Delhi High Court has held in the case of Systra Sa Project Office Vs Dispute Resolution Panel that action of the DRP in providing only 3 days time to file a long list of documents and later on refusing to take them on record is against principles of natural justice. Assessee in this case was a foreign company and documents were lying in Paris. Full Text of the High Court Order is as follows :-
O R D E R
CM APPL. 29523/2017 (Exemption) in W.P.(C) 7114/2017
CM APPL. 29529/2017 (Exemption) in W.P.(C) 7118/2017
1. Allowed, subject to all just exceptions.
W.P.(C) 7114/2017 & CM APPL. 29522/2017 (STAY)
W.P.(C) 7118/2017 & CM APPL. 29528/2017 (STAY)
2. Notice. Mr. Puneet Rai, learned counsel for Respondent accepts notice.
3. The question raised by the Petitioner in these writ petitions filed under Articles 226 and 227 of the Constitution of India concerns the validity of the orders dated 24th July 2017 passed by the Dispute Resolution Panel -2 (DRP), the Respondent herein.
4. The background facts are that Petitioner is based in France. In regard to the returns filed by it for AYs 2013-14 and 2014-15, draft assessment orders were passed by the Assessing Officer (AO) on 27th October 2016 under Section 144C of the Income Tax Act 1961. Being aggrieved by the draft assessment orders, the Petitioner filed objections before the DRP. A remand report was called for from the AO which was received on 6th July 2017.
5. It is stated that at the hearing before the DRP on 20th July 2017 it suo motu required the Petitioner to submit a fairly long list of documents/information on or before 24th July 2017. Since there was a weekend falling between the two dates and the Petitioner had to get many of the documents sought from Paris, the Petitioner asked for some more time to submit the documents. This was declined by the DRP stating that it had to pass orders by 31st July, 2017.
6. The Petitioner states that on 24th July 2017 it tendered some of the documents in the office of the DRP but they were refused to be received. The Petitioner then despatched the said documents by courier to the DRP on 24th July 2017 itself with a covering letter where it requested for more time to submit the remaining documents and prayed that the documents tendered may be considered by the DRP. Another set was despatched on 25th July 2017 to the DRP by speed post.
7. The Petitioner was surprised to learn subsequently that on 24th July 2017 itself the DRP had passed the impugned orders without taking note of the documents despatched to it by courier.
8. Clearly, the Respondent acted in violation of the principles of natural justice, since despite the time being granted to the Petitioner till 24th July 2017 to submit documents sought by the DRP, the DRP passed the order on 24th July, 2017 itself and that too without taking on record the documents produced by the Petitioner till then. The time given for the Petitioner to do so was just four days. This was clearly unreasonable, particularly, since there was an intervening weekend between 20th and 24th July, 2017.
9. For the above reasons, the Court sets aside the impugned orders dated 24th July, 2017 passed by the DRP for AYs 2013-14 and 2014-15. The matters are remanded to the DRP to be taken up from the stage at which they were when the impugned orders were passed. The documents submitted by the Petitioner that are already with the DRP and any further documents that the Petitioner may submit not later than 31st August, 2017 will be considered by the DRP and fresh orders passed within a period of two weeks thereafter.
10. These writ petitions are disposed of in the above terms.