Facts of the Case

The assessee, Tableau International Unlimited Company, filed an appeal before the Income Tax Appellate Tribunal against the assessment order dated 19.07.2022 passed by the Assessing Officer for Assessment Year 2019-20. The assessment order was passed under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961 pursuant to the directions issued by the Dispute Resolution Panel (DRP) under Section 144C(5).

The assessee challenged various additions and adjustments made in the assessment proceedings, including issues arising from the draft assessment order and the directions issued by the DRP. The assessee also sought to raise additional grounds relating to the validity of jurisdiction, contending that such grounds go to the root of the assessment proceedings. 

Issues Involved

  1. Whether the additional grounds raised by the assessee challenging the validity of jurisdiction can be admitted at the appellate stage.
  2. Whether the assessment order passed under Section 143(3) read with Section 144C(13) pursuant to DRP directions is legally sustainable.
  3. Whether the additions and adjustments made by the Assessing Officer pursuant to DRP directions were justified in law. 

Petitioner’s Arguments (Assessee)

  • The assessee contended that the additional grounds challenging jurisdiction go to the root of the assessment proceedings and therefore should be admitted by the Tribunal even if not raised earlier.
  • It was argued that the assessment order passed pursuant to DRP directions suffers from legal infirmities and jurisdictional defects.
  • The assessee submitted that the issues raised are purely legal in nature, do not require further investigation of facts, and therefore can be considered by the Tribunal at the appellate stage. 

Respondent’s Arguments (Revenue / Department)

  • The Revenue opposed the admission of additional grounds raised by the assessee.
  • It was argued that the assessment proceedings were conducted in accordance with the provisions of the Income Tax Act, 1961 and the directions issued by the Dispute Resolution Panel.
  • The Department maintained that the assessment order passed under Sections 143(3) and 144C(13) was valid and legally sustainable. 

Court / Tribunal Findings

The Income Tax Appellate Tribunal examined the submissions of both parties and considered whether the additional grounds raised by the assessee could be admitted.

The Tribunal observed that legal grounds relating to jurisdiction, which go to the root of the matter, can be raised at any stage of appellate proceedings if they do not require fresh investigation of facts.

Accordingly, the Tribunal considered the admissibility of the additional grounds and examined the validity of the assessment proceedings passed pursuant to the directions of the DRP. 

Court Order

The Tribunal held that additional legal grounds challenging jurisdiction can be admitted when they go to the root of the matter and do not require further investigation of facts.

The appeal was accordingly considered on the basis of the issues raised, including the additional grounds relating to jurisdiction and the validity of the assessment order passed under the provisions of the Income Tax Act.

 Important Clarification

The Tribunal reiterated the principle that pure questions of law, particularly those relating to jurisdiction, can be raised at any stage of appellate proceedings before the Tribunal if the necessary facts are already on record.

This principle ensures that the legality of assessment proceedings can be examined even if the issue was not raised earlier before lower authorities. 

Sections Involved

  • Section 143(3) – Scrutiny Assessment
  • Section 144C(5) – Directions by Dispute Resolution Panel
  • Section 144C(13) – Final Assessment Order pursuant to DRP directions

Link to download the order - https://itat.gov.in/public/files/upload/1703835808-ITA%201875%20of%202022%20Tableau%20International%20Unlimited%20Co.pdf

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