Interplay between sub-sections (5) and (8) of section 144C of Income tax Act 1961
The power of DRP under sub-section (5) is described in wide terms empowering it to issue such directions as it deems fit, while sub-section (8) deals with confirming, reducing or enhancing variations to the income.
Recently, Hon’ble ITAT in the case of Qubix held that DRP cannot deal with any issues other than those involving variations to the income proposed in draft order. Hon’ble ITAT followed Hon’ble Karnataka HC decision in the case of GE India and Mumbai ITAT in the case of Dredging International.
These cases give rise to the following questions:
1. Which of the two subsections be given primacy over the other and why ?
1A. whether the purpose of subsection (8) is predominantly to disable a remand and the first limb of the subsection merely sets the context?
1B. Can we apply the principle that Parliament should not be presumed to have given something by one hand viz. subsection (5) and taken away by another viz. subsection (8)?
2. Is section 144C just an alternative procedure to CIT(A) and the substantive rights of the taxpayer should fundamentally remain the same in these two proceedings?
3. Is it correct that DRP is a continuation of assessment proceedings and additional grounds can be raised before DRP as per Rule 7(4) of DRP Rules? [ maintaining distinction between additional grounds and additional arguments – NTPC (SC) and Scindia Steam (SC) ]
4. Whether the decision of Hon’ble SC in the case of Goetze followed in Shriram Investments will be a bottleneck while raising additional issues before DRP ?