TaxTMI 
TaxTMI 
2021 (9) TMI 709
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....nding Counsel Mr. Christopher Abraham and learned Senior Counsel Mr. Joseph Markos for parties. 2. The Principal Commissioner of Income Tax/Revenue is the appellant. M/s.Apollo Tyres Ltd., Kochi/Assessee is the respondent. The Revenue, aggrieved by the order dated 10.01.2017 in ITA No.222/Coch/2016, is in appeal before this Court. The issues canvassed in the appeal relate to Assessment Year 2010-11. Prefaced in the beginning, the issues raised by the Revenue arise under Section 144C read with Section 143(3) vis-a-vis Section 263 of the Income Tax Act, 1961 (for short 'the Act'). 2.1 On 23.10.2012 the assessee filed income tax returns for the Assessment Year 2010-11. The Joint Director of Income Tax/Assessing Officer vide asses....
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.... interests of revenue on the above discussed points. To that extent the order passed under section 144C read with Section 143(3) of the Income-tax Act, 1961, dated 28.03.2014 is set aside and the Assessing Officer is directed to examine and pass an order as per the provisions of Income-tax Act, after giving ample opportunity to the assessee. The Assessing Officer is directed to examine the issue an allow the expenditure strictly as per the provisions of Section 35(2AB) of the IT Act and 40(a)(ia) of the Income-tax Act, 1961." The assessee filed ITA No.222/Coch/2016 questioning the order of appellant dated 23.03.2016. The Tribunal, through the order assailed in the appeal, allowed ITA No.222/Coch/2016. Hence the instant appeal. 3. The ....
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....me by the assessee or misapplication of a provision of law by the Assessing Officer. The procedure under Section 144C of the Act does not inhibit the Revenue/appellant from invoking the jurisdiction when prejudice is noticed by the Principal Commissioner of Income Tax. The remedy of the Department against assessment order dated 18.02.2015 (Annexure-D) is before the Tribunal and such remedy even when availed is limited to the issues concerning the draft assessment order, directions of DRP, and assessment made by the Assessing Officer, but not to the items which are not included in the return of the assessee or wrong application of fact or law, resulting in prejudice to the Revenue. These are and were independent of orders in Annexures-B, C, ....
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....terdict draft assessment order. According to him, if this uncertainty is accepted, the assessee would never know which is going to be the final order, namely the assessment order emanating pursuant to directions of DRP or orders made pursuant to directions under Section 263 of the Act. He read out the reasons stated by the Tribunal and concluded by canvassing that no exception to basic requirements, i.e., error and prejudice, are examined by the Tribunal. He has invited our attention to the orders of the Income Tax Appellate Tribunal, New Delhi ITA No.1399/Del/2017 Assmt Year 2012-13, and Income Tax Appellate Tribunal, Kolkata ITA No.1142/Kol/2016 Assmt Year 2009-10. These two appeals are at the instance of the assessee. The purpose of rely....
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....e assessee either accepts or does not file objection, the Assessing Officer is authorized to make the draft as final assessment. Per contra, in a case where objections are received by the Assessing Officer, the case is made over to DRP for resolution. This mechanism is more in the nature of an alternate dispute resolution mechanism for expeditious finalization of disputed returns falling under Section 144C of the Act. The DRP conducts hearing/enquiry, issues directions to the Assessing Officer on the draft assessment forwarded to DRP for directions. The Assessing Officer complies with the directions and issues the assessment order. Section 144C is not reproduced, for, in the present case, the Commissioner has interdicted the draft assessmen....
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....ct the draft assessment order is only a proposed assessment order and there is no demand notice attached to the draft assessment order. In cases covered by Section 144C of the Act, the assessment order comes into picture only after an assessment order is passed pursuant to draft assessment order or in compliance with the directions of the DRP. The draft assessment order by itself cannot levy tax on the assessee. Therefore, there is no question of loss of revenue in the draft assessment order. It is further held that Section 263 has no application for revising the draft assessment order proposed by the Assessing Officer. 9. Our independent consideration of the circumstances; also the scheme of the Act and the view of the Tribunal are simi....