25 held as under: "22. Ha.uing perused the impugned. order of the ILAT corefulty ond.the operatlue portions qua uhich the asslssmen t or(ier ,,as setaside and the matter remand_ed to the A(), the Couft is unable toagree utith the contention of leamed ASG that the aforementioned.order of the ITAT did not constitute a complete settiig asfae il iheas.sessrnen, with directions to the AO to pass a fresh order.' ThLCourt does not passed a remand.the AO u.tas fresh [,chained' ]agree taith the ,uAmisrion' assessmen, by the tTAT,s order airi"tiii'i"a de noro oJ iJ [-pur"ron, ]bo^"d could. ASG not to hauesuchthat unless the 23. The Court entire is asstalso unobLe to agree uith the contentton thnt;i!:;'i;'#'iii":.,?;W:ji"t:i::"::Xrq:#llxi!{iiif objectbehind^tr"d;";:^*;:;'{::,,:X"fr;f onginal time limit assess for cnmpleting ment b(tie assessmeni- p|oJJ"aurg, ::?;";i:::r,ry:upon tlwctiarts,the;;;;;;;;',,:,X"::,",:'12:;":"il2#rf,l!:i,,Uyrr:::section (2A) onlg to wn.r.'- tti ',"rtire, existing assessment order of is section set.astde. "r.h l "osrs ss tt uas notecl that, ,,Under theoiginal.proubion-s 1s1,- t""n'|rJln"l.."r."-rnr. not subject to anA time limit." Ind'eed, Sec;io;- j';3, as it stood. ,."at a.Fi,Jr that time, did not prescibe any tirne lrrnrts. Seclion 153 (3) (ii), inparticular, did not require lhe order passed tl'Lereunder to beissued. ulthin anA pafticular tim<t Limit. Further there is adbtinction betuteen an 'a-ssessment' that is set aside and an'ossessmen[ ord.er' being set [qside. ]lUhen the assessment on cnissue is set aside and the nlatter rentanded, with a direction thatthe issue has to be determurcd ofresh, Section 153 (2A) of the Actuould get attracted. 24. What is imporlant to nole is that, along u.tith the insertion ofsub-section (2A), sub-section (3) urLclentent o simultaneouschange- It LUas expresslg made "subject to the proubions of s-ub-section (2A)." This meant thot Section 153 (3) would thereafi.erapplg ontg to such co-ses where Section 153 (2A) did not applg. Inother uords, in all instances of an AO hauing ,o pass o freshossessment order upon renutnd tuhere Section 153 (2A) u-touldapplg, the AO u.tould be bound to follout the time timit imposed [bg]sub-section (2A). Where the AO as only giuing effect to an appellateorder, then Section I53 (3) (ii) of the Act would applg. 25. In the present case, of the seuen issues, the assessmenf [in]respect oJ fiue was set aside and the issues remanded for a freshdetermtnation. Whether the remand was to the TPO or the DRPuLould not make a di,fferenc:e as long as what results from [the]remand is a fresh assessrnenl of the issue- Cleartg, therefore, thetime limtt for completLng tLtat exercise was gouemed bg Section [) ]53(2A) of the Act." 24. The High Court of Kerala also in the case of R.P.PATEL, (supra) in paragraph No.12 held as under: "12. The resultont [posttion therefore ]is [that, ][euen ][in ]a [case]uthere only one issue has been directed to be considered afresh,the limitatton under Section 153(2A) would apptg. It is [clear ]fromthe passage in [(2008) 3O0 tTR 173 (Delhi] (supra) extracted abouethat, sub section (3) of Section 153 applies to a different situationuhere only a consequential order has to be [passed ][in]implementation of a dtrection issued by the appellate forum- [In ][the]present cose, a-s alreadg Jound aboue the direction was to unsiderthe i.ssue afresh. Therefore, Section [153(2A) ]of [the ]Act [is attracted.]In uieu.t of the aboue, fhis is a [ca-se ]in uhich the Assessing [Offtcer]ought to haue passed o consequential order uithin the [ttme\limit]stipulated. Since no such order uas [passed ]the [petitiondf ][is]entitled to succeed. In uieu.t of the aboue ftndings the uit [petition is atloued. ][It]is held that in so Jar as the issue that utas remitted to the In uieu.t of the aboue ftndings the uit [petition is atloued. ][It]is held that in so Jar as the issue that utas remitted to the respctndenl As.sessing Officer for J'resh considero.tion. the ttmc barcontoinecl in. Section 153(2A) of the Acl op?retes."Recentl-v. the Madras High Court also in the case of Virtusa Consulting Serutces (P,) Ltd. u. Dispute Resolution Panel PRPf [dealt ][with ][similar ][circr-rmstances decided ][on 09 ][.06 ][.2022.] 25. In the light of above decision of Hon'bLe High Court ofKerala, (supra) the contention of learned standing counsel forrespondent-Department that Section 153 (2A) ol the Act has noapplication to the present case as the Tribunal had on11,' partia,ll1,remanded the matter, lacks merit and is untenable. 26. From piain reading of the judicial pronouncements andprecedents in the preceding paragraphs and the findings givenby this Court, we are of the considered opinion that theproceedings drawn, admittedly being beyond a period that isprescribed under sub-section (2A) of Section 153 and theconsequential orders passed are all beyond the period oflimitation prescribed under sub-section (2A) of Section 153.Hence, the same being not sustainable, deserves to be and isaccordingly set aside/ quashed. 'l2o22l 445 rrR 4s4 (Madras) :i \ 26. Accordingly, the Writ Pe titions are allou'ed. There shall be no order as to costs. As a sequel, miscellaneous petitions, [pending ]if any, shall stand . closed. SD/.C. PRAVEEN ASSISTA]EfrEGISTRARI ,TRUE COPY//SECTION OFFICER To, 1. The Secretary. Ministry of Finance' UnioIl of lndia' South Block' New Delhii ii'iE i.Jit-tili [Commidsionei ][ot ][inio'e ][ra'' ][circle- ][2(2). Hvd.erabad' ][Room]' N;:513 lil iroot, Signiirr" fo*"o' Kothaguda Kondapur' Hyderabad [-]500090[[Room]]i ii'iE i.Jit-tili [Commidsionei ][ot ][inio'e ][ra'' ][circle- ][2(2). Hvd.erabad' ][Room]' N;:513 lil iroot, Signiirr" fo*"o' Kothaguda Kondapur' Hyderabad [-]500090[[Room]] 500090i[i O"ort, Commissioner [of ][lncome ][Tax-2' ][Circle- ][2(2)' Hyderabad' ][[Room]]i[i O"ort, Commissioner [of ][lncome ][Tax-2' ][Circle- ][2(2)' Hyderabad' ][[Room]] 3 r.rllsr{ sTh ri"or, [Signature Towets, ][Kothaguda ]^. ^.ir"""td 6"Sii o [tiaie"ndra Chettv ][Advocate ][[oPUC]] 4. 6nE cd i; ili..k [M;rrta ][Advoc'ate ][toPUC]] 5. b.Two CD CoPies MBCGJP(V._- HIGH COURT DATED: 0911012023 rt{E kczd 21Nott [2r?3]ottDEspAlC COMMON ORDER WP NO: 853 AND 8528 OF 2019 ALLOWING THE WRIT PETITIONS WITHOUT COSTSi\A[lr]\tb[t\.--2]