2024 (11) TMI 696 - HC - Income Tax

Petitioner's challenge to assessment order fails as officer clarified Section 143(3) application despite initial portal error

BT Global Communications Inida Pvt. Ltd. Versus Deputy Commissioner Of Income Tax

Delhi HC dismissed the petition with costs. Petitioner challenged an assessment order claiming it was erroneously passed under Section 144C instead of ... Assessment u/s 143(3) or 144C - Validity of draft assessment order u/s 144C - petitioner claims that the AO has erred in passing the impugned order as the petitioner is not an ‘eligible assessee’ - According to the Revenue, the impugned order is not an order passed u/s 144C of the Act, but an order passed under Section 143 (3) of the Act, and therefore, the present petition is ill-founded - HELD THAT:- Plainly, after the AO had furnished the said clarification, there could be no possible confusion in the mind of the petitioner that the impugned order was passed u/s 143 (3) of the Act. Petitioner also submits that the portal also reflects that an order was issued u/s 144C of the Act and not u/s 143 (3) of the Act. In view of the communication dated 13.01.2020, the petitioner could not harbour any confusion in this regard as well, as the AO had clearly pointed out that there was some systemic error in reflecting the impugned order as an order u/s 144C of the Act. The petitioner’s claim that the impugned order is passed under Section 144C of the Act is clearly erroneous. The petitioner’s challenge to the impugned order is on the ground that it is an order under Section 144C of the Act, which as noted above, is incorrect. The challenge to the impugned order on the assumption that it is a draft assessment order under Section 144C of the Act after notwithstanding the clear language of the contents of the impugned order, is unsustainable. There was no scope of raising such a challenge after the AO had amply clarified that the impugned order was issued under Section 143 (3) of the Act and the assessee’s contentions to the contrary are insubstantial. In view of the above, the present petition is dismissed with costs. Issues:1. Whether the impugned order was passed under Section 143 (3) or Section 144C of the Income Tax Act, 1961Rs.Analysis:The petitioner challenged an order assessing their total income, claiming it was a draft assessment order under Section 144C, while the Revenue argued it was an order under Section 143 (3). The key issue was to determine the nature of the impugned order. The court noted that the contents of the order clearly indicated it was an assessment order under Section 143 (3) based on the tabular statement and language used in the order. The AO had made additions to the income returned by the assessee, disallowing certain deductions and initiating penalty proceedings under Section 270A. The court highlighted specific additions made by the AO, such as disallowance of license fee and deduction claimed under Section 80IA. The final computation of income reflected it was an order under Section 143 (3) and not Section 144C.The petitioner argued that the heading of the order mentioned 'Draft Order u/s 144C,' but the court emphasized that the language and contents of the order were unambiguous in identifying it as an order under Section 143 (3). The court addressed the petitioner's contention regarding the Document Identification Number (DIN) mentioning 144C, clarifying that the order number did not determine the nature of the order. The court also discussed the manual generation of the demand under Section 156 and the petitioner's subsequent correspondence with the AO, where the AO clarified that the order was under Section 143 (3).Moreover, the court dismissed the petitioner's claim that the impugned order was passed under Section 144C, highlighting the AO's clarification and systemic error in mentioning it as a draft order under Section 144C. The court found the challenge to the impugned order on the assumption of it being a draft assessment order under Section 144C unsustainable, especially after the AO's clarification. Consequently, the court dismissed the petition with costs to be deposited with the Delhi High Court Legal Services Committee.In conclusion, the court's detailed analysis focused on interpreting the nature of the impugned order, emphasizing the importance of the language and contents of the order in determining whether it was passed under Section 143 (3) or Section 144C of the Income Tax Act, 1961.