TaxTMI 
TaxTMI 
2023 (6) TMI 1376
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....r, 31, 2019 passed by the assessing officer without passing draft assessment order, is bad in law and void ab initio as the same has been passed in violation of section 144C of the Income-tax Act, 1961." 3. Shri Paras Savla appearing on behalf of the assessee submitted at the outset that the assessee is in third round of litigation for Assessment Year 2010-11 before the Tribunal. The assessment u/s. 143(3) R.W.S. 144C(13) of the Income Tax Act, 1961 [ in short 'the Act] was framed by the Assessing Officer vide order dated 17/05/2013 treating receipts from international sales and marketing as Royalty/Fee for Technical Services (FTS). The assessee carried the issue in appeal before the CIT(A). The CIT(A) vide order dated 30/11/2015 upheld the findings of Assessing Officer characterizing the receipts as royalty and directed the Assessing Officer to follow the Tribunal order dated 14/01/2015 for the Assessment Year 2006-07 to 2009-10 i.e. to tax receipts in the hands of the assessee as representative assessee or any other group company, who owes the brand. Against the said order of CIT(A), the assessee in first round filed appeal before the Tribunal in ITA NO. 2217/Mum/2016. In the me....
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....1830/Mum/2021 in support of additional grounds of appeal raised by the assessee. 3.2 The ld. Authorized Representative of the assessee submitted that the Tribunal in the first round of litigation remanded the issue to the file of Assessing Officer to adjudicate the issue of 'mutuality' raised by the assessee. Thus, it was not simplicitor remand to reconsider the issue that have already been decided by the Assessing Officer in the first round of assessment order. The assessee had raised an argument on 'principle of mutuality', which was not earlier considered by the Assessing Officer or the CIT(A) though a specific ground was raised before the CIT(A). The ld. Authorized Representative of the assessee submitted that final assessment order without passing draft assessment order under the provisions of section 144C of the Act is unsustainable. 4. Per contra, Shri Soumendu Kumar Dash representing the Department vehemently defended the impugned order and the assessment order. The ld. Departmental Representative submitted that the assessment order was passed consequent to the directions of the Tribunal, hence, there was no requirement to pass draft assessment order. The Assessing Office....
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....f the assessee, are not in dispute. The present appeal emanates from the assessment order dated 31/12/2019 passed in pursuance to the directions of the Tribunal vide order dated 09/03/2018. For the sake of completeness the relevant extract of the Tribunal order in ITA No. 2217/Mum/2016 dated 09/03/2018 (supra) is reproduced herein below: "5. A perusal of the orders of the Assessing Officer as well as that of CIT(A) reveal that the impugned sums have been held to be taxable as Royalty income. In fact, the CIT(A) has noted in para 5 of the impugned order that similar issues have been decided by the Tribunal in assessee's own case vide order dated 14.01.2015 (supra) and directed the Assessing Officer to follow the directions of the Tribunal in this year too. Before us, it is pointed out in the aforesaid precedent, assessee's plea based on the principle of mutuality has not been adjudicated, whereas in the instant year, specific Ground has been raised, i.e. Ground of appeal no. 9 (before the ITAT) as also by way of Ground of appeal 'B' raised before the CIT(A). 6. The aforesaid factual matrix has not been controverted by the ld. CIT-DR, while he has placed reliance on the orders of....
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....aised by the assessee by way of additional ground of appeal. From the submissions made by rival sides the fact emerges that in the second round, the AO passed final assessment order dated 29/12/2016 without passing the draft assessment order. 10. Provisions of section 144C of the Act lays down the procedure to be followed under special mechanism. The AO is first required to pass draft assessment order u/s 144C (1) of the Act. On receipt of the draft assessment order, the eligible assessee within 30 days either accepts the variations or may file objections, against such variations before the DRP. If no objections are filed against the draft assessment order, the AO shall pass the final assessment order. In case the objections are filed before the DRP, the DRP shall issue the directions and it is only after the directions of the DRP that the AO shall pass the final assessment order after giving effect to the directions of the DRP. 11. In the instant case, the Revenue has pointed that the assessment order dated 29/12/2016 was passed to give effect to the directions of the Tribunal, hence, there was no requirement to pass the draft assessment order. It is evident from the cause tit....
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....icer is obliged to comply with it in full and not partly. This impugned order was passed consequent to the order of the Tribunal dated 5th May, 2017 restoring some of the issues before it to the Assessing Officer for fresh adjudication. 9. This "fresh adjudication" itself would imply that it would be an order which would decide the lis between the parties, may not be entire lis, but the dispute which has been restored to the Assessing Officer. According to us, the order dated 31st January, 2018 is not an order merely giving an effect to the order of the Tribunal, but it is an assessment order which has invoked Section 143(3) of the Act and also Section 144C of the Act. This invocation of Section 144C of the Act has taken place as the Assessing Officer is of the view that it applies, then the requirement of Section 144C(1) of the Act has to be complied with before he can pass the impugned order invoking Section 144C(13) of the Act. In fact, Section 144C(13) of the Act can only be invoked in cases where the assessee has approached the DRP in terms of sub-Section 144(C)(2)(b) of the Act and the DRP gives direction in terms of Section 144C(5) of the Act. In this case, the assessment ....