Petitioner can refer draft assessment to DRP for international transactions. Penalty orders not enforced during DRP appeal.

The Court held that the petitioner could validly refer the draft assessment order to the Dispute Resolution Panel (DRP) under Section 144C for international transactions with its Associated Enterprise. Penalty orders under Sections 271G, 271AA, and 271BA were issued but not to be enforced during the DRP reference if the assessee appealed within two weeks. The judgment stressed the importance of timely assessment order framing, separate appeals for penalties, and compliance with legal procedures for international transactions, ensuring a fair process before the DRP.

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Issues: Validity of draft assessment order under Section 144C, Maintainability of objections, Eligibility for reference to Dispute Resolution Panel (DRP), Penalty orders under Section 92D and related sections, Enforcement of penalty orders during pendency of reference.

In this case, the petitioner challenged a draft assessment order dated 10.03.2014 issued by the Assessing Officer under Section 144C based on Transfer Pricing Officer (TPO) recommendations. Initially, the petitioner contended that no objections could be made regarding this order. The respondents clarified that the Assessee was eligible for reference to the DRP under Section 144C due to international transactions with its Associated Enterprise. The Court held that a valid reference could be made to the DRP in respect of the draft assessment order. Additionally, penalty orders for alleged violations of Section 92D leading to penalties under Sections 271G, 271AA, and 271BA of the Act were also passed (annexure P-2, 3, and 4). The Court directed that the petitioner could approach the DRP within two weeks, and the AO should frame the assessment order within the prescribed time. The penalty orders were to be separately appealed, and the Revenue was directed not to enforce them during the DRP reference, provided the assessee approached the appellate authority within two weeks. The Court emphasized that the question of limitation would not arise in such appeals.

The judgment highlighted the importance of the Assessee's eligibility for reference to the DRP under Section 144C, the necessity of timely framing the assessment order by the AO, and the separate appeal process for penalty orders. It also addressed the enforcement of penalty orders during the pendency of the DRP reference, emphasizing the need for the assessee to approach the appellate authority promptly. The Court's decision aimed at ensuring a fair and unhindered consideration of the petitioner's case before the DRP and emphasized compliance with legal procedures and timelines in assessing penalties related to international transactions.

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