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of <h1>Court Voids Tax Assessment Order for 2020-21; Stresses Adherence to DRP Directions in Future Assessments.</h1> <h3>Pepsico India Holdings Private Limited Versus Assessment Unit Income Tax Department National Faceless Assessment Centre & Ors</h3> Pepsico India Holdings Private Limited Versus Assessment Unit Income Tax Department National Faceless Assessment Centre & Ors - [2024] 465 ITR 622 (Del) Issues involved: Challenging final assessment order, computation sheet, demand notice, and penalty proceedings under Income Tax Act for Assessment Year 2020-21; Seeking directions for objections before Dispute Resolution Panel (DRP).Judgment Summary:Challenging Assessment Order and Penalty Proceedings: The petitioner challenged the final assessment order, computation sheet, demand notice, and penalty proceedings initiated under the Income Tax Act for the Assessment Year 2020-21. The petitioner also sought directions for objections before the Dispute Resolution Panel (DRP). The petitioner's objections were filed before the DRP within the prescribed time limit, but there was an inadvertent failure to intimate the Assessing Officer about the objections. Consequently, the final assessment order was passed by the Assessing Officer, closing the assessment for the year under consideration.Legal Precedents and Arguments: The petitioner argued that the final assessment order should not have been passed before the DRP issued directions for framing the assessment, citing relevant judgments from the High Courts of Karnataka and Bombay. The petitioner relied on legal precedents where courts set aside final assessment orders and consequent notices issued without waiting for DRP directions, emphasizing the importance of following the prescribed procedure under Section 144C of the Act.Court's Decision: After hearing arguments from both parties, the Court referred to a Bombay High Court decision and agreed that once objections are filed within the specified time limit, the final assessment order should be passed in accordance with the DRP's directions. The Court held that setting aside the impugned assessment order would not prejudice the Respondent-Department, as they could pass a fresh assessment order after receiving directions from the DRP. Therefore, the Court allowed the writ petition, setting aside the assessment order, computation sheet, and subsequent notices issued.This judgment highlights the importance of following statutory procedures and ensuring that assessment orders are passed in accordance with directions from the Dispute Resolution Panel to uphold fairness and transparency in income tax assessments.
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