AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (10) TMI 563
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....or the respondent-Department. 3. The issue involved in the present appeal is whether the Tribunal was justified in setting aside the assessment order dated 11.12.2018, treating the same as final assessment order. Rather than, treating it to be a draft assessment order under Section 144-C of the Income Tax Act, 1961 (for short 'the Act'). 4. The brief facts which led to the filing of the instant appeal is that the respondent/assessee is involved in the business of rendering support services in computer aided engineering field. For the assessment year 2015-16, respondent/assessee filed its return on 27.11.2015. The assessment of the respondent/assessee was subsequently subjected to scrutiny under Section 143 (2) of the Act and reference was made to Transfer Pricing Officer (TPO) for determination of the Arm's Length Price (ALP) of the assessee's international transactions entered with its associate enterprises. 5. In terms of the procedure prescribed before an assessment is finalized, the statute requires the Assessing Authority to first forward a draft assessment order to the assessee, calling upon his objections if any. The objections are to be submitted within thirty (30)....
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.... considered the same and thereafter, passed the final assessment order. 10. The learned counsel for the appelant referred to an earlier decision rendered by the Tribunal in this regard and which was relied upon by the CIT (Appeals) i.e. in the case of M/s. BS Hyderabad vs. ACIT 2(3) in ITA No.2186/Hyd/2017. Therefore, the order of the CIT (Appeals) was self-contradictory in itself. 11. According to the learned counsel for the appellant the Tribunal erred in not considering the fact that the respondent/assessee waited till the final assessment order was passed on 10.01.2019 and thereafter challenged the same by way of an appeal before the CIT (Appeals). 12. According to the learned counsel for the appellant there is no dispute to the fact that he did not receive the draft Assessment Order, yet, he chose not to submit any objections. And it is only when the final assessment order was passed on 10.01.2019 that the respondent/assessee filed an appeal before the CIT (Appeals). It is further contended that the reliance by the Tribunal to the judgement of the Hon'ble Supreme Court also was not proper, as the said judgement was rendered under an entirely different contextual backg....
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....cer or any other authority; (e) records relating to the draft order; (f) evidence collected by, or caused to be collected by, it; and (g) result of any enquiry made by, or caused to be made by, it. (7) 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. (8) 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. (9) If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be decided according to the opinion of the majority of the members. (10) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer. (11) No direction under sub-section (5) shall be issued unless an opportunity of being heard is given to t....
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....er reads as under: "The assessment is completed under section 143(3) r.w.s. 92CA of the Income-tax Act, 1961. Credit for prepaid taxes is given. Penalty proceedings u/s 271AA & 271BA are being initiated separately. A copy of the assessment order along with demand notice is issued to the assessee". A perusal of the aforesaid operative part of the so called draft assessment order would further establish that it was not a draft assessment order, but was a final assessment order after the assessment was concluded. The operative part also clearly mentioned about the raising notice of demand under Section 271-AA and Section 271- BA of the Act. 15. The High Court of Judicature at Andhra Pradesh in the case of M/s.Zuari Cement Ltd. vs. The Assistant Commissioner of Income Tax has held as under: "As this has occurred after 01.10.2009, the cut off date prescribed in sub-section (1) of S.144C, the Assessing Officer is mandated to first pass a draft assessment order, communicate it to the assessee, hear his objections and then complete assessment. Admittedly this has not been done and the respondent has passed a final assessment order dt.23.12.2011 straight away. Theref....
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....er dated 15.04.2013, the second respondent granted thirty days time to enable the assessee to file their objections. On receipt of the corrigendum dated 15.04.2013, the petitioner company approached the first respondent, but the first respondent declined to issue any direction to the assessment officer on the ground that the first respondent has got jurisdiction only to entertain such an appeal if the order passed by the second respondent is a pre- assessment order. Therefore, it is evident that the first respondent declined to entertain the objections raised by the petitioner company on the ground that the order passed by the second respondent is not a draft assessment order, rather it is a final order. Thus, the first respondent had treated the order dated 26.03.2013 of the second respondent as a final order and therefore refused to entertain the objections filed on behalf of the petitioner company". The said decision has been further affirmed by the Division Bench of the Madras High Court in the case of the Assistant Commissioner of Income-tax, Media Circle-11, Chennai v. Vijay Television (P.) Ltd. [2018] 95 taxmann.com 101 (Madras) wherein, the Division Bench at paragraph No....
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....s under: "Undisputed facts of the case are, in the draft assessment order, the ACIT has ordered issuance of demand notice and to initiate penalty proceeding under Section 271(1)(c) of the Act. Both the draft assessment order and the demand notice are dated December 28, 2018. Argument canvassed by the Revenue is, though demand notice has been issued, assessee had understood the order dated December 28, 2018 as a draft assessment order and filed its objections before the DRP. The defect if any is a curable one. On the other hand, Shri. Nageshwar Rao's argument is that the ACIT had completed the assessment at the stage of passing the draft assessment order and issued the demand notice. Thus, the re-assessment proceeding was complete. This procedure followed by ACIT is contrary to law laid down in Vijay Television (P.) Ltd. case (supra) and other authorities. Section 144C lays down a detailed procedure. Under Section 144C(1), the AO is required to forward a draft of the proposed order of assessment to the assessee. Assessee may filed its acceptance or objection before the DRP and the AO. If assessee intimates its acceptance or no objections are received withi....