Bridge India Fund, New Delhi v. ACIT

Case snapshot

Sections / provisions: 144C; Form 35A; Rule 5 of DRP Rules; 140(c)

Questions before the Court / Tribunal

• DRP objections in Form 35A: defective verification by authorised representative and opportunity to cure before rejection.
• What factual, statutory and procedural conditions control the relief?
• How does the operative order apply to the parties and the challenged proceeding?

Material facts and procedural background

Assessee by : Shri S. Krishnan, AR Revenue by : Shri Soumendu Kumar Das, DR

01. These are the two appeals filed by BRIDGE INDIA FUND, New Delhi (The Assessee/Appellant) for assessment year 2014 – 15 and 2015 – 16 against the assessment orders passed by the learned assessing officer, involving common grounds of appeal, both the parties argued them identically; therefore both these appeals are disposed of by this common order.

02. ITA number 457/M/2023 is filed by the assessee for assessment year 2014 – 15 against the assessment order passed by The Assistant Commissioner Of Income Tax, International Taxation Circle, 1 (3) (2), Mumbai dated 23/1/2023 under section 147 read with section 144 of The Income Tax Act (The Act) determining total income of the assessee at ₹ 168,572,010/– against the return of income filed on 29/9/2014 at a total income of ₹ 68 lakhs.

03. The assessee has raised several grounds of appeal as under.

permits issuance of notice to an ELIGIBLE Assessee, specifying date and place of hearing of Objections.

Appellant / assessee submissions

013. The learned authorized representative submitted that

to the various notices advocate on behalf of the assessee appeared for the online hearing from the Cisco WebEx platform and the case was discussed with him. The learned assessing officer was also given the copy of the notice of hearing but none appeared on behalf of him and neither any written request were filed. Thereafter the learned dispute resolution panel mentioned that all the objections raised by the assessee were considered and in the end the learned dispute resolution panel give a discussion and direction with respect to ground number 1 – 16 holding that the objections to the draft order in form number 35A is neither signed by the assessee and nor its agent as prescribed under Rule 4 of The Income Tax (Dispute Resolution Panel) Rules, 2009. Accordingly, LD DRP held that as the draft objections are signed by the advocate of the assessee, who is not empowered to sign the return of income either in its own capacity or as an agent, the objections filed by the assessee are not maintainable. It further held that the lapse of the assessee is not a minor procedural mistake and the authorized representative cannot be considered as an agent of the assessee. The authorized…

notice to the eligible assessee and the concerned assessing officer specifying the date and place of hearing of the objections. He submitted that such notices have been issued to the assessee therefore it means that the objections stands admitted and are to be adjudicated on the merit.

(f) Even otherwise submitted that the provisions of principles of the natural justice should also show that the assessee should have been put to a notice that the objections filed by the assessee are not maintainable for some reasons.

Revenue / respondent submissions

015. The learned departmental representative submitted that

Court / Tribunal analysis and reasoning

019. However, despite holding that the learned authorized representative could not have verified form number 35A, we find that DRP Rules provide that as soon as the objections are filed, notice of hearing to the eligible assessee specifying the date and place of hearing of the objection shall be issued. The learned dispute resolution panel in this case has already issued a notice to the ‘eligible assessee’. Subsequently the hearing of objections also took place. This is in terms of rule 5 – 7 of the DRP rules. Subsequently according to rule 9, the learned dispute resolution panel further called for the written submissions of the assessee which were also filed. The personal hearing was also granted to the assessee. Therefore at every stage assessee was given an impression that its objection is being considered on merit. We note that the objections were filed by the assessee on 29/4/2022. The learned dispute resolution

Operative decision and relief

022. Accordingly ground number B of the appeal of the assessee is allowed. All other grounds are left unadjudicated.

026. Accordingly appeal of the assessee for assessment year 2015 – 16 is allowed for statistical purposes.

027. In the result, both the appeals filed by the assessee are allowed on ground number B of those appeals for statistical purposes.

028. In view of our decision in both the above appeals connected stay application number 49 and 50/M/2023 filed by the assessee becomes infructuous and hence dismissed.

Ratio and legal principle

• Form 35A must be verified by the person legally competent to verify the objections; an advocate/authorised representative cannot perform that statutory verification merely by virtue of representation authority.
• A curable verification defect should not ordinarily be used to extinguish the statutory DRP remedy without first informing the taxpayer and allowing a reasonable opportunity to correct the defect.

Why this judgment matters

This decision is relevant to practitioners and affected parties dealing with drp objections in form 35a: defective verification by authorised representative and opportunity to cure before rejection. Its value lies in showing how the adjudicating forum connected the applicable rule to the proved facts and procedural posture.

Practitioner action points

• Match the statutory version, jurisdiction, procedural stage and decisive evidence before relying on the result.
• Verify current appellate, review and SLP history and any later amendment or controlling authority.
• Attach the complete judgment to the working paper or filing and cite the paragraph/page supporting the proposition.

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Section / provision impact

• 144C - apply the exact version considered in the judgment.
• Form 35A - apply the exact version considered in the judgment.
• Rule 5 of DRP Rules - apply the exact version considered in the judgment.
• 140(c) - apply the exact version considered in the judgment.

Case network

Similar issue / useful comparison

• SECUNDRABAD CLUB VS. C.I.T.-V - Supreme Court of India
• PCIT v. Indravadan Jain, HUF - Court / Tribunal to be verified
• ACIT v. Ashok W. Wesavkar - Court / Tribunal to be verified

Different outcome / possible distinction

• ACIT CIR 6(1) VS ASAHI INFRA & PROJECTS LIMITED - Remanded / restored
• ITO 32(2)(3) VS MAYUR R KAMDAR - Dismissed

Full judgment and source control

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