TaxTMI 
TaxTMI 
2017 (4) TMI 660
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....s claim by the assessee amounting to Rs. 7,64,15,421 ?" {C} "Whether the ITAT has erred in law in holding that any non compliance with the scheme of Section 144C is fatal to the assessment ?" {D} "Whether the ITAT has erred in law in holding that the issue which is not raised in draft assessment order cannot be raised in the assessment order and A.O taking up such issues at the stage of passing final assessment order will be contrary to the scheme of Section 144C ?" 2. Having heard Shri Pranav G. Desai, learned counsel appearing on behalf of the Revenue, the present Tax Appeal is admitted to consider the following substantial question of law :- "{A} Whether the ITAT has erred in law in deleting the addition made by the Assessing Officer on account of upward adjustment to the arm's length price adjustment of Rs. 1,48,43,000/- to the payment of technical services paid by assessee to its associated enterprise ?" 3. Now so far as proposed Questions No. B to D are concerned, for the reasons stated hereinbelow, we find that no substantial question of law arises, and therefore, the present Tax Appeal qua proposed Questions no. B to D is required to be dismissed and/or t....
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....be said to be in breach of Section 144C of the I.T Act, by the impugned judgment and order, the learned Tribunal has set-aside such disallowances made by the Assessing Officer under Section 10AA of the Act. 6. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Tribunal, the Revenue has preferred the present Tax Appeal to consider the following questions of law : [A] "Whether the ITAT has erred in law in deleting the addition made by the Assessing Officer on account of upward adjustment to the arm's length price adjustment of Rs. 1,48,43,000/- to the payment of technical services paid by assessee to its associated enterprise ?" [B] "Whether the ITAT has erred in law in deleting the addition made by the Assessing Officer on account of 50% disallowance of deduction under Section 10AA, being excess claim by the assessee amounting to Rs. 7,64,15,421/- ?" [C] "Whether the ITAT has erred in law in holding that any non compliance with the scheme of Section 144C is fatal to the assessment ?" [D] "Whether the ITAT has erred in law in holding that the issue which is not raised in draft assessment order cannot be raised in draft ass....
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.... in directing to delete disallowance made by the Assessing Officer under Section 10AA of the Act. 8.4 Shri Pranav Desai, learned counsel appearing on behalf of the Revenue has vehemently submitted that as there is no decision of this Court on the point, the present Tax Appeal may be admitted to consider the aforesaid questions of law. 8.5 Making the above submissions, it is requested to admit the present Tax Appeal even qua Questions no. B to D also. 9. Heard Shri Pranav G Desai, learned counsel for the Revenue at length on the proposed Questions no. B to D. We have considered the Questions No. B to D and the issue with respect to the scope and ambit of Section 144C of the Act in detail and at length vis-a-vis the impugned order passed by the learned Tribunal deleting the disallowance made by the Assessing Officer under Section 10AA of the Act. 10. In the present case, it is an admitted position that when the Assessing Officer forwarded a draft of the proposed assessment order to the assessee on 30th December 2014, he has not proposed to make disallowance of Rs. 7,64,15,421/- under Section 10AA of the Act. It is also not in dispute that in the draft assessment order iss....
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....e draft order, (a) file his acceptance of the variations to the Assessing Officer; or (b) file his objections, if any, to such variation with, (i) the Dispute Resolution Panel; and (ii) the Assessing Officer. (3) The Assessing Officer shall complete the assessment on the basis of the draft order, if (a) the assessee intimates to the Assessing Officer the acceptance of the variation; or (b) no objections are received within the period specified in sub-section (2). (4) The Assessing Officer shall, notwithstanding anything contained in [Section 153 or section 153B], pass the assessment order under sub-section (3) within one month from the end of the month in which, (a) the acceptance is received; or (b) the period of filing of objections under sub-section (2) expires. (5) The Dispute Resolution Panel shall, in a case where any objection is received under sub-section (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment. (6) The Dispute Resolution Panel shall issue the directions referred to in sub-section (5), after consideri....
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....tunity of being heard to the assessee, within one month from the end of the month in which such direction is received. (14) The Board may make rules for the purposes of the efficient functioning of the Dispute Resolution Panel and expeditious disposal of the objections filed under sub-section (2) by the eligible assessee. 12. On considering Section 144C of the Act, as a whole, the following eventualities emerge : [A] That, as per sub-section (1) of Section 144C, the Assessing Officer shall, notwithstanding anything to the contrary contained in the Act, in the first instance, is required to forward a draft of the proposed order of assessment to the eligible assessee, if he proposes to make any variation in the income or loss returned which is prejudicial to the interest of such assessee. [B] That, on receipt of the draft order, the eligible assessee, within a period of thirty days of the receipt by him of the draft order, is required to [i] file his acceptance of the variations to the Assessing Officer, or [ii] file his objections, if any, to such variation with (a) the Dispute Resolution Panel; and (b) the Assessing Officer. [C] As per sub-section [3] of Section 1....
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....ons issued by DRP, complete, notwithstanding anything to the contrary contained in Section 153 or Section 153B of the Act, the assessment without providing any further opportunity of being heard to the assessee, within one months from the end of the month in which such direction is issued. 13. Considering the aforesaid, it appears that there is complete machinery provided under Section 144C of the Act. In the entire scheme of Section 144C, it refers to the draft assessment order ie., variation in the income or loss returned proposed in the draft assessment order. Even the objections are required to be submitted by the assessee with respect to the variation proposed in the draft assessment order. Even, the DRP is also required to consider the objections raised by the assessee with respect to the variation proposed in the draft assessment order. The DRP is also required to issue directions with respect to the variation proposed in the draft draft assessment order and even considering the records relating to the draft order. Considering the entire scheme of Section 144C of the Act, it appears that in conformity with the principles of natural justice, the assessee is required to be ....