Wockhardt Limited Vs DCIT (ITAT Mumbai)
In Wockhardt Limited Vs DCIT, the Income Tax Appellate Tribunal, Mumbai Bench, considered cross appeals filed by the assessee and the revenue against an order of the Commissioner of Income Tax (Appeals) dated 9 February 2015. The dispute arose from an assessment completed under Section 143(3) read with Section 147 of the Income Tax Act, 1961 for Assessment Year (AY) 2009–10.
During the hearing, the assessee sought admission of an additional ground of appeal contending that the Assessing Officer had passed the final assessment order beyond the time limit prescribed under Section 153 of the Act, rendering the order liable to be quashed. As the issue raised was purely legal, the Tribunal admitted the additional ground.
The assessee argued that Section 144C of the Act, inserted by the Finance (No. 2) Act, 2009, required the Assessing Officer to forward a draft assessment order to an eligible assessee where a variation prejudicial to the assessee was proposed on or after 1 October 2009. The assessee relied on explanatory notes contained in CBDT Circular No. 5/2010 dated 3 June 2010 stating that the provisions were applicable from AY 2010–11 onwards. Reference was also made to Circular No. 9/2013 acknowledging an error in the earlier explanatory note. The assessee further relied on the judgment of the Madras High Court in Vedanta Ltd. v. ACIT, which held that amendments coming into force after the first day of April of a financial year would not apply to assessments for that year, even if finalized later. On that basis, the assessee contended that Section 144C did not apply to AY 2009–10 and that the assessment order should have been passed by 31 March 2013. Since the order was passed later, the assessee argued that it was time-barred.
