2022 (3) TMI 441 - HC - Income Tax

Court quashes improper tax assessment, highlights procedural importance.

Hactom Agro Pvt Ltd. Versus National E Assessment Centre & ors

Hactom Agro Pvt Ltd. Versus National E Assessment Centre & ors - TMI Issues Involved:Impugning an assessment order passed under Section 143(3) of the Income Tax Act 1961 despite a pending reference before the Dispute Resolution Panel (DRP).Analysis:The petitioner challenged an assessment order dated 4th May 2021 passed under Section 143(3) of the Income Tax Act 1961, claiming that the order was issued despite a reference pending before the DRP. The petitioner argued that the draft assessment order was received on 31st March 2021, the reference to DRP was lodged on 28th April 2021 within the thirty-day period, and the respondent was informed about the reference on 29th April 2021. Despite this, the respondents proceeded to pass the impugned order on 4th May 2021. The petitioner filed the petition on 29th January 2022 after the DRP passed an order on 29th December 2021.The court held that since the order dated 4th May 2021 was passed despite the petitioner's reference to the DRP, it needed to be quashed and set aside. The respondents were directed to pass a fresh assessment order, taking into consideration the observations of the DRP in its order dated 29th December 2021. Consequently, the petition was disposed of, and the interim application was deemed to no longer be applicable and was disposed of accordingly.This judgment highlights the importance of adherence to procedural requirements and the significance of respecting ongoing dispute resolution processes. It underscores the need for authorities to consider and respect references made to dispute resolution panels before finalizing assessment orders to ensure fairness and due process in tax matters.