TaxTMI 
TaxTMI 
TaxTMI 
2023 (2) TMI 1294
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....half of the assessee submits that the additional ground raised by the assessee goes to the root of validity of assessment proceedings and is purely legal. The ground challenging the validity of jurisdiction can be filed at any stage. No fresh evidence is required to be filed for adjudication of additional ground of appeal. In supports of admission of additional ground, the learned Authorised Representative (AR) placed reliance on the decision of Hon'ble Supreme Court of India in the case of National Thermal Power Co. ltd Vs. CIT 229 ITR 383. The learned AR submits that in case the assessee succeeds on additional ground, the grounds raised in appeal on merits of the addition would become academic. 4. Shri Soumendu Kumar Dash representing the Department vehemently opposed the admission of additional ground at this stage. 5. We have heard the submissions made by rival sides on the admission of additional ground. The assessee in additional ground of appeal has assailed the validity of assessment proceedings. The contention of the assessee is, assessment order dated 29/12/2016 has been passed by the Assessing Officer (AO) without passing draft assessment order in proceedings u/s 144C ....
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....s that the provisions of section 144C mandates the AO to pass the draft assessment order before passing the final assessment order u/s 144C (13) of the Act. In the instant case, the AO has passed the final assessment order dated 29/12/2016 u/s 143(3) r.w.s. 254 r.w.s. 144C (6) of the Act. The final assessment order without draft assessment order is null and void. Hence, the said assessment order is liable to be quashed. 7. Per contra, the learned Departmental Representative (DR) vehemently supporting the assessment order submitted that the order is valid and there is no infirmity in the assessment order. The learned DR submits that the assessment order was passed by the AO to give effect to the directions given by the CIT(A) who had relied upon the order passed by the Tribunal in assessee's own case for earlier assessment years. The AO while passing the assessment order has clearly mentioned the above facts. This was not a regular assessment order u/s 144C of the Act, but merely in the nature of giving effect to the directions of higher authorities. Therefore, no draft assessment order u/s 144C (1) was required to be passed by the AO. 8. Controverting the submissions made on beha....
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.... by the DR in the present case. The Hon'ble High Court rejected the contentions of the Revenue and held that the draft assessment order has mandatorily to be passed u/s 144C of the Act, even in remand proceedings. The relevant findings of the Hon'ble Court are extracted herein below: "8. The contention of the Revenue that the requirement of passing a draft Assessment Order under Section 144C of the Act would only extend to the orders passed in the first round of proceedings or in respect of an order passed by the Assessing Officer in remand proceedings by the Tribunal which has entirely set aside the original assessment order. This distinction which is sought to be drawn by the Revenue is not borne out by Section 144C of the Act. Infact, the Delhi High Court in JCB (India) Ltd. (supra) held that, even in partial remand proceedings from the Tribunal, the Assessing Officer is obliged to pass a draft assessment order under Section 144C(1) of the Act. According to us, the Assessing Officer, is obliged to, in terms of Section 144C of the Act to pass a Draft Assessment Order in all cases where he proposes to assess the Foreign Company under the Act by making a variation in the returned....
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....ied, then the procedure of passing a draft assessment order under Section 144C(1) of the Act is mandatory and has to be complied with, which has not been done. 11. In the above view, the impugned order is without jurisdiction. Thus, the plea of alternate remedy advanced by the Revenue so as to not entertain this petition, does not merit acceptance in the present facts." (Emphasized by us) 12. The Hon'ble Bombay High Court in the case of Exxon Mobil Company (P.) Ltd. Vs. DCIT in a recent decision reiterated the legal requirement of passing draft assessment order in proceeding u/s 144C of the Act arising out of remand from the Tribunal. The Hon'ble High Court held that where Tribunal remanded the matter to give effect to transfer pricing issue, assessee's case would be eligible u/s 144C of the Act and the AO was required to pass draft assessment order before issuance of final assessment order. Similar view was taken by the Hon'ble Delhi High Court in the case of Turner International India (P.) Ltd. Vs. DCIT (supra). The Hon'ble Delhi High Court held that failure of AO to adhere to mandatory requirement of section 144C (1) of the Act, where the final assessment order has been pas....