TaxTMI 
TaxTMI 
2025 (3) TMI 150
X X X X Extracts X X X X
X X X X Extracts X X X X
....ether on the facts and in the circumstances of the case, the Tribunal ought to have held that in view of the order under Section 143(3) read with Section 144C(3) of the Income Tax Act passed by the Assessing Officer on 28.02.2011 (sic should read 27.12.2010), there can be no further proceedings before the DRP? 3. Whether on the facts and in the circumstances of the case, the order passed by the Assessing Officer under Section 143(3) read with Section 144C(3) of the Income Tax Act on 25.08.2011 is valid in law inasmuch as the Assessing Officer had already passed an order under Section 143(3) read with Section 144C of the Income Tax Act on 27.12.2010 and again on 28.02.2011? 4. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the adjustments made to international transactions by the Transfer Pricing Officer and confirmed by the Dispute Resolution Panel? 5. Whether on the facts and in the circumstances of the case, the Tribunal was right i law in holding that no adjustment is required in respect of differential method of depreciation provided by the comparable companies as otherwise the profit margins of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../12/2010 sent along with the above mentioned draft Assessment Order to the assessee may be treated as withdrawn.' 7. On the heels of this corrigendum, an order of assessment was passed on 28.02.2011 styled as a 'final assessment order' (FAO). Thus, the Department has made a turn-around in the procedure followed, eschewing the order of assessment originally passed on 27.12.2010 and claiming that the same was only a DAO. Incidentally, as against the order of assessment dated 27.12.2010, the appellant had filed a statutory appeal within 30 days as provided for under Section 246A of the Act. 8. The grievance of the assessee hinges on the position that the procedure under Section 144C has not been followed in this case. Section 144C, entitled 'Reference to Dispute Resolution Panel', is a self-contained code that requires, at the first instance, a Draft Assessment Order (DAO) to be passed. A DAO is a set of assessment proposals that are put to the assessee soliciting its acquiescence or objections thereto. 9. Upon receipt of a DAO, the assessee is required to respond, and shall, within 30 days of receipt of the DAO, (a) file its acceptance of the variations c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntemplated under Section 144C of the Act. Clearly, the procedure set out under Section 144C was never under consideration by the officer, and the mere issuance of a corrigendum on 21.02.2011 proposing to treat order dated 27.12.2010 as a DAO, cannot save the gross and substantive error committed. 16. According to him, all proceedings further to, and post passing of order dated 27.12.2010, including purported final assessment order dated 28.02.2011, directions of the DRP dated 20.07.2011 and order of the Tribunal dated 30.01.2012 are bad in law, since the very assumption of jurisdiction in respect of the subsequent proceedings is vitiated. 17. For this proposition, he relies on two decisions, one of a Division Bench of this Court in the case of ACIT v. Vijay Television Private Limited [407 ITR 642] and the other of the Writ Court in G.E. Oil & Gas India P. Ltd v. ACIT [WP.No.1575 of 2020 dated 05.01.2021). 18. Mr.J.Narayanaswamy, learned Senior Standing Counsel, appearing for the Department would defend the orders of the authorities on four primary grounds. 19. Firstly, he cannot but accede to the position that order dated 27.12.2010 does certain aberrations, in that it ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r assessment by the assessing officer by issuance of notices on various dates. None of those notices contain reference to the procedure set out under Section 144C of the Act. 27. Be that as it may, the assessing authority has taken a conscious choice while finalising the assessment, that the procedure to be followed would be in terms of the Section 143 of the Act, as the order of assessment does not contain any of the elements of Section 144C of the Act and neither has it followed the statutory stipulations contained therein. 28. In our considered view, mere reference to Section 144C(1) without having followed any of the procedures paving the way to the passing of a DAO will not lead to the inference that the assessment order passed is a DAO. 29. As regards the judgment in the case of Mantra Industries Ltd. (supra), we agree with the assessee that the circumstances under which that judgement was passed were entirely different. The Faceless Assessment Scheme was introduced in 2007 and sets out the procedure to be followed in framing an assessment deploying a methodology that maintains the anonymity of the officers involved. 30. In the case of Mantra Industries Ltd. (supr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 144C(2) of the Act. In such circumstances, where the order of assessment dated 27.12.2010 is conclusive, containing neither proposals for assessment or extending an option to the assessee, the assessing officer has this to state in the purported final order of Assessment dated 28.02.2011: 'As per Section 144C(1) of the Income Tax Act, 1961 a draft assessment order dated 27.12.2010 was prepared and duly sent to the assessee Company. As per Section 144C(2), on receipt of draft assessment order, the assessee Company ought to have filed its acceptance to the variation in the income proposed in the draft assessment order prepared by the Assessing Officer or file its objections to such variations, if any, with the Dispute Resolution Panel (DRP) within thirty days of the receipt of the draft assessment order. However, the assessee has neither filed its acceptance nor filed its objections with DRP.' 36. The above statement is wholly erroneous and indicates total non-application of mind by the officer. The officer has made reference to the statutory requirement under Section 144C(2) of the Act, which requires an assessee on receipt of a DAO, to either indicate acceptan....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on service of notice and not so much on the content of the notice itself. In the present case, the notices sent prior to framing assessment dated 27.12.2010, do not adhere to the statutory stipulations of Section 144C of the Act and such aberrations in law are not saved by virtue of Section 292BB. 42. Moreover, the proviso to Section 292BB states that that Section shall not apply where the assessee has raised an objection in relation to that notice before the completion of the assessment or pre-assessment. In this case, we find that the assessee has, at the very first instance, raised the ground relating to illegality of the proceedings before the DRP in its objection dated 30.03.2011. 43. This was prior to finalisation of the proceedings both before the DRP as well as passing of final assessment order and hence, the benefit of the proviso would directly come to the aid of the assessee since the argument in relation to illegality of procedure has been raised at the very threshold. 44. We also draw support from the decision of the Division Bench of this Court in Vijay Television Private Limited (supra). In the case of Vijay Television, an order of assessment had been passe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Court reiterating the argument that the assessment order was null and void as it had been ante-dated and contained interpolations and thus ought to have been annulled as being a nullity in law. 51. The Supreme Court was of the view that the appeal was misconceived and rejected the same confirming the directions of the Division Bench. It is in that context that the Bench has made a fine distinction between orders that are null and void and orders that are irregular, wrong or illegal. We extract below the relevant paragraphs:- '15. All irregular or erroneous or even illegal orders cannot be held to be null and void as there is a fine distinction between the orders which are null and void and orders which are irregular, wrong or illegal. Where an authority making order lacks inherent jurisdiction, such order would be without jurisdiction, null, non est and void ab initio as defect of jurisdiction of an authority goes to the root of the matter and strikes at its very authority to pass any order and such a defect cannot be cured even by consent of the parties. (See: Kiran Singh & Ors. Vs. Chaman Paswan & Ors.1). However, exercise of jurisdiction in a wrongful manner cannot r....