TaxTMI 
TaxTMI 
2021 (8) TMI 256
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....ing to the assessment year 2011-2012. 4. WP No.38884 of 2015 is taken as a lead case as the order passed by the Dispute Resolution Panel under Section 144-C(5) of the Income Tax Act, is challenged. 5. Elaborate discussion regarding the disputed facts became unnecessary as the first respondent passed the final assessment order, which is appealable. However, it is brought to the notice of this Court that there is a blatant violation of the provisions of the Income Tax Act, with reference to the order passed by the Dispute Resolution Panel under Section 144-C(5) of the Income Tax Act, affecting the rights of the Assessee and therefore, if the legal issues, hitting the rights of the Assessee, are adjudicated, the same would be sufficient for the purpose of disposing of the other writ petition also. 6. The facts in general are not in dispute. The issue raised is that whether the Dispute Resolution Panel is competent to reject the objections on account of non-appearance of the Assessee on the hearing date. 7. The learned Senior Counsel, appearing on behalf of the writ petitioner, drawn the attention of this Court with reference to the order impugned passed by the Dispute Reso....
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....ng Officer shall complete the assessment on the basis of the draft order. However, if an objection is filed by the Assessee, then sub-section (5) of Section 144-C of the Income Tax Act, would come into operation. Sub- section (5) of Section 144-C of the Income Tax Act, denotes "The Dispute Resolution Panel shall, in a case where any objection is received under subsection (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment". Therefore, it is duty mandatory on the part of the DRP to decide the objections on merits. 12. The DRP is undoubtedly having certain Expertise in the Tax Regime. Thus, adjudication before the DRP is a valuable opportunity provided both to the Assessee as well as to the Assessing Officer. Either of the parties may get guidance for the purpose of completion of the assessment proceedings. Thus, the importance attached to the DRP under the Income Tax Act, at no circumstances, be undermined. 13. The Statute contemplates, on receipt of objections from the Assessee, the DRP has to issue certain directions as it thinks fit for the guidance of the Assessing Officer. Thus, an adjudicatio....
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....ound to consider the materials denoted as the case may be and issue suitable directions as it thinks fit. Therefore, the DRP has no option but to deal with objections, if any, filed by an eligible Assessee on merits and, in the event of non-consideration, it is to be construed that the right conferred under the Act, to an Assessee has not been complied with. 19. Sub-section (7) of Section 144-C of the Act, states that "The Dispute Resolution Panel may, before issuing any directions referred to in sub-section (5),- (a) make such further enquiry, as it thinks fit; or (b) cause any further enquiry to be made by any income-tax authority and report the result of the same to it." 20. Sub-section (8) of Section 144-C of the Act, also states that "The Dispute Resolution Panel may confirm, reduce or enhance the variations proposed in the draft order so, however, that it shall not set aside any proposed variation or issue any direction under sub-section (5) for further enquiry and passing of the assessment order. Explanation.-For the removal of doubts, it is hereby declared that the power of the Dispute Resolution Panel to enhance the var....
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....ry. 24. Sub-section (11) to Section 144-C of the Act, denotes that "no direction under sub-section (5) shall be issued unless an opportunity of being heard is given to the assessee and the Assessing Officer on such directions which are prejudicial to the interest of the assessee or the interest of the revenue, respectively". 25. The above sub-section unambiguously clarifies that DRP shall not issue any directions under sub-section (5) unless an opportunity of hearing is given to an Assessee and the Assessing officer. 26. Sub-section (11) to be linked with sub-section (2)(b)(i) and (ii) of Section 144-C of the Act, because an opportunity is bound to be given to the Assessee as well as to the Assessing Officer. 27. Before the DRP, both the Assessee as well as the Assessing Officer are getting an opportunity to adjudicate certain issues for the purpose of solution and the correctness of the decisions. Therefore, the opportunity contemplated under the Act for the Assessee as well as the Assessing Officer must be allowed to be exercised in complete form, so as to reach the purpose and object for which the DRP is constituted under the Act itself. It is a valuable right provid....
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....er. The DRP issued notice to the Assessee, fixing the hearing date. On certain personal grounds, as stated by the petitioner, the Assessee could not able to appear on the date of hearing. However, the DRP rejected the objections only on the ground that the Assessee had not appeared before the DRP on the date of hearing. Thus, this Court has no hesitation in forming an opinion that the mandatory provisions under sub-sections (5) and (6) of Section 144-C have not been complied with by the DRP, while dealing with the objections filed by the Assessee under sub-section (2)(b) of Section 144-C of the Act. 31. In this regard, the Income Tax (Dispute Resolution Panel) Rules, 2009 also may be looked into. The said Rules were framed in exercise of the powers conferred under sub-section (14) of Section 144-C of the Act. The Central Board of Direct Taxes make Rules to regulate the procedures of the DRP. 32. Rule 7 of the Income Tax (Dispute Resolution Panel) Rules, 2009 provides hearing of objections. 33. Rule 10 of the Income Tax (Dispute Resolution Panel) Rules, 2009 deals with issue of directions. Sub-clauses (1) to (3) of Rule 10 of the Income Tax (Dispute Resolution Panel) Rules,....
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....disputes. However, if the principles of violation of natural justice or the jurisdiction directly hitting the provisions of the Statute is established, then the High Court has to look into the seriousness of such violations for the purpose of restoring the right of the aggrieved persons and issue suitable orders to provide such opportunities as contemplated. 39. This apart, the DRP consists of three Senior most Commissioners of Income Tax Department. It is a decision, which is to be taken by the Panel having expertise in the income tax matters. Thus the right conferred and the importance at no circumstances be undermined. 40. The learned Senior Standing Counsel, appearing on behalf of respondents, raised a pertinent point that the Assessee would get an opportunity to raise all the points raised in the objections before the Assessing Officer as well as before the Appellate Authority. However, such a submission has no force as the valuable right conferred under the Act to the Assessee can never be taken away. In the event of glaring violation of the provisions of the Act, the High Court has to provide an appropriate relief to the aggrieved persons. In other words, if the point ....