High Court quashes assessment order for non-compliance with CBDT circular, directs assessment after DRP directions The High Court set aside the assessment order dated 30th July, 2021, finding that it was passed in disregard of the CBDT circular and without waiting for ...
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High Court quashes assessment order for non-compliance with CBDT circular, directs assessment after DRP directions
The High Court set aside the assessment order dated 30th July, 2021, finding that it was passed in disregard of the CBDT circular and without waiting for directions from the DRP within the statutory timeline. The court directed the Assessing Officer to proceed with the assessment proceedings after obtaining directions from the DRP as required by law. This decision provided relief to the petitioner and ensured compliance with statutory provisions and CBDT circulars.
Issues: Challenge to assessment order under Income Tax Act for AY 2017-2018 on grounds of arbitrariness and illegality.
Analysis: The petitioner challenged the assessment order dated 30th July, 2021 under Section 143(3) read with Section 144C(3), 144B of the Income Tax Act for Assessment Year 2017-2018, alleging arbitrariness and wrongful exercise of jurisdiction. The petitioner received a Draft Assessment Order under Section 144C against which objections were filed before the Dispute Resolution Panel (DRP) within the stipulated time. However, the petitioner claimed that due to a circular by the Central Board of Direct Tax (CBDT) extending the deadline for filing objections, the assessment order should not have been passed without allowing the extended period. The petitioner argued that the Assessing Officer should have awaited directions from the DRP, as mandated by law and the CBDT circular. The petitioner relied on judgments of the Hon’ble Delhi High Court to support their contentions.
The respondent, through their advocate, failed to defend the actions of passing the assessment order disregarding the CBDT circular and without waiting for directions from the DRP within the statutory timeline. In light of the submissions, the High Court disposed of the writ petition by setting aside the impugned assessment order dated 30th July, 2021, along with any subsequent actions based on it. The court directed the Assessing Officer to proceed with the relevant assessment proceedings after obtaining directions from the DRP as per the law. The writ petition was thus disposed of, providing relief to the petitioner and ensuring compliance with the statutory provisions and circulars issued by the CBDT.
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