IN HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS 27TH DAY OF SEPTEMBER, 2019 BEFORE HON BLE MR.JUSTICE P.B. BAJANTHRI WRIT PETITION NO.11618 OF 2016 (T-IT) BETWEEN: DEVAS MULTIMEDIA PRIVATE LIMITED UNIT 502, PRESTIGE MERIDIAN-1 NO.209, M.G.ROAD, BANGALORE-560 001 REPRESENTED BY ITS COMPANY SECRETARY MR.VINOD SUNDER K. PETITIONER (BY SRI.UDAYA HOLLA, SR. COUNSEL, FOR SRI.NANDISHA PATEL, ADV.) AND: PRINCIPAL COMMISSIONER OF INCOME-TAX BANGALORE-560 002 5TH FLOOR, BMTC BUILDING 80 FEET ROAD, 6TH BLOCK KORAMANGALA BANGALORE-560095. RESPONDENT (BY SRI.K.V.ARAVIND AND SRI.DILIP M. ADVOCATES) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF CONSTITUTION OF INDIA PRAYING TO DECLARE THAT IMPUGNED PROCEEDINGS INITIATED BY RESPONDENT UNDER SECTION 263 OF ACT ARE OPPOSED TO SAID PROVISIONS AND THEREFORE WITHOUT JURISDICTION AND ETC. THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED ON 04.09.2019 AND COMING ON FOR PRONOUNCEMENT OF ORDER THIS DAY, COURT MADE FOLLOWING: 2 ORDER In instant petition, petitioner has sought for following reliefs: (i) declaring that impugned proceedings initiated by Respondent under Section 263 of Act are opposed to said provisions and therefore without jurisdiction. (ii) Quashing impugned Notice No.AACCD2059H/PCIT-2/2015-16 dated 08.02.2016 (Annexure A) issued by respondent. (iii) Pass such other or further order as this Hon ble Court may deem fit in facts and circumstances of case, in interests of justice and equity. 2. Petitioner is stated to have engaged in business of providing internet based multimedia and interactive data services to hand-held mobile terminals through portfolio of services including streaming of video, audio and data as well as web access, infotainment and social applications. It is stated that it was unique project which is multifarious requiring high skilled manpower with superior R & D efforts were put in, large infrastructure, high vendor development 3 efforts and funding. It was stated that there was no enterprise in India which could provide for such services as were required by petitioner. In this backdrop, petitioner is income tax assessee who had filed returns of income on 23.09.2009 for assessment year 2009-10 declaring loss of Rs.21,72,53,709/-. Petitioner s return was selected for purpose of scrutiny and consequently, notice was issued under Section 143(2) of Income Tax Act, 1961 (for short Act 1961 ) further, followed by another notice under Section 142(4) of Act. In process of assessment, reference was made to Transfer Presiding Officer (TPO) under Section 92CA of Act. Certain information were sought from petitioner in order to meet assessment process. Petitioner is stated to have completed requisite material sought by authorities. Thereafter, several inquiries were made by Assessing Officer (AO) as well as TPO. AO proceeded to pass Draft Assessment Order under Section 144C for which petitioner had certain objections and matter was forwarded to Dispute Resolution Panel (for short DRP ). 4 3. DRP consists of 3 Officers who are in cadre of Commissioner, who have examined Draft assessment order and objections of petitioner under Sub-clause of Section 144 against Draft Assessment Order and DRP issued certain directions on 31.12.2003. Consequently, AO passed Final Assessment Order on 31.01.2014. 4. On 08.02.2016, Principal Commissioner of Income Tax, Bengaluru while invoking Section 263 of Act, 1961 issued notice in respect of Assessment Order for year 2009-10 pursuant to return filed by petitioner on 23.09.2009 declaring loss of Rs.21,72,53,709/- read with conclusion of assessment under Section 143(3) read with Section 144C on 31.01.2014 while determining taxable income of asssessee at Rs.17,98,34,440/- which resulted in net tax liability at Rs.3,71,45,516/-. addition/disallowance made to arrive at taxable income. respondent after assessing various issues relating to investment made by Deutsche Telekom Asia Pvt. Ltd., Telekom Centre Singapore and M.G.Chandrasekhar who have invested USD 75000000 (INR 3232500000.00), INR 30000 and 2839 Class C Equity Shares and 3000 Class E 5 Equity Shares respectively and in terms of investors amount of inflow read with number of shares and face value of share was Rs.10/- and same were issued at premium of Rs.1,14,015/- during relevant year read with previous year, shares have been issued at premium of Rs.21,445.82/-, Rs.25,504.56 and Rs.1,14,015.19/- in March 2006, June 2007 and March 2008 respectively. Further, there was cancellation of agreement between assessee and M/s Antrix Corporation. In such scenario, status of company itself was at stake, huge investments in form of securities premium without valuation appeared to be without reasonable basis. As such it had definite tax implication. credit in bank accounts through banking channel was not sufficient to explain criteria of Sec.68 and no additional information had been provided by assessee. sharp rise in share valuation had possibility of gains accruing to beneficiaries which led to tax demands and with questionable going concern status of assessee, issue had tax implications. Thus, respondent intended to revise order of AO and issued notice under Section 263 of Act 1961. 6 5. Petitioner feeling aggrieved and dissatisfied of notice dated 08.02.2016 issued under Section 263 of Act 1961 for assessment order for year 2009-10 (Annexure A), presented this petition. 6. Shri Udaya Holla, learned Senior Counsel for petitioner vehemently contended that Principal Commissioner of Income Tax has no jurisdiction to invoke Section 263 of Act 1961 in issuing notice to petitioner on 08.02.2016 in respect of Assessment Order for year 2009-10 which has attained finality by AO in passing Final Assessment Order on 31.01.2014. Undisputedly, AO notified Draft Assessment Order while invoking Section 144C on 15.03.2013 for which petitioner had grievance under provisions of Section 144C(1)(b) read with Section 92CA relates to TPO (international transactions). Accordingly, petitioner is stated to have filed objections for Draft Assessment Order dated 15.03.2013. Consequently, matter was referred to DRP and proceeded to pass order on 31.12.2003. In terms of DRP decision dated 31.12.2003, AO proceeded to pass Final Assessment Order on 31.01.2014. DRP consists of three Commissioner s 7 (Panel), in such circumstances, respondent being Principal Commissioner cannot sit over decision of DRP consisting of three Commissioners. Therefore, respondent Principal Commissioner has no jurisdiction. On this score itself, impugned notice issued by respondent in invoking Section 263 of Act 1961 is liable to be set-aside. 7. Learned Senior Counsel further submitted that while invoking Section 263 of Act 1961 by respondent in issuing notice to petitioner, two ingredients like erroneous decision of AO and it is prejudicial to interest of revenue are not appraised. Perusal of notice, it is evident that aforesaid ingredients are not forthcoming in notice. Further, DRP decision has not been addressed. Therefore, even on ground of non-compliance of ingredients stated in Section 263 of Act 1961, impugned notice dated 08.02.2016 is liable to be set-aside. 8. Learned Senior Counsel for petitioner relied on R.SRINIVASAN vs ASST./DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE I COIMBATORE decided by High Court of Judicature at Madras in Tax 8 Case (Appeal)No.354 of 2006 disposed of on 11.09.2012, para.20 which is relevant reads as under: 20. Given fact that revisional jurisdiction of Commissioner under Sections 263 or 264 of Act enables Commissioner to call for and examine record of any proceedings under Act and 'record' is defined under Section 263 Explanation (b) to "include and shall be deemed to always to have included all records relating to any proceedings under this Act" available at time of examination by Commissioner and approval under Section 158BG also being part of record in passing of order under Section 158BC, we agree with assessee's contention that self-same rank Officer cannot once again review order passed under Section 158 BC made with approval of Commissioner of Income Tax. Further, apparently, faced with situation of nature as one prevailing herein, Section 158 BG, after amendment in 1997 substitutes approval by Commissioner to approval by Joint Commissioner in respect of search done after 1.1.97, and that appeal remedy to Commissioner of Income Tax (Appeal) thereon is provided under Act as against original appeal remedy before Income Tax Appellate Tribunal, we hold that going by scheme of Act. Thus, once approval is given by Commissioner in respect of proceedings made before 1.1.1997, "approval" being expression indicating application of mind on part of higher authority viz., Commissioner, to materials seized leading to block assessment and approving authority not 9 being lower in rank than that of revisional Appellate Authority himself and hence appeal remedy thereupon before Tribunal alone is provided thereon, we do not find any justifiable ground to accept plea of Revenue that approval on order passed under Section 158BC would be mere administrative nod and hence, assessment is amenable to be proceeded under Section 263 of Act. As pointed out by Karnataka High Court in decision reported in [2012] 204 TAXMAN 158 C.I.T. v. SMT.ANNAPOORNAMMA CHANDRASHEKAR, act of approval is not for mere passing of order under Section 158BC, but approval which takes note of subject matter of assessment and there is application of mind before granting approval. Apex Court in decision reported in AIR 2006 SC 2879 ASHOK KUMAR SAHU v. UNION OF INDIA held that expression 'approve' means to have or express favourable opinion of to accept as satisfactory as to content of assessment made under Section 158BC. Karnataka High Court pointed out difference between approval and permission by referring P.Ramanatha Aiyar's Law Lexicon and held that when approval is given it means approving authority has full knowledge about contents of what is approved and confirmed authoritatively order of lower authority. 9. Further, he relied on Brief Note submitted during course of arguments on Section 263 of Act 1961 (Para.6 to 9 and 13 to 16) which reads as under: 10 6. Section 144C was inserted in Act by Finance Act, 2009 and came into effect from 1st October, 2009. In Notes on Clauses to Finance Bill, 2009, reason for insertion of Section 144C was as under: subjects of transfer pricing audit and taxation of foreign company are at nascent stage in India. Often Assessing Officers and Transfer Pricing Officers tend to take conservative view. correction of such view take very long time with existing appellate structure. With view to provide speedy disposal, it is proposed to amend Income-tax Act so as to create alternative dispute resolution mechanism within income-tax department and accordingly, section 144C has been proposed to be inserted so as to provide inter alia Dispute Resolution Panel as alternative dispute resolution mechanism. 7. It is with this intention i.e. with view to provide speedy disposal, it is proposed to amend Income-tax Act so as to create alternative dispute resolution mechanism within income-tax department . , DRP was introduced to shorten length of tax disputes in international transactions involving computation of Arm s Length Price. Further, since DRP constitutes collegium comprising of three Commissioners of Income- tax, directions given are binding on Assessing Officer which is evident from Section 144C (10) of Act. Therefore, by providing alternative, intention of Legislature was to reduce lengthy litigations and put end to disputes. In present case, 11 Respondent by issuing Impugned Notice has done exact opposite. 8. Further, Hon ble Bombay High Court in Vodafone India Services Pvt. Ltd. vs Union of India and Others (2013) SCC Online Bom 1534 held as under: proceeding before DRP is not appeal proceeding but correcting mechanism in nature of second look at proposed assessment order by high functionaries of revenue keeping in mind interest of assessee. It is continuation of Assessment proceedings till such time final order of assessment which is appelable is passed by Assessing Officer. This also finds support from Section 144C (6) which enables DRP to collect evidence or cause any enquiry to be made before giving directions to Assessing Officer under Section 144C (5). DRP procedure can only be initiated by assessee objecting to draft assessment order. This would enable correction in proposed order (draft assessment order) before final assessment order is passed. Therefore, we are of view that in present facts this issue could be agitated before and rectified by DRP. 9. It is submitted that issue to taxability of shares being issued at premium has already been well settled. Revenue had raised similar issue regarding discrepancy in valuation of share premium received in case of Vodafone India Services (P) Ltd vs UOI (2014) 368 ITR 1 (Bom). transfer 12 pricing adjustment was made to valuation of shares, holding that valuation of shares adopted by assessee is incorrect. Hon ble Bombay High Court in no uncertain terms laid down law stating as under:- 25. But we have examined issue afresh. word income for purpose of Act has well understood meaning as defined in Section 2(24) of Act. This even when definition in Section 2(24) of Act is inclusive definition. It cannot be disputed that income will not in its normal meaning include capital receipts unless it is so specified, as in Section 2(24) (vi) of Act. In such case, Capital Gains chargeable to tax under Section 45 of Act are, denied to be income. amounts received on issue of share capital including premium is undoubtedly on capital account. Share premium have been made taxable by legal fiction under Section 56(2)(viib) of Act and same is enumerated as Income in Section 2(24)(xvi) pf Act. However, what is bought into ambit of income is premium received from resident in excess of fair market value of shares. In this case what is being sought to be taxed is capital not received from non-resident i.e, premium allegedly not 13 received on application of ALP. Therefore, absent express legislation, no amount received, accrued or arising on capital account transaction can be subjected to tax as Income . 13. Prior to year 2016, appeal was provided from order/directions of DRP to Appellate Tribunal as per Section 253(2A) of Act. Bearing in mind decision of Hon ble Supreme Court referred to above, Parliament in its wisdom deleted Section 253(2A) of Act, thereby giving finality to order/directions of DRP. 14. By not allowing appeals against directions of DRP and giving finality to order/directions of DRP, Legislature implicitly conceded to fact that, in matters of determining tax liability relating to international transactions, DRP is independent mechanism within framework of Income Tax Department separate from Revenue. Also, 2016 amendment which omitted appeal to ITAT provision (253(2A)) cities reason being minimization of litigation to be reason for omission. 15. Further, law on proposition that what cannot be done directly cannot be done indirectly is well settled. As explained hereinabove, separate ADR mechanism was created for resolving disputes relating to Transfer Pricing in International Transactions. Further vide 2016 amendment, right to appeal was specifically taken away in order to minimize these disputes. 16. Once DRP has exercised its power under Section 144C of Act, Commissioner loses his jurisdiction to 14 exercise power under Section 263 of Act. Consequently, Commissioner cannot issue show cause notice under Section 263 exercising his revisionary powers, especially when legislature has specifically (a) created separate mechanism of DRP; and (b) has barred any statutory appeal against order. Therefore, by virtue of issuing notice under Section 263, Respondent is attempting to assume jurisdiction, when it has done and is trying to have re-look at final DRP order, when jurisdiction to do so is barred under Act. (Reliance in this regard is placed on unreported judgment passed by Division of Madras High Court in Appeal No.354/2006 para 20). 10. On other hand, learned counsel for Respondent Sri K V Aravind vehemently contended that contention of petitioner that respondent has no jurisdiction to invoke Section 263 of Act 1961 in respect of Assessment Order which was pursuant to DRP decision and further, its acceptance by AO is without any legal substance. Even though, contention of petitioner that DRP consists of three Commissioners and their decision has been taken note off by AO while passing Final Assessment Order, still there is no statutory provision barring jurisdiction of Respondent/Principal Commissioner to invoke Section 263 of Act 1961 to revise 15 Assessment order of Assessing Officer. On other hand, Clause (c) to Explanation (1) of Section 263 of Act 1961 there is bar in respect of following issue: 263(1)(c): Where any order referred to in this sub-section and passed by Assessing Officer had been subject matter of any appeal (filed on or before or after 1st day of June, 1988), powers of (Principal Commissioner or) Commissioner under this sub-section shall extend (and shall be deemed always to have extended) to such matters as had not been considered and decided in such appeal) . Thus, Section 263 of Act 1961 provides for revision of order, if it is erroneous and prejudicial to revenue, which earmarks that Principal Commissioner is empowered to Section 263 of Act 1961 in order to rectify Assessment Order made by AO. Further, respondent counsel pointed out by reading of Explanation 2(a to d), it is crystal clear that there is no prohibition to Principal Commissioner to invoke Section 263 of Act 1961 even in assessment matter where DRP has examined Draft Assessment Order along with assessee objections. 11. Learned counsel for Respondent submitted that any short coming relates to twin ingredients of Section 16 263 of Act 1961 which cannot be agitated in present petition. Petitioner has remedy before respondent by submitting his explanation. If his explanation is satisfactory, respondent may drop further proceedings or else, if he is not satisfied, in such event he shall proceed in accordance with provisions of Section 263 of Act 1961 while providing ample opportunity to petitioner. 12. cited decision on behalf of petitioner has no application to present case for reasons that there is no bar in respect of invoking Section 263 of Act 1961 by Principal Commissioner even in event of examination of Draft Assessment Order by DRP. respondent is prohibited in invoking Section 263 of Act 1961 only under one circumstance which is stated in Sub-clause (c) of Explanation (1) to Section 263 of Act 1961 cited supra. Thus, petitioner has not made out case in respect of issue relation to, Jurisdiction of respondent in invoking Section 263 of Act 1961 . Consequently, if there is any shortcoming in impugned notice, petitioner has other remedy of furnishing explanation and appraising 17 respondent. Thus, writ petition is not maintainable and it is to be rejected at threshold. 13. Heard learned counsel for parties. 14. questions for consideration in present petition is: (1) Whether respondent could invoke Section 263 of Act 1961 in respect of assessment order of AO pursuant to DRP decision or not? (2) Impugned notice dated 08.02.2016 is in terms of Section 263 of Act 1961 or not? 15. Petitioner who is assessee had filed return of income on 23.09.2009 for assessment year 2009-10. In view of fact that International Money Transaction was involved in petitioner s business, AO is required to initially proceed with draft assessment order and communicate same to petitioner/assessee for either acceptance or filing of objection. Petitioner had filed objections. Consequently, 18 objections were examined by DRP consisted of three panel members who were in cadre of Commissioner. On receipt of DRP s decision, AO proceeded to pass Final Assessment Order. In this backdrop, question is, Whether Respondent Principal Commissioner could invoke Section 263 of Act 1961 to examine Assessment Order of AO or not ? 16. Learned counsel for petitioner submitted that if Draft Assessment Order was scrutinized by DRP and followed by Final Assessment Order by AO, in such circumstances, respondent Principal Commissioner has no jurisdiction for reasons that DRP consists of three Commissioners and such decision cannot be examined by sole Principal Commissioner respondent. hierarchy is required to be taken note of. Respondent Principal Commissioner is equivalent to one of Commissioner of DRP where as three such Commissioners have taken decision on Draft Assessment Order of AO. Consequently, it is not appropriate for respondent/Principal Commissioner 19 alone to examine decision of DRP. At best, it could be examined by Tribunal. 17. Before examining contentions of petitioner, it is appropriate to take note of few provisions of Act, 1961. 92A. (1) For purposes of this section and sections 92, 92B, 92C, 92D, 92E and 92F, associated enterprise , in relation to another enterprise, means enterprise- (a) Which participates, directly or indirectly, or through one or more intermediaries, in management or control or capital of other enterprise; or (b) in respect of which one or more persons who participate, directly or indirectly, or through one or more intermediaries, in its management or control or capital, are same persons who participate, directly or indirectly, or through one or more intermediaries, in management or control or capital of other enterprise. 92CA. (1) Where any person, being assessee, has entered into international transaction (or specified domestic transaction) in any previous year, and Assessing Officer considers it necessary or expedient so to do, he may, with previous approval of (Principal 20 Commissioner or) Commissioner, refer computation of arm s length price in relation to said international transaction (or specified domestic transaction) under section 92C to Transfer Pricing Officer. (2) Where reference is made under sub-section (1), Transfer Pricing Officer shall serve notice on assessee requiring him to produce or cause to be produced on date to be specified therein, any evidence on which assessee may rely in support of computation made by him of arm s length price in relation to international transaction (or specified domestic transaction) referred to in sub-section (1). ((2A) Where any other international transaction (other than international transaction referred under sub-section (1), comes to notice of Transfer Pricing Officer during course of proceedings before him, provisions of this Chapter shall apply as if such other international transaction is international transaction referred to him under sub-section (1)). (2B) Where in respect of international transaction, assessee has not furnished report under section 92E, and such transaction comes to notice of Transfer Pricing Officer during course of proceeding before him, provisions of this Chapter shall apply as if such transaction is international transaction referred to him under sub- section (1). (2C) Nothing contained in sub-section (2B) shall empower Assessing Officer either to assess or reassess under section 21 147 or pass order enhancing assessment or reducing refund already made or otherwise increasing liability of assessee under section 154, for any assessment year, proceedings for which have been completed before 1st day of July, 2012. 3. On date specified in notice under sub-section (2), or as soon thereafter as may be, after hearing such evidence as assessee may produce including any information or documents referred to in sub- section (3) of Section 92D and after considering such evidence as Transfer Pricing Officer may require on any specified points and after taking into account all relevant materials which he has gathered, Transfer Pricing Officer shall, by order in writing, determine arm s length price in relation to international transaction (or specified domestic transaction) in accordance with sub-section (3) of Section 92C and send copy of his order to Assessing Officer and to assessee. ((3A) Where reference was made under sub-section (1) before 1st day of June, 2007 but order under sub-section (3) has not been made by Transfer Pricing Officer before said date, or reference under sub-section (1) is made on or after 1st day of June, 2007, order under sub- section (3) may be made at any time before sixty days prior to date on which period of limitation referred to in section 153, or as case may be, in section 153B for making order of assessment or reassessment or recomputation or fresh assessment, as case may be, expires:) 22 (Provided that in circumstances referred to in clause (ii) or clause (x) of Explanation 1 to section 153, if period of limitation available to Transfer Pricing Officer for making order is less than sixty days, such remaining period shall be deemed to have been extended accordingly.) (4. On receipt of order under sub-section (3), Assessing Officer shall proceed to compute total income of assessee under sub-section (4) of section 92C in conformity with arm s length price as so determined by Transfer Pricing Officer.) 5. With view to rectifying any mistake apparent from record, Transfer Pricing Officer may amend any order passed by him under sub-section (3), and provisions of section 154, shall so far as may be, apply accordingly. 6. Where any amendment is made by Transfer Pricing Officer under sub-section (5), he shall send copy of his order to Assessing Officer who shall thereafter proceed to amend order of assessment in conformity with such order of Transfer Pricing Officer. 7. Transfer Pricing Officer may, for purposes of determining arm s length price under this section, exercise all or any of powers specified in clauses (a) to (d) of sub-section (1) of section 131 or sub-section (6) of section 133 (or Section 133A). Explanation:- For purposes of this section, Transfer Pricing Officer means Joint Commissioner or Deputy 23 Commissioner or Assistant Commissioner authorized by Board to perform all or any of functions of Assessing Officer specified in sections 92C and 92D in respect of any person or class of persons. 144C. (1) xxxxx (2) xxxxx (b) file his objections, if any, to such variation with,- (i) Dispute Resolution Pane; and (ii) Assessing Officer. 263. (1) (Principal Commissioner or) Commissioner may call for and examine record of any proceeding under this Act, and if he considers that any order passed therein by (Assessing) Officer is erroneous in so far as it is prejudicial to interests of revenue, he may, after giving assessee opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as circumstances of case justify, including order enhancing or modifying assessment, or canceling assessment and directing fresh assessment. (Explanation)- For removal of doubts, it is hereby declared that, for purposes of this sub-section.- (a) order passed (on or before or after 1 day of June, 1988) by Assessing st Officer shall include- (i) order of assessment made by Assistant Commissioner (or Deputy Commissioner) or Income-tax Officer on basis of directions issued by (Joint) Commissioner under section 144A. (ii) order made by (Joint) Commissioner in exercise of powers or in 24 performance of functions of Assessing Officer conferred on, or assigned to, him under orders or directions issued by Board or by (Principal Chief Commissioner or) Director General or (Principal Commissioner or) Commissioner authorized by Board in this behalf under section 120. (b) record (shall include and shall be deemed always to have included) all records relating to any proceeding under this Act available at time of examination by (Principal Commissioner or) Commissioner. (c) where any order referred to in this sub- section and passed by Assessing Officer had been subject matter of any appeal (filed on or before or after 1st day of June, 1988), powers of (Principal Commissioner or) Commissioner under this sub-section shall extend (and shall be deemed always to have extended) to such matters as had not been considered and decided in such appeal. (Explanation 2.- For purposes of this section, it is hereby declared that order passed by Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to interests of revenue, if, in opinion of Principal Commissioner or Commissioner- (a) order is passed without making inquiries or verification which should have been made (b) order is passed allowing any relief without inquiring into claim; (c) order has not been made in accordance with any order, direction or 25 instruction issued by Board under section 119; or (d) order has not been passed in accordance by jurisdiction High Court or Supreme Court in case of assessee or any other person. (2) No order shall be made under sub- section (1) after expiry of two years from end of Financial year in which order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2) order in revision under this action may be passed at any time in case of order which has been passed in consequence of or to give effect to, any finding or direction contained in order of Appellate Tribunal, (National Tax Tribunal), High Court or Supreme Court. Explanation In computing period of limitation for purposes of sub-section (2), time taken in giving opportunity to assessee to be reheard under proviso to section 129 and any period during which any proceeding under this section is stayed by order or injunction of any court shall be excluded. 18. It is undisputed that Draft Assessment Order was notified by AO in view of fact that assessee s business involved International Money Transaction. Petitioner/assessee was entitled to have opportunity to look into Draft Assessment Order. He 26 had option either to accept or to submit objections on variations. If objections were filed, in such event, AO is required to forward Draft Assessment Order and objections raised by petitioner assessee before DRP to examine objections raised by assessee. DRP drew proceedings and forwarded to AO. Consequently, AO passed Final Assessment Order. In this background, where assessment order has attained finality and respondent/Principal Commissioner is not permitted to invoke Section 263 of Act 1961 or not, sub-clause (c) of Explanation 1 of Section 263 of Act 1961 stipulates that there is prohibition in respect of particular circumstance, where respondent/Principal Commissioner shall not invoke Section 263 of Act 1961 whereas similar Clause is not forth coming in respect of matter examined by DRP against Draft Assessment Order of AO along with objections of Assessee. Therefore, contention of petitioner that respondent does not have power to invoke Section 263 of Act insofar as examination of Final Assesment Order along with 27 Assessee s objection pursuant to DRP decision, is untenable. No-doubt DRP panel consists of three Commissioners and Principal Commissioner examining or sitting over decision of DRP may not be appropriate. At same time, one cannot lose sight off, of statutory provision like Section 263 of Act 1961, unless and until Section 263 of Act 1961 prohibits to examine Final Assessment order, pursuant to DRP decision. One cannot go beyond statutory provision and so also read or add words by Courts while interpreting statutory provision. Time and again, Supreme Court and other Courts have held that in matter of interpretation of statutory provisions, Court cannot add any words or sentence . Even if there is any ambiguity, at best Court can read down or struck down such statutory provision. In present case, reading of Section 263 of Act 1961, it is crystal clear that there is no bar for Principal Commissioner to invoke Section 263 of Act 1961 to examine Final Assessment Order passed by AO pursuant to DRP decision. 28 19. Supreme Court in following decision examined jurisdiction of officer with reference to relevant provisions in case of GUJARAT URJA VIKAS NIGAM LTD. Vs ESSAR POWER LTD. reported in (2008)4 SCC 755 and has held at paras. 35, 39 and 61 as under: 35: It is well settled that where statute provides for thing to be done in particular manner, then it has to be done in that manner, and in no other manner [vide Chandra Kishore Jha v.Mahavir Prasad [(1999) 8 SCC 266 : AIR 1999 SC 3558] (SCC para 17 : AIR para 12),Dhanajaya Reddy v. State of Karnataka [(2001) 4 SCC 9 : 2001 SCC (Cri) 652 : AIR 2001 SC 1512] (SCC para 23 : AIR para 22), etc.]. Section 86(1)(f) provides special manner of making references to arbitrator in disputes between licensee and generating company. Hence by implication all other methods are barred. 39. It may be mentioned that Mimansa rules of interpretation were our traditional principles of interpretation laid down by Jaimini, whose sutras were explained by Shabar, Kumarila Bhatta, Prabhakar, etc. These Mimansa principles were regularly used by our great jurists like Vijnaneshwara (author of Mitakshara), Jimutvahana (author of Dayabhaga), Nanda Pandit, etc. whenever they found any conflict between various smritis or any 29 ambiguity, incongruity, or casus omissus therein. There is no reason why we cannot use these principles on appropriate occasions. However, it is matter of deep regret that these principles have rarely been used in our law courts. It is nowhere mentioned in our Constitution or any other law that only Maxwell's principles of interpretation can be used by court. We can use any system of interpretation which helps us to resolve difficulty. In certain situations Maxwell's principles would be more appropriate, while in other situations Mimansa principles may be more suitable. 61. We make it clear that it is only with regard to authority which can adjudicate or arbitrate disputes that Electricity Act, 2003 will prevail over Section 11 of Arbitration and Conciliation Act, 1996. However, as regards procedure to be followed by State Commission (or arbitrator nominated by it) and other matters related to arbitration (other than appointment of arbitrator) Arbitration and Conciliation Act, 1996 will apply (except if there is conflicting provision in Act of 2003). In other words, Section 86(1)(f) is only restricted to authority which is to adjudicate or arbitrate between licensees and generating companies. Procedural and other matters relating to such proceedings will of course be governed by Arbitration and Conciliation Act, 1996, unless there is conflicting provision in Act of 2003. 30 20. Supreme Court in case of ASSISTANT COMMERCIAL TAXES OFFICER VS. MAKKAD PLASTIC AGENCIES reported in (2011) 4 SCC 750, para 15, it is held as under:- 15. In CIT v. Ralson Industries Ltd. [(2007) 2 SCC 326] similar situation arose for interpretation of this Court regarding scope and ambit of Section 154 of Income Tax Act, 1961 vesting power of rectification as against power vested under Section 263 of Income Tax Act, which is power of revision. While examining scope of power of rectification under Section 154 as against power of revision vested under Section 263 of Income Tax Act, it was held by this Court as follows at SCC para 8: (SCC p. 330) 8. scope and ambit of proceeding for rectification of order under Section 154 and proceeding for revision under Section 263 are distinct and different. Order of rectification can be passed in certain contingencies. It does not confer power of review. If order of assessment is rectified by assessing officer in terms of Section 154 of Act, same itself may be subject-matter of proceeding under Section 263 of Act. power of revision under Section 263 is exercised by higher authority. It is special provision. revisional jurisdiction is vested in Commissioner. order thereunder can be passed if it is found that order of assessment is prejudicial to Revenue. In such proceeding, he may not only pass 31 appropriate order in exercise of said jurisdiction but in order to enable him to do it, he may make such inquiry as he deems necessary in this behalf. In para 12 of said judgment it was also held that when different jurisdictions are conferred upon different authorities, to be exercised on different conditions, both may not be held to be overlapping with each other. While examining scope and limitations of jurisdiction under Section 154 of Income Tax Act, it was held that such power of rectification could only be exercised when there is error apparent on face of record and that it does not confer any power of review. It was further held that order of assessment may or may not be rectified and if order of rectification is passed by assessing authority, rectified order shall be given effect to. 21. Scope of Section 263 examined in case of COMMISSIONER OF INCOME TAX, SHIMLA VS. GREENWORLD CORPORATION, PARWANOO reported in (2009) 7 SCC 69, Paras 20, 28, 41 and 52 reads as under:- 20. Income Tax Officer while passing order of assessment performs judicial function. appeal lies against his order before appellate authority. revision application would also lie before Commissioner of Income Tax. It is trite that 32 jurisdiction exercised by revisional authority pertains to its appellate jurisdiction. (See Shankar Ramchandra Abhyankar v. Krishnaji Dattatreya Bapat [(1969) 2 SCC 74 : AIR 1970 SC 1] .) 28. Before, however, adverting to jurisdictional issue raised by assessee herein, we may consider jurisdiction of Commissioner of Income Tax to issue notice in terms of Section 263 of Act. It provides for revisional power. It has its own limitations. order can be interfered with suo motu by said authority not only when order passed by assessing officer is erroneous but also when it is prejudicial to interests of Revenue. Both conditions precedent for exercising jurisdiction under Section 263 of Act are conjunctive and not disjunctive. order of assessment passed by Income Tax Officer, therefore, should not be interfered with only because another view is possible. 41. scope of provisions of Section 263 of Act is no longer res integra. power to exercise suo motu revision in terms of Section 263(1) is in nature of supervisory jurisdiction and same can be exercised only if circumstances specified therein viz. (1) order is erroneous; (2) by virtue of order being erroneous prejudice has been caused to interest of Revenue, exist. 52. In Rajinder Nath [(1979) 4 SCC 282 : (1979) 120 ITR 14] , this Court held: (SCC pp. 286-87, para 11) 11. expressions finding and direction are limited in meaning. finding given in appeal, revision or reference arising out of assessment must be 33 finding necessary for disposal of particular case, that is to say, in respect of particular assessee and in relation to particular assessment year. To be necessary finding, it must be directly involved in disposal of case. It is possible in certain cases that in order to render finding in respect of, (A) finding in respect of B may be called for. For instance, where facts show that income can belong either to or B and to no one else, finding that it belongs to B or does not belong to B would be determinative of issue whether it can be taxed as A's income. finding respecting B is intimately involved as step in process of reaching ultimate finding respecting A. If, however, finding as to A's liability can be directly arrived at without necessitating finding in respect of B, then finding made in respect of B is incidental finding only. It is not finding necessary for disposal of case pertaining to A. same principles seem to apply when question is whether income under enquiry is taxable in assessment year under consideration or any other assessment year. As regards expression direction in Section 153(3)(ii) of Act, it is now well settled that it must be express direction necessary for disposal of case before authority or court. It must also be direction which authority or court is empowered to give while deciding case before it. expressions finding and direction in Section 153(3)(ii) of Act must be accordingly confined. Section 153(3)(ii) is not provision enlarging jurisdiction of authority or court. It is provision which merely raises bar of limitation for making assessment order under Section 143 or Section 144 or Section 34 147. (ITO v. Murlidhar Bhagwan Das [AIR 1965 SC 342 : (1964) 52 ITR 335] and N. Kt. Sivalingam Chettiar v.CIT [(1967) 66 ITR 586 (SC)] ) question formulated by Tribunal raises point whether Appellate Assistant Commissioner could convert provisions of Section 147(1) into those of Section 153(3)(ii) of Act. In view of Section 153(3)(ii) dealing with limitation merely, it is not easy to appreciate relevance or validity of point. It is, thus, evident that jurisdiction to issue directions is limited. 22. Supreme Court in case of DHANANJAYA REDDY vs STATE OF KARNATAKA reported in (2001)4 SCC 9, in para no.23 held as under:- 23. It is settled principle of law that where power is given to do certain thing in certain manner, thing must be done in that way or not at all. This Court in State of U.P. v. Singhara Singh, AIR 1964 SC 358 (AIR p. 361, para 8) held:- Magistrate, therefore, cannot in course of investigation record confession except in manner laid down in Section 164. power to record confession had obviously been given so that confession might be proved by record of 35 it made in manner laid down . 23. Supreme Court in case of Director General, ESI and another vs. T. Abdul Razak reported in (1996) 4 SCC 708 in para no. 14 held as under:- 14. law is well settled that in accordance with maxim delegatus non potest delegare, statutory power must be exercised only by body or officer in whom it has been confided, unless sub-delegation of power is authorised by express words or necessary implication. 24. Supreme Court in case of Sidhartha Sarawgi Vs. Board of Trustees for Port of Kolkata and others reported in (2014) 16 SCC 248, in para nos 4, 9 and 10 held as under:- 4. There is subtle distinction between delegation of legislative powers and delegation of non-legislative/administrative powers. As far as delegation of power to legislate is concerned, law is well settled: said power cannot be sub-delegated. legislature cannot delegate essential legislative functions which consist in determination or choosing of legislative policy and formally enacting that policy into binding rule of conduct. Subordinate legislation which is generally in realm of rules and regulations dealing with procedure on implementation of plenary legislation is generally task entrusted to 36 specified authority. Since legislature need not spend its time for working out details on implementation of law, it has thought it fit to entrust said task to agency. That agency cannot entrust such task to its subordinates; it would be breach of confidence reposed on delegate. 9. Constitution confers power and imposes duty on legislature to make laws and said functions cannot be delegated by legislature to executive. legislature is constitutionally required to keep in its own hands essential legislative functions which consist of determination of legislative policy and its formulation as binding rule of conduct. After performance of essential legislative function by legislature and laying guiding policy, legislature may delegate to executive or administrative authority, any ancillary or subordinate powers that are necessary for giving effect to policy and purposes of enactment. In construing scope and extent of delegated power, difference between essential and non-essential functions of delegate should also be borne in mind. While there cannot be sub-delegation of any essential functions, in order to achieve intended object of delegation, non-essential functions can be sub-delegated to be performed under authority and supervision of delegate. 10. Sometimes, in plenary legislation itself, lawmakers may provide for such sub-delegation. That is what we see under Sections 21 and 34 of Major Port Trusts 37 Act, 1963, which we shall be discussing in more detail at later part of this judgment. 25. Supreme Court in case of Captain Sube Singh and Others vs. Lt. Governor of Delhi and others, reported in (2004) 6 SCC, 440 in para no. 29 held as under:- 29. In Anjum M.H. Ghaswala [CIT v. Anjum M.H. Ghaswala, (2002) 1 SCC 633] Constitution Bench of this Court reaffirmed general rule that when statute vests certain power in authority to be exercised in particular manner then said authority has to exercise it only in manner provided in statute itself. (See also in this connection Dhanajaya Reddy v. State of Karnataka [(2001) 4 SCC 9 : 2001 SCC (Cri) 652] .) statute in question requires authority to act in accordance with rules for variation of conditions attached to permit. In our view, it is not permissible to State Government to purport to alter these conditions by issuing notification under Section 67(1)(d) read with sub-clause (i) thereof. In view of aforesaid decisions at 22 to 25 respondent alone is entitled to revive Assessment Order under Section 263 of Act 1961. cited decisions and contents of brief note on behalf of petitioner do not assist in matter 38 and are distinguishable in view of language employed in Section 263 of Act 1961. 26. In view of Section 263 of Act 1961 read with aforesaid principles laid down by Apex Court in various decisions, cited decision on behalf of petitioner would not aid or support contention of petitioner that Principal Commissioner/respondent has no jurisdiction to invoke Section 263 of Act 1961, is not appreciable. Consequently, contention of petitioner that Principal Commissioner has no jurisdiction to invoke Section 263 of Act 1961 is hereby rejected. 27. other contention is that impugned notice dated 08.02.2016 do not contain ingredients and notice is liable to be set-aside. Petitioner has remedy before Principal Commissioner if there is any shortcoming in respect of ingredients stated in Section 263 of Act 1961. Writ Court cannot examine validity of notice on merit. Petitioner has remedy 39 before very same authority by submitting explanation to notice. Writ Court can interfere in respect of notice only, if, there is any violation of statutory provision. Supreme Court in case of HARBANSLALSAHNIA AND ANOTHER Vs INDIAN OIL CORPORATION LIMITED AND OTHERS reported in AIR 2003 SC 2120, relevant Para.7 reads as under: 7. So far as view taken by High Court that remedy by way of recourse to arbitration clause was available to appellants and therefore writ petition filed by appellants was liable to be dismissed is concerned, suffice it to observe that rule of exclusion of writ jurisdiction by availability of alternative remedy is rule of discretion and not one of compulsion. In appropriate case, in spite of availability of alternative remedy, High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where writ petition seeks enforcement of any of fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where orders or proceedings are wholly without jurisdiction or vires of Act is challenged. (See Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1] .) present case attracts applicability of first two contingencies. Moreover, as noted, petitioners' dealership, which is their bread and butter, came to be terminated for irrelevant and non-existent cause. In such circumstances, we feel that appellants should have been allowed relief by High 40 Court itself instead of driving them to need of initiating arbitration proceedings. 28. In view of principle laid down by Supreme Court (supra), petitioner has not apprised this Court that he need not exhaust remedy of submitting explanation/reply to notice dated 08.02.2016. 29. power conferred on High Court under Article 226 of Constitution of India is to advance justice and not to thwart it. very purpose of such Constitutional powers being conferred on High Court is that no man should be subjected to injustice by violating law. This Court does not sit as appellate authority over decision of authorities below. Further, while exercising extra-ordinary jurisdiction by High Court under Article 226 of Constitution of India, it should examine whether impugned action is per se illegal or vitiated by errors apparent on face of record. 41 30. In view of above narrated facts and circumstances read with legal issues, petitioner has not made out case so as to interfere with impugned notice dated 08.02.2016. Resultantly: I. Writ Petition stands rejected reserving liberty to petitioner to approach respondent in filing explanation/reply within period of four weeks from date of receipt of this order. II. Rule is made absolute in preceding terms. III. Leaving parties to bear their respective costs. Sd/- JUDGE brn Devas Multimedia Private Limited v. Principal Commissioner of Income-tax, Bangalore