Court upholds final assessment order in writ petition challenge, grants liberty to appeal.

The court dismissed the writ petition challenging the final assessment order, emphasizing that the procedures under Section 144C were initially followed and the specific remand by the ITAT did not require starting the procedure anew. The court held that the petitioner failed to establish grounds for setting aside the final assessment order and granted the petitioner the liberty to appeal before the Commissioner of Income Tax (Appeals).

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Issues Involved:
1. Validity of the final assessment order without issuing a draft assessment order post-remand.
2. Compliance with Section 144C of the Income Tax Act.
3. Availability of statutory remedy through appeal.

Issue-wise Detailed Analysis:

1. Validity of the final assessment order without issuing a draft assessment order post-remand:
The petitioner challenged the final assessment order dated 01.11.2018, arguing that the respondent failed to issue a draft assessment order as mandated by Section 144C(1) of the Income Tax Act. The petitioner contended that the absence of a draft assessment order deprived them of the opportunity to file objections before the Disputes Resolution Panel, violating the procedural requirements and thereby rendering the final assessment order invalid.

2. Compliance with Section 144C of the Income Tax Act:
The petitioner argued that the procedures under Section 144C were not followed after the remand by the Income Tax Appellate Tribunal (ITAT). The ITAT had remitted the matter back to the Transfer Pricing Officer to examine the selection of the most appropriate method for determining the Arm's Length Price and to verify if the Associated Enterprises derived any benefit or markup. The petitioner cited various judgments, including Principal Commissioner of Income Tax-4 Vs. Headstrong Services India (P) Ltd., and GE Oil & Gas India Private Limited Vs. Assistant Commissioner of Income Tax, to support their claim that the issuance of a draft order is mandatory and that the failure to do so violated the legal principles and provisions of the Act.

3. Availability of statutory remedy through appeal:
The respondent countered that the petitioner had an available statutory remedy of appeal under Section 246A before the Commissioner of Income Tax (Appeals). The respondent argued that the draft assessment order was initially passed on 31.03.2016, followed by the final assessment order on 25.12.2016, after the petitioner filed objections before the Disputes Resolution Panel. The ITAT's remand was specific to determining the appropriate method (CUP or TNMM) and did not necessitate starting the procedure from the beginning.

Analysis and Judgment:
The court analyzed the spirit and procedural requirements of Section 144C of the Income Tax Act. It noted that the provision mandates the issuance of a draft assessment order to provide the assessee an opportunity to file objections. However, the court observed that in the present case, the procedures under Section 144C were followed initially, with the draft assessment order issued on 31.03.2016, objections filed by the petitioner, and the final assessment order passed on 25.12.2016.

The court held that the ITAT's remand was specific to a particular issue regarding the selection of the most appropriate method for determining the Arm's Length Price and did not require the entire procedure under Section 144C to be repeated. The court emphasized that repeatedly passing draft assessment orders is not the legislative intent and would lead to unnecessary prolongation and protraction of proceedings.

The court concluded that the petitioner had not made out an acceptable ground for setting aside the final assessment order. It held that the petitioner has the liberty to prefer an appeal before the Commissioner of Income Tax (Appeals) if aggrieved by the assessment order.

Conclusion:
The writ petition was dismissed, with the court granting the petitioner the liberty to file an appeal before the Commissioner of Income Tax (Appeals). The court emphasized that the procedures under Section 144C were initially followed, and the specific remand by the ITAT did not necessitate starting the procedure from the beginning.

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