TaxTMI 
TaxTMI 
2024 (12) TMI 809
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....al assessment order u/s 143(3) r.w.s. 144C of the Income-tax Act, 1961 [the Act, for short] bad in law being passed beyond the prescribed time limit goes to the root of the matter, therefore, we decided to adjudicate the same first. 3. Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules. 4. Briefly stated, the facts of the case are that the assessee, a foreign company, received an amount of Rs. 12,96,250/- from Genpact India Pvt Ltd during the A.Y 2017-18 as 'membership fees for accessing server to gain exposure to new customer'. As no tax was deducted at source on the above mentioned payment so ....
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....3 3. Final assessment order u/s. 147 r.w.s. 144. 04.03.2024 (B) Date when AO order was to be passed: 31.07.2023 Date when AO order was passed: 04.03.2024 8. The ld. counsel for the assessee submitted that the Assessing Officer has to pass Final order within 1 month from the end of the month in which period of filing objection u/s 144C(2) expires. The due date for filing objections before the DRP u/s 144C(2) was 26.06.2023. The assessee however, filed its objection before the DRP on 06.07.2023. As the assessee did not file the objections within the time prescribed i.e., one month from the date of draft assessment order, the assessing officer was mandatorily required to pass the final assessment order u/s 144C(4)....
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....ober, 2009, any variation which is prejudicial to the interest of such assessee. 144C(2). On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order,- (a) file his acceptance of the variations to the Assessing Officer; or (b) file his objections, if any, to such variation with,- (i)the Dispute Resolution Panel; and (ii)the Assessing Officer. 144C(3) The Assessing Officer shall complete the assessment on the basis of the draft order, if- (a) the assessee intimates to the Assessing Officer the acceptance of the variation; or (b) no objections are received within the period specified in sub- section (2). 144C(4) The Asses....
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....07.2023. The AO however, passed the final order u/s. 147 r.w.s. 144 on 04.03.2024. From the factual matrix as narrated above we can only arrive at the inescapable conclusion that the AO has not followed the due and mandatory provision of adhering to the prescribed time limit for passing the final assessment order. 13. In the light of the facts mentioned above, when considered under the provisions of section 144C(3)/144C(4) of the Act, we have no hesitation to hold that the final assessment order is passed beyond the prescribed time limit and hence is barred by limitation. We accordingly, hold that the impugned Final assessment order is liable to be quashed as void ab initio. We are fortified in our view by the Pune ITAT held in TDK Elect....
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.... 144C(3) in so far as clause (a) is concerned is that if an assessee accepts the variation as per the draft order, then there is no need to sail through the DRP or the appellate route. In that scenario, the AO, in terms of section 144C(4)(a), will be required to complete the assessment on the basis of the draft order within a period of one month from the end of the month in which the acceptance is received. Clause (b) of section 144C(3) deals with a situation of completing the assessment on the basis of the draft order in a case in which no objections are received within the period specified in sub-section (2). In the latter situation, clause (b) of section 144C(4) provides that the AO will pass the assessment order within one month from th....
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....(2) expires. 17. Adverting to the facts of the instant case, it is found that, the period of 30 days for filing objections within sub-section (2) of section 144C expired on 23.01.2019. Going by the mandate of sub- section (3) of section 144C(3)/144C(4), the AO was supposed to complete the assessment on the basis of the draft order by February, 2019. As against this, the AO actually completed the assessment u/s. 144C(13) on 24.10.2019. Such a completion of assessment not only under the wrong provision but also beyond the limitation period is ultra vires and hence cannot stand. We declare the assessment order to be time barred and ex consequently null and void, with the effect that the returned income will automatically get accepted ....