2018 (8) TMI 575

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....rtion of the Assessee was correct and the absence of draft assessment order goes to the root of the assessment. Consequently the Tribunal held the same in favour of the Respondent-Assessee. 3. In this appeal the Revenue contends that the order passed by the Tribunal is incorrect in view of the provisions of Section 144C(13) of the Act and there is no need for a draft assessment order in the said sub-section and that the Assessee never took any objection to the non-issuance of the draft order. It is also contended that if the matter is remanded, a draft assessment order is not necessary. These according to the Revenue are the substantial questions of law in the present appeal.   4. We have heard Ms. A. Razaq, learned Standing Counsel for the Appellant-Revenue and Mr. P. Pardiwala, learned Senior Advocate for the Respondent-Assessee. 5. Since the appeal raises a question relating to Section 144C of the Income Tax Act, a brief overview of this provision is necessary. Section 144C lays down a scheme for reference to Dispute Resolution Panel. The Assessing Officer at the first instance forwards a draft of the proposed order of assessment to the eligible Assessee if he proposes t....

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....he income derived from the industrial undertaking was at Rs. 14,66,97,731/- against returned loss of Rs. 35,83,40,981/-. 7. The Assessee filed its objection before the Dispute Resolution Panel on 28 January 2010. The Panel, by order dated 24 September 2010, directed the Assessing Officer to modify the order passed on Arms Length Price by the Transfer Pricing Officer. The Transfer Pricing Officer, by its order dated 29 October 2010, directed the transfer pricing adjustment be made under Section 92CA at Rs. 44,18,04,792/-. The Assessing Officer passed an order on 24 November 2010, giving effect to the revised transfer pricing adjustment of Rs. 44,18,04,792/-. 8. The Assessee filed an appeal before the Income Tax Appellate Tribunal against the order passed by the Assessing Officer under Section 144C(13) dated 24 November 2010. Since the Transfer Pricing Officer had changed in the meanwhile, the Tribunal held that the new Transfer Pricing Officer should have given hearing to the assessee and by order dated 1 October 2012 set aside the Assessment Order dated 24 November 2010.   9. The matter was sent back to the Transfer Pricing Officer who gave hearing to the Assessee and passe....

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....rement of the scheme of Section 144C and in view of the admitted factual position, the Tribunal was not in error in admitting the additional ground. 13. Ms. Razaq, the learned Standing Counsel contended that since the proceedings themselves show that the order was passed under Section 144C(13) and as per the scheme of the Section there was no requirement of any draft assessment order. It was also submitted that upon remand it is not necessary to issue draft assessment order again. 14. Mr. Pardiwala contended that a draft assessment order ought to have been issued and upon failure of the Officer to do so the Assessee has lost a valuable right. Mr. Pardiwala submitted that, when the Dispute Resolution Panel sent the proceedings back to the Transfer Pricing Officer, categorical observations were made that the order was passed in violation of the principles of natural justice and exercise had to be taken afresh. He submitted that therefore the earlier draft assessment order did not exist and a fresh draft order had to be issued and the failure has vitiated the further proceedings and, therefore, there is no error in the order passed by the Tribunal and there is no question of law ari....

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....in accordance with law after providing adequate and sufficient opportunity of being heard on the various objections and then decide the matter afresh in accordance with the law. Thus, the Tribunal set aside the assessment order and restored the matter back to the file of the Assessing Officer. Ms. Razaq raised a contention that the order of the Panel was not set aside. In paragraph 10 of the order the tribunal had adverted to this issue. After reaching the conclusion that the assessment has to be set aside, the Tribunal considered to which authority it should be sent to. In that context, the Tribunal noted that even the Dispute Resolution Panel had not dealt with all objections including the objections regarding the denial of natural justice. Therefore, the Tribunal found it necessary that the matter should be de novo considered by the Assessing Officer. It is in this context the matter was relegated to the stage of Section 144C(1). Further proceedings were therefore not under Section 144C(13) as the entire exercise was set aside to be started afresh. Therefore the contention that the order passed thereafter was under Section 144C(13), cannot be accepted. 17. In the case of Inter....