TaxTMI 
TaxTMI 
2025 (6) TMI 1332
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....ontrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation which is prejudicial to the interest of such assessee. (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. (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). (4) The Assessing Officer shall, notwithstanding anything contained in section 153 [or section 153B], pass the assessment order under sub-section (3) within one month from the end of the month in which,- ....
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....he assessee or the interest of the revenue, respectively. (12) No direction under sub-section (5) shall be issued after nine months from the end of the month in which the draft order is forwarded to the eligible assessee. (13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained in section 153 [or section 153B], the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received. (14) The Board may make rules for the purposes of the efficient functioning of the Dispute Resolution Panel and expeditious disposal of the objections filed under sub-section (2) by the eligible assessee. "[(14A) The provisions of this section shall not apply to any assessment or reassessment order passed by the Assessing Officer with the prior approval of the "[Principal Commissioner or] Commissioner as provided in sub-section (12) of section 144BA.] "[(14B) The Central Government may make a scheme, by notification in the Official G....
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....bjection is filed before the Dispute Resolution Panel (DRP) as provided under Section 144C (2) (b), the DRP shall complete its proceedings within a period of 9 months from the end of the month in which the draft order is forwarded to the eligible assessee. Under sub-section (13), time limit is stipulated for the Assessing Officer to complete the assessment on receipt of the direction from the DRP. The Assessing Officer shall complete the assessment within one month from the end of the month in which such direction is received. The prime ground of challenge in these writ petitions is regarding non-adherence to the time limit fixed under sub-section (13). 4. The relevant dates to be noted in both cases are given below:- Events W.P.(C)No. 9520/2014 W.P.(C)No. 9521/2014 Date of issuance of draft assessment order 27.03.2013 20.03.2013 Date of filing of objections before the DRP 26.04.2013 24.04.2013 Date of issuance of directions by DRP 13.12.2013 11.12.2013 Date of issuance of assessment order 25.03.2014 12.03.2014 Therefore in both cases, indisputably the assessment orders were issued beyond the time limit under S.144C (13). Hence the....
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.... track basis." 7. The learned counsel submitted in view of the above that the incorporation of Section 144C of Income Tax Act was with the laudable goal of speedy resolution/mitigation of disputes. He therefore submitted that the time limits ingrained in the provisions of Section 144C are so consciously incorporated by the law makers with the aim of introducing a fast-track mechanism. He hence contended that any breach of the time limits would consequently vitiate the proceedings and the provisions of Section 144C are not merely procedural in nature. The learned counsel made reference to various reported judgments. He placed heavy reliance on the judgment of a Division Bench of Bombay High Court reported in Vodafone Idea Limited v. Central Processing Centre and Others [2023 SCC OnLine Bom 2464]. The Division Bench of the Bombay High Court considered the provisions of Section 144C and held that it is a self-contained provision, which carves out a separate class of assessees, i.e. eligible assessees. Further, it was held that if the provisions of Section 144C are not strictly adhered to, the entire object of providing an alternate redressal mechanism in the form of DRP would stand....
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....rest of assessee. Hence, the FAO cannot be believed that the DRP direction was received by him only on 23rd August 2023 despite being uploaded on the ITBA portal on 25th March 2021. The failure on the part of department to follow the procedure under Section 144C of the Act is not merely a procedural irregularity, but is an illegality and vitiates the entire proceeding. 23. In a decision in the matter of Turner International India Private Limited v. Deputy Commissioner of Income Tax, Circle-25(2), New Delhi, the Delhi High Court has held that the question "whether the final assessment order stands vitiated for failure to adhere to the mandatory requirements of Section 144C of the Act?", is no longer res integra and any order passed contrary to Section 144C of the Act cannot be sustained. 24. In a decision cited by Mr. Mistri in the matter of Shell India Markets (P.) Ltd. (supra), this Court has also held as follows : "10. Sub-section (13) of Section 144C, therefore, is very clear inasmuch as the Assessing Officer shall, upon receipt of the directions issued under Sub-section (5), in conformity with the directions, complete the assessment within one month f....
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....sments under the Act. It is relevant to note that in addition to the non-obstante clause under Section 144C (1) with respect to other provisions of the Act, there is a specific exclusion of the application of Section 153 from the frame work of Section 144C. This specific exclusion of Section 153 from the proceedings under Section 144C, exemplifies the rigour of the specific time limits provided under Section 144C. Under Section 153 of the Act, longer time limit is prescribed, whereas, specific time limit is prescribed under Section 144C of the Act. The specific exclusion of Section 153 from the ambit of Section 144C is a conscious action of the law-maker. If the legislature does not have any intention to stick on with the time limit prescribed in Section 144C, there was no necessity of insertion of Section 144C, since there was already a provision under Section 153 contemplating time limit for completion of assessments or re-assessments. Hence, it cannot be said that Section 144C is procedural, but, on the other hand, it is a substantive provision specifying time limit for completing proceedings by the assessee, the assessing officer and the DRP. ..............................
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....n, that it was rendered on almost identical set of facts and hence these writ petitions may also be allowed. 9. Sri. P.G. Jayashankar, the learned Standing Counsel for the Income Tax Department, submitted that the charging provisions of the Act and the provisions providing for machinery are to be understood and interpreted differently. He contended that Section 144C is essentially a machinery provision which provides for a swift procedure. He submitted that a breach of the time limit prescribed under sub-section (13) cannot be considered as a vitiating factor affecting the very validity of the assessment order. He submitted that the Assessing Authority is not vested with any discretion under Section 144C when the DRP issues directions. Once the DRP issues directions, the Assessing Authority has to issue an assessment order following the directions as such. The Assessing Authority in such a situation exercises only an administrative power. He therefore contended that even if the Assessing Authority takes time more than that is provided under sub-section (13) of Section 144C, no prejudice is caused and the assessment need not be considered as vitiated. He referred to various provi....
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....e. The learned Standing Counsel contended relying on the above said judgment that the provisions of Section 144C being machinery provisions, strict interpretation of the same in such a manner as argued by the petitioners would be erroneous. Such an interpretation would lead to defeating the provisions of the Act. He further submitted that the judgment of the Bombay High Court, relied on by the learned counsel for the petitioner was rendered in a case in which the assessment order was issued more than 2 years after the DRP issued directions. Hence, according to the learned Standing Counsel the same is distinguishable on facts. He also pointed out that the judgment of the learned Single Judge of this Court relied on by the learned counsel for the petitioner is under challenge before the Division Bench of this Court. He hence submitted that the writ petitions are liable to be dismissed, upholding the assessment. 11. Though the judgment of the learned Single Judge in Allianz Cornhill Information Services Private Limited, Rep. by its Chief Financial Officer v. Union of India rep. by Secretary, Ministry of Finance (Department of Revenue) and Others [2023 SCC OnLine Ker 11076] is under....
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....14. Section 144C was incorporated to the Act by an amendment. Amendments are thoughtful, purpose-driven changes made to an existing legislation by the legislature. When an amendment is made, it must be assumed that the legislature felt it was appropriate to alter the law as it existed prior to the amendment. The legislature, well aware of the scheme and provisions of the statute as it existed, proceeds to amend the statute when the need of a change is felt. Amendments are hence impelled by the conviction of the legislature regarding changes required to be made for various considerations and reasons. 15. An amended provision becomes an integral part of the statute and it cannot be considered and interpreted in isolation, detached from the other provisions of the statute. However, apart from keeping in mind the object of the statute, it is essential to keep the legislative purpose of effecting the amendment also in mind while attempting to interpret an amended provision. Otherwise, the interpretation may defeat the purpose of the amendment. 16. In Rameshwar Prasad and Ors v. State of UP and Ors [(1983) 2 SCC 195] the Hon'ble Supreme Court held thus: "Whenever a court i....