AI Drafter 
TaxTMI 
TaxTMI 
2025 (5) TMI 977
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....ed 20.03.2025 (Annexure -'F') bearing DIN ITBA/PNL/S/270A/2024- 25/1074766070(1) issued by the 1st Respondent for the assessment year 2022-23; (d) pass such other or further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity." 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record 3. In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner submits that in relation to assessment year 2022-2023, returns of the income filed by the petitioner was selected for scrutiny assessment and in the course of proceedings, Transfer Pricing Officer (TPO) passed an order under Section 92CA(3) of the Income Tax Act (for short 'IT Act'), determining a transfer pricing adjustment. It is contended that under Section 144C of the IT Act, in a case where variation is proposed to the income as a consequence of the order of TPO, the person is treated as an 'eligible assessee' in the first instance and a draft assessment order....
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....t that the statutory scheme underlying the said provision clearly indicates that under sub-section (2), after the draft assessment order dated 29.03.2021 was issued to the petitioner, the petitioner had two options viz., either to file his acceptance as provided under sub-section (2)(a) or to file objections as per sub-section (2)(b) of the I.T. Act. 4. It is contention of the petitioner that the petitioner submitted his objections on 26.04.2021 to the Dispute Resolution Panel (DRP) within the prescribed period; in view of change in the mechanism of assessment being shifted to the faceless scheme coupled with the Covid-19 pandemic exigency, the petitioner could not intimate the Assessing Officer about filing of the objections before the DRP; however, petitioner intimated the same to the Assessing Officer on 30.04.2021. It is the grievance of the petitioner that the despite the petitioner submitting his objections to the draft assessment order before the DRP as well as intimating the same to the Assessing Officer, the Assessing Officer proceeded to pass the impugned assessment order without following the mandatory procedure prescribed in sub-sections (5) to (13) of Section ....
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....ion to the DRP merits acceptance, particularly in view of the Government Orders, circulars etc. as well as the orders of the Apex Courts extending the period of limitation. At any rate, the petitioner had chosen to exercise the option of filing objections to the draft Assessment Order warranting the DRP to proceed further before the Assessing Officer takes further steps as provided under sub-sections 5 to 13 to Section 144C. Under these circumstances, I am of the considered opinion that the impugned Assessment Order passed by respondent No.1- Assessing Officer without awaiting directions from the DRP, before whom the matter was pending pursuant to the petitioner filing his objections within the prescribed period is clearly arbitrary, illegal and without jurisdiction or authority of law and the same deserves to be quashed and necessary directions are to be issued to the DRP as well as the Assessing Officer in this regard. 8. In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) The impugned assessment order bearing No.ITBA/AST/S/143(3)/2021-22/1-3283 0156(1) at Annexure-A dated 30.04.2021, demand notice bearing No.ITB....
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....r Section 144C (13) of the Act. It is further submitted that in terms of Annexure-A4, the DRP has declared that the directions made by it to the Assessing Officer have become infructuous and non-est is required to be set aside. The observations at paragraph No.3.0 at Annexure- A4 is extracted as follows: "In view of the above, the Panel opines that the DRP, according to Section 144C, has jurisdiction only over the Draft Assessment Orders and not over Final Assessment Orders. In the present case as the Final Assessment order predates the DRP directions, the said DRP directions become infructuous and non-est." 4. It is submitted that the assessment order will have to be set aside in light of the directions issued by the DRP at Annexure-N and the matter will have to be proceeded afresh in terms of Section 144C (13) of the Act. 5. Sri. M. Dilip, learned counsel appearing for the revenue on the other hand would point out that under Section 144C (2)(b)(ii), there is an obligation on the assessee to keep the assessing officer informed regarding filing of objections before the DRP and if such procedure is not adhered to strictly, no fault can be found as regards ....
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....ctions are issued, the assessing officer need not wait under Section 144C (13). However, the fact remains that once objections are filed before the DRP and till directions are issued, the assessing officer cannot proceed further. This is in light of mandate under Section 144C (13). Accordingly, nonintimation to the assessing officer under Section 144C (2)(b)(ii) though is a lapse on the part of the petitioner, the only way of meaningfully and harmoniously interpreting the obligation of filing objections under Section 144C (2)(b)(ii) is to construe the procedure that once such objections are filed before the DRP and till the decision is taken by the DRP regarding directions to be passed, the assessing officer ought not to proceed further. This is the procedure to be followed. In the present case where objections no doubt have been filed before the DRP and directions passed though at a later point of time, in light of the manner of construing the procedure the assessing officer ought not to have proceeded and ought to have waited till directions were passed by the DRP, as the directions have though been subsequently passed on 15.05.2023. Accordingly, the assessment order is required ....