TaxTMI 
TaxTMI 
2021 (9) TMI 1074
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....7,070/-. The AO noticing that the case was selected for scrutiny under CASS issued statutory notices, to commence the scrutiny assessment. The AO noticed that as the total transaction of the assessee with the related party exceeded Rs. 5 crores, and it attracted the provisions of Transfer Pricing, he referred the same to the Transfer Pricing Officer (hereinafter referred to as 'TPO') after getting approval of the Ld. Pr. CIT-12, Kolkata dated 27.12.2016. Thereafter, the AO noted that pursuant to the reference the TPO passed the order u/s. 92 CA(3) of the Act on 31.07.2017 determining Arms Length Pricing Adjustment (hereinafter referred to as 'ALP') at Rs. 8,92,829/-; and thereafter he computed the total income by passing the assessment order u/s. 143(3) of the Act dated 25.09.2017 at Rs. 16,09,900/-. According to the assessee, he preferred an appeal before the Ld. CIT(A) which was dismissed ex parte. Thereafter, the assessee preferred an appeal before the Tribunal; and the Tribunal vide order dated 30.04.2019 in ITA No. 2169/Kol/2018 restored the appeal back to the file of the Ld. CIT(A) for fresh adjudication of the appeal. When the subject matter of the Transfer P....
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..../s. 263 of the Act by holding that such assessment order is erroneous as well as prejudicial to the interest of revenue, which would pave way for him to exercise the revisional jurisdiction u/s.263 of the Act. The Ld. PCIT on the examination of the record noted that the assessment order passed by the Assessing Officer was framed without issuing draft order of the proposed addition to the assessee as is required under section 144C of the Act, and had passed an order under section 143(3) of the Act making addition of Rs. 8,92,829/-. The said order passed by the Assessing Officer, as per the Ld. PCIT was not in conformity with law and was held to be erroneous and prejudicial to the interest of revenue and accordingly, show cause notice was issued under section 263 of the Act asking the assessee to explain as to why the said order passed by the Assessing Officer under section 143(3) of the Act should not be revised or set-aside under section 263 of the Act. The contention of the assessee before us is that the omission on the part of the Assessing Officer not to comply with the provisions of section 144C(2) of the Act by not framing the draft assessment order and by not providing the st....
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....e draft of the proposed assessment order to the assessee and thereafter, if no objections are received and/or the assessee files his acceptance to the variation to the Assessing Officer, then the Assessing Officer is empowered to complete the assessment within one month from the end of the month thereof. In case, the assessee files his objection before the DRP and where the said Panel issues directions as it thinks fit, then the Assessing Officer on receipt of such directions shall complete the assessment in conformity with such directions. In view of the said provisions of the Act, we note that the compliance to section 144C of the Act is mandatory in all such cases, where the TPO proposes variation in the income or loss returned, which is prejudicial to the interests of assessee. Only after complying with the conditions laid down in section 144C of the Act, the Assessing Officer is empowered to pass the assessment order under section 143(3) r.w.s. 144C of the Act by completing the assessment on such enhanced income or variation in the loss returned by the assessee. 7. In the case of Vijay Television vs. DRP [2014] 225 Taxman 35 (Mad), it was held in para 12 that non-passing of d....
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....ed by the TPO under section 92CA(3) of the Act, the Assessing Officer had passed the assessment order under section 143(3) of the Act raising a demand of Rs. 27,40,71,913/- without giving an opportunity to the assessee under section 144C of the Act, observed that where the Assessing Officer proposes to make on or after 01.10.2009, any variation in the income or loss returned by the assessee, then notwithstanding to the contrary contained in the Act, he shall first pass the draft assessment order, forward the same to the assessee and after assessee files his objections, if any, the Assessing Officer shall complete the assessment within one month, in view of the provisions of section 144C of the Act. It was further observed that the assessee is also given an option to file an objection before the DRP, in which the latter can issue directions for the guidance of Assessing Officer to enable him to complete assessment. Where the Assessing Officer accepted the variation submitted by the TPO without giving the petitioner any opportunity to object to it and pass the assessment order, it was held by the Hon'ble High Court of A.P that the impugned order of assessment was clearly contrary....