Court sets aside final assessment order & DRP directive, orders reconsideration per law, grants hearing. Writ petition allowed.

The Court set aside the Ext. P3 final assessment order and the Ext. P8 order issued by the DRP, directing a reconsideration of the petitioner's objections in accordance with the law and after providing a hearing. The writ petition was allowed, with no costs awarded.

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Issues:
Challenge to Ext. P3 assessment order under Section 143(3) of the Income Tax Act, 1961 and Ext. P8 order passed by the Dispute Resolution Panel (DRP) under Section 144C(5) rejecting objections to the Draft Assessment Order.

Analysis:
1. The petitioner contested the Ext. P3 assessment order and Ext. P8 order issued by the DRP. The petitioner argued that Ext. P3 was passed in violation of Section 144C and principles of natural justice.

2. The petitioner had initially filed Ext. P4 objections to the Draft Assessment Order (DAO) within the extended time provided by Ext. P2 Circular issued by the Central Board of Direct Taxes (CBDT) due to the Covid-19 pandemic. The CBDT circular extended the time for filing objections before the DRP until 31.05.2021.

3. Despite the petitioner filing objections within the extended time frame, the 1st respondent passed Ext. P3 assessment order before the expiry of the extended deadline. The petitioner argued that the assessment was completed prematurely, contrary to the provisions of Section 144C and the CBDT circular.

4. The Court noted that the CBDT circular, being issued under Section 119 of the Act, is binding on the Income Tax Authorities. The petitioner's objections filed within the extended time frame were deemed valid, and the premature completion of assessment by the 1st respondent was considered a violation of natural justice.

5. The Court referred to Section 144C(1) to (3) of the Act, which mandates that an assessment order under Section 143(3) shall only be passed after the assessee is given an opportunity to file objections to the Draft Assessment Order. The premature passing of Ext. P3 without considering the objections filed by the petitioner was deemed unjust and against the provisions of the Act and the CBDT circular.

6. Consequently, the Court set aside the Ext. P3 final assessment order and the Ext. P8 order issued by the DRP. The DRP was directed to reconsider the petitioner's objections afresh in accordance with the law and after providing an opportunity for a hearing.

Conclusion:
The Court allowed the writ petition, setting aside both Ext. P3 assessment order and Ext. P8 order. No costs were awarded in the matter.

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