ITAT sets aside assessment order after DRP wrongly rejected late objections due to delayed receipt of draft order

The ITAT Chennai set aside both the AO's final order under section 144C(13) and the DRP's dismissal of objections filed 5 days late. The DRP had rejected objections for exceeding the 30-day time limit from receipt of the draft assessment order. However, the assessee demonstrated that the draft order was received after the 30-day period had already expired. The CIT-DR could not controvert this fact regarding the delayed receipt. Without examining the merits, the ITAT restored the matter to the AO for fresh adjudication, allowing the appeal for statistical purposes.

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Issues involved:
The judgment deals with the final assessment order passed by the Income Tax Officer, International Taxation, Chennai u/s. 147 r.w.s. 144C(13) of the Income Tax Act, 1961. The issues involved include the addition of application of income and non-assessment of income related to payment to non-resident u/s. 195, payment of credit card bills, purchase of units of mutual fund, and purchase of immovable property.

Payment to Non-Resident u/s. 195:
The appellant raised objections regarding the treatment of payments as income in the assessment order, arguing that no reasons were provided for treating the payments as income. The appellant submitted various documents to support investments and expenses made, emphasizing that the delay in filing objections before the DRP was the reason the case was not decided on merits.

Delay in Filing Objections and Fresh Adjudication:
The appellant admitted a delay in filing objections before the DRP, which led to the objections being rejected. The appellant contended that the draft assessment order was received after the 30-day time limit specified by section 144C(2) of the Act. The Tribunal found that the details supporting the appellant's case were not with the AO or the DRP, and in light of this, the matter was restored back to the AO for fresh adjudication.

Conclusion:
The Tribunal allowed the appeal for statistical purposes, setting aside the orders of both the AO and the DRP. The matter was remanded back to the AO for fresh adjudication in accordance with the law. The decision was pronounced in open court on 30th April 2024 at Chennai.

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