AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 1294
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....e which is the statutory requirement for issuance of notice? 2. Whether on the facts and circumstances of the case, the Hon'ble DRP was justified in holding that notice u/s.143(2) was not served on the assessee when assessee had attended and co-operated with all assessment proceedings without raising any objection regarding service of notice u/s.143(2), when the issue is curable u/s.292BB of the I.T. Act? 3. On the facts and circumstances of the case, the Hon'ble DRP erred in not going into the merits of the additions made as per law. 4. The assessee in CO No.27/PUN/2017 has raised the following grounds of objections:- On facts and in law, 1] The assessee company submits that without prejudice its stand that no notice u/s.143(2) was served on it without the time prescribed under the said section, it is submitted that since the assessment order has been passed without following the procedure laid down in section 144C, the assessment order passed be declared null and void. 2] The assessee submits that the learned A.O. erred in issuing assessment order along with notice of demand u/s. 156 and notice u/s. 274 r.w.s. 271(1)(c) instead of draft assessment order and hence, since ....
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....h ITNS-150, issue notice under section 271(1)(c) of the Act. He further held that the order was a proposed / draft order of assessment passed under section 143(3) r.w.s. 144C(1) of the Act and he further held that the assessee shall within 30 days of the receipt of this draft order file acceptance of variations to the undersigned or file its objections against such variations with the Dispute Resolution Panel under intimation to the undersigned. The assessee filed objections before the DRP and the Assessing Officer also issued final assessment order under section 143(3) r.w.s. 144C(13) of the Act, dated 27.02.2015. 8. The learned Authorized Representative for the assessee has pointed out that the draft assessment order passed in the case of assessee is actually not a draft assessment order since the demand notice along with ITNS-150 had been issued and also notice under section 274 r.w.s. 271(1)(c) of the Act was issued for initiation of penalty proceedings. He fairly admitted that though the Assessing Officer had in the said order said that it is a proposed / draft assessment order but in actual fact, it was assessment order passed by the Assessing Officer determining the demand ....
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....al assessment order, since the Assessing Officer had also issued the demand notice and had also issued show cause notice under section 274 r.w.s. 271(1)(c) of the Act for levy of penalty. In view of the said facts, the Tribunal observed as under:- "6. We have heard the rival contentions and perused the record. Briefly, in the facts of the case, the Assessing Officer had made reference to the TPO vis-à-vis to determine the arm's length price of international transaction entered into by the assessee with its associate enterprises. The TPO vide order dated 28.01.2014 under section 92CA(3) of the Act had proposed the adjustment to arm's length price of international transaction and had passed the said order. The Assessing Officer on receipt of said order passed order under section 143(3) r.w.s. 92C(4) and 144C of the Act. The said order of Assessing Officer was forwarded to the assessee along with letter dated 28.02.2014, wherein the Assessing Officer categorically said that the draft assessment order was being forwarded for necessary action at the end of assessee. It was clearly mentioned in the said letter that on receipt of draft order, the assessee may within 30 day....
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....f the variation or no objections are received within period specified in sub-section (2) of section 144C of the Act. Thereafter, the Assessing Officer is empowered to pass the assessment order within one month from the end of month, in which the acceptance is received or the period of filing objections under sub-section (2) of section 144C of the Act expires. Under sub-section (5) of section 144C of the Act, it is provided that the Dispute Resolution Panel shall in case where 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. Upon receipt of the said directions, the Assessing Officer shall in conformity with the same, complete the assessment without providing any further opportunity of being hearing to the assessee within one month from the end of the month in which such direction is received, notwithstanding anything to the contrary contained in section 153 or 153B of the Act, as per sub-section (13) to section 144C of the Act. In view of the provisions of section 144C of the Act impliedly where the TPO proposes any variation in the income or loss returned by the ass....
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....ssment on 26.03.2013 and subsequently issued a corrigendum on 15.04.2014 to rectify the mistake committed in passing the final order of assessment inter alia to treat it as a draft assessment order. This course of action adopted by the second respondent is contrary to the mandatory provisions contained in the Act and the corrigendum issued by the AO could not cure the defect. The very fact that the Assessing Officer has signed the order of assessment and also assessed the amount payable by the assessee has become complete and it cannot be simply treated as a draft assessment order or it can be rectified by issuing the corrigendum. In fact, pursuant to the order of assessment under section 143C, demand was also made for payment of the amount and such demand has not been withdrawn by the second respondent even after issuing the corrigendum. Even as per the website of the department, the demand made to the petitioner company continues till date and therefore, the final order as well as the the corrigendum issued by the second respondent are vitiated by errors apparent on the face of the record and they are legally not sustainable." 9. The similar issue had arisen before the Pune Ben....
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....er held that the Circular No.5/2010 issued by the CBDT stating that section 144C(1) of the Act would apply only from assessment year 2010-11 and subsequent years and not from assessment year 2008-09 was contrary to the expressed language of the section and the said view of the Revenue was held to be not acceptable. The Hon'ble High Court of A.P thereafter held that the impugned order of assessment dated 23.12.2011 passed by the respondent was contrary to the mandatory provisions of section 144C of the Act is declared as one without jurisdiction, null and void and unenforceable. The Hon'ble High Court of Andhra Pradesh held as under:- "In this view of the matter we are of the view that the impugned order of assessment dt. 23.12.2011 passed by the respondent is contrary to the mandatory provisions of S.144C of the Act and is passed in violation thereof. Therefore, it is declared as one without jurisdiction, null and void and unenforceable. Consequently, the demand notice dated 23.12.2011 issued by the respondent is set aside." 21. The Hon'ble Supreme Court (supra) in ACIT Vs. Zuari Cements Ltd. (supra) had dismissed the Special Leave Petition filed by the Department upon hearing ....
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....a final assessment order is passed and appellate proceedings invoked by it. However, these special rights made available to eligible assessee under Section 144C of the Act are rendered futile, if directly a final order under Section 143(3) of the Act is passed without being preceded by draft assessment order. 6. In the above view, the assessment order dated 23rd March, 2015 passed by the Assessing Officer for the assessment year 2012-13 is completely without jurisdiction. This is so as it has not been preceded by a draft assessment order. Hence, the foundational/basic order viz. the assessment order dated 23rd March, 2015 is set aside and quashed as being without jurisdiction. Consequent orders passed on rectification application as well as on penalty are also quashed and set aside being unsustainable." 11. The learned Authorized Representative for the assessee has placed reliance on the ratio laid down by the International Air Transport Association Vs. DCIT (supra) and the Hon'ble Madras High Court in the case of Vijay Television Writ Petition Nos.1526 and 1527 of 2014 & M.P. Nos.1 and 1 of 2014 vis-à-vis. Whereas the learned Departmental Representative for the Revenue s....