TaxTMI 
TaxTMI 
2017 (10) TMI 684
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....rice." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : in compliance to the directions issued by ITAT vide letter F.No.DCIT/Cir 12 (1)/2013-14/714 dated 25.11.2013 AO/DCIT written to DRP-1, New Delhi for issuance of directions regarding the issue remitted back by the Tribunal. However, ITO/DRP-I written back that the matter is restored back to the AO and not to the DRP. Again, a letter F.No.DCIT/ Cir 12 (1)/2013-14/724 dated 03.03.2014 was written to DRP-1 for issuance of directions for ITAT order. However, ld. DRP has sent the copy of the previous reply issued by it. Consequently, AO passed assessment order without any direction issued by the DRP. AO in compliance to the order passed by the Tribunal computed the income of the assessee company as under :- "Subject to the above, the total income of the assessee is computed at Rs.5,26,41,184/- as under : Amount in Rupee Income as per return of income Nil Add : i) Excess claim of depreciation (As per para 3 above) 1,14,36,265 ii) Addition under transfer pricing adjustment as discussed in para 4.3 above 4,12,04,919 TOTAL TAXABLE INOCME ....
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....ns made by the assessee and their validity. Herein also, similar is the position though for the year under consideration, the objections of the assessee were rejected for want of limitation, which was not the case for the assessment year 2006-07. Be that as it may, the fact remains that the submissions of the assessee with regard to this issue were not gone into, much less adjudicated upon. Being seized of the matter by way of ground No.2 raised by the assessee, we deem it appropriate to remit this matter also to the file of the AO to be decided afresh in accordance with law on providing due opportunity of hearing to the assessee. The AO shall, no doubt, keep in consideration, besides facts for the year under consideration, the decision to be arrived at on both the issues, for the assessment year 2006-07." 8. No doubt, the Tribunal vide its order dated 15.03.2012 passed in the first round of litigation in this case remitted the matter back to the file of the AO to decide afresh but in accordance with the law by providing opportunity of being heard to the assessee. 9. In the backdrop of the aforesaid facts and circumstances of the case, the sole question for determination in t....
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....rder has been set aside by the Tribunal and the issue was directed to be decided afresh after providing opportunity of being heard to the assessee. 13. Identical issue has come up before Hon'ble High Court of Delhi in case cited as JCB Limited vs. DCIT - WP (C) No.3399/2016 order dated 07.09.2017 wherein question arises for determination is, "Whether, after the remand proceedings, the AO could have, without issuing a draft assessment order under section 144C of the Act, straightway issued the final assessment order." 14. Hon'ble High Court determined the issue in favour of the assessee by returning following findings :- 15. Mr Syali, learned Senior Counsel for the Assessee, referred to the decision of this Court dated 17th May 2017 passed in W.P.(C) No.4260/2015(Turner International India Pvt. Ltd. v. Deputy Commissioner of Income Tax, Circle 25(2), New Delhi) to urge that the AO could not have passed the final assessment order without complying with the mandatory requirement under Section 144C of the Act whereby first a draft order had to be issued in respect of which an objection can be filed by the Assessee before the DRP. The failure to do so, according ....
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....Tax, Delhi - 2, New Delhi v. Citi Financial Consumer Finance India Pvt. Ltd.) where it was held : "Section 292B of the Act cannot be read to confer jurisdiction on the AO where none exists. The said Section only protects return of income, assessment, notice, summons or other proceedings from any mistake in such return of income, assessment notices, summons or other proceedings, provided the same are in substance and in effect in conformity with the intent of purposes of the Act." 20. The Court further observed that Section 292B of the Act cannot save an order not passed in accordance with the provisions of the Act. As the Court explained, "the issue involved is not about a mistake in the said order but the power of the AO to pass the order." 21. In almost identical facts, in Turner International (supra), this Court held in favour of the Assessee on the ground that it was mandatory for the AO to have passed a draft assessment order under Section 144C of the Act prior to issuing the final assessment order. The following passages from said decision are relevant for the present purposes: "11. The question whether the final assessment order stands vit....
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....ory'. The following passages of the said decision of Gujarat High Court are relevant for the present purposes: "6. These statutory provisions make it abundantly clear that the procedure laid down under Section 144C of the Act is of great importance and is mandatory. Before the Assessing Officer can make variations in the returned income of an eligible assessee, as noted, sub-section (1) of Section 144C lays down the procedure to be followed notwithstanding anything to the contrary contained in the Act. This non-obstante clause thus gives an overriding effect to the procedure 'notwithstanding anything to the contrary contained in the Act'. Sub-section (5) of Section 144C empowers the DRP to issue directions to the Assessing Officer to enable him to complete the assessment. Sub-section (10) of Section 144C makes, such directions binding on the Assessing Officer. As per Sub-Section 144C, the Assessing Officer is required to pass the order of assessment in terms of such directions without any further hearing being granted to the assessee. 7. The procedure laid down under Section 144C of the Act is thus of great importance. When an Assessing Officer proposes to....