2026 (2) TMI 772 - HC - Income Tax

DRP power after final assessment: cannot issue directions or record findings; such findings are to be disregarded.

The document clarifies that once a final assessment order under the statutory scheme has been passed, the Dispute Resolution Panel (DRP) ceases to have ... Directions by the Dispute Resolution Panel u/s 144C - Dispute Resolution Panel (DRP) directions or record findings after a final assessment order u/s 144C(4) HELD THAT:- After analyzing the provisions of Section 144C as well as the law laid down by this Court in Undercarriage and Tractor Parts Pvt.Ltd. [2023 (9) TMI 759 - BOMBAY HIGH COURT] we are of the view that the DRP ought to have simplicitor dismissed the objections of the Petitioner on the sole ground that a final assessment order has already been passed and ought not to have given any finding in relation to any matters relating thereto. We, accordingly, direct that the findings given in relation to whether the objections filed by the Petitioner before the DRP were intimated to the AO, or otherwise, were wholly unwarranted in the facts of the present case. We, accordingly, direct that those findings of the DRP shall not be considered when the CIT (Appeals) decides the Appeal filed by the Petitioner against the final assessment order - CIT (Appeals) shall decide the Appeal filed by the Petitioner without being influenced by any of the observations made by the DRP in the impugned order. Issues: Whether the Dispute Resolution Panel (DRP) could issue directions or record findings after a final assessment order under Section 144C(4) of the Income-tax Act, 1961 had been passed, and whether the DRP's findings regarding non-intimation to the Assessing Officer should be considered.Analysis: Section 144C permits the DRP to issue directions 'to enable' the Assessing Officer to complete the assessment (see Section 144C(5)) and contemplates consideration and issuance of directions while assessment proceedings are pending (see Section 144C(6), (7), (8), (11), (12) and (13)). Those provisions presuppose that the assessment is not finalised because the directions are for guidance to complete the assessment and are time bound. Where a final assessment order under Section 144C(4) has been passed, the statutory scheme shows that assessment proceedings have ended and the DRP's power to issue directions or make findings in relation to completing the assessment no longer subsists. Applying that statutory framework to the present facts, the DRP should have dismissed the objections as functus officio once the final assessment order was already passed and ought not to have recorded findings on whether intimation was given to the Assessing Officer.Conclusion: The DRP had no power to issue directions or record findings after the final assessment order was passed; the DRP's findings regarding non-intimation to the Assessing Officer are unwarranted and shall not be considered by the appellate authority when deciding the pending appeal.