TaxTMI 
TaxTMI 
2025 (7) TMI 450
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....n of income for assessment year 2012-13 on 28.11.2012. The return was duly processed under Section 143(1) of the Act and the same was selected for scrutiny under Section 143(2) of the Act. Since appellant had international transactions with its associated enterprises, the case was transferred to the Transfer Pricing Officer [hereinafter referred to as 'TPO'] under Section 92CA of the Act for determining the Arm's Length Price. (c) On 29.01.2016, TPO made an adjustment to the Arm's Length Price of the international transactions undertaken by appellant amounting to Rs. 7,03,16,975/-. Pursuant to the same, a Draft Assessment Order was passed on 31.03.2016. Appellant company filed its objections before the Dispute Resolution Panel [hereinafter referred to as the 'DRP'], Bangalore. DRP in addition to the adjustments made by TPO had proposed additional adjustments and directed TPO to re-compute the Arm's Length Price. (d) Consequent to the directions of DRP, the TPO, vide order dated 20.12.2016, reworked the downward adjustment to the International Transaction with the associated enterprises at Rs. 20,67,02,931/- instead of the original adjus....
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....WT India (P.) Ltd. v. Assistant Commissioner of Income-tax [(2023) 155 taxmann.com 450]. 5. Mr.B.Ramanakumar, learned Standing counsel for the revenue per contra submitted that since the remand was to decide a particular issue, it was not necessary for AO to once again follow the procedure prescribed under Section 144C of the Act and therefore, the non issuance of Draft Assessment Order would not render the assessment order invalid. He further submitted that assessee had a right to challenge the assessment order if it is aggrieved and hence, the learned Single Judge was justified in dismissing the writ petition. 6. ITAT, while remanding the matter to AO, had observed as follows: "...In view of this, in the interest of justice, we remit the issue regarding application of the method whether the CUP Method or TNMM as a most appropriate method, to the file of AO to see whether the AE derived any benefit or mark up on the price charged by the vendor for supply of raw materials to assessee's AE, which it has sold to assessee. With this observation, we remit the present issue for selection of appropriate method to the AO for fresh consideration. Since we have remitted t....
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....nsport Association v. Deputy Commissioner of Income-tax 3 of this Court and in the case of Zuari Cement Ltd v ACIT 4 of the Division Bench of the Hon'ble Andra Pradesh High Court has held that 'the failure to pass a draft assessment order under Section 144C(1) of the Act would result in rendering the final assessment as one without jurisdiction." Paragraphs 9,14,17 and 20 of Andrew Telecommunications (Supra) read as under: "9. The matter was sent back to the Transfer Pricing Officer who gave hearing to the Assessee and passed a fresh order on 30th January 2014. Thereafter, the Assessing Officer, without issuing any draft assessment order, proceeded to pass an order on 2nd February 2015. The Assessee challenged the said order before the Commissioner of Income Tax (Appeals) and the appeal was partly allowed by the commissioner of Income Tax (Appeals) by order dated 13th March 2015. As against this order, the Revenue filed the Income Tax Appeal No. 271/2015 before the Income Tax Appellate Tribunal and the Assessee filed a Cross Objection No. 62/2015. 14. Mr. Pardiwala contended that a draft assessment order ought to have been issued and upon failure of the Of....
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....r is submitted in the affidavit-in-reply filed through one Harish Kelkar. In the affidavitin-reply, reliance has been placed on a judgment of the Hon'ble Madras High Court in the case of M/s. Enfinity Solar Solutions Private Limited v. The Deputy Commissioner of Income Tax, Corporate Circle- 2(1), Chennai 5. In fact, in the said judgment also the position as in law as noted above has been re-affirmed. Paragraph 14 of the judgment reads as under: "14. Careful perusal of the above provision, as rightly pointed out by the Petitioner, the draft order is mandatory under Section 144(C) of the Income Tax Act. An Assessing Officer, at the first instance, forward a draft proposed order of assessment, enabling the assessee to accept the variations to the Assessing Officer or file his objections, if any, with the Disputes Resolution Panel and the Assessing Officer. Thus, the procedure of passing of draft assessment order provides a right to an assessee to file his objections before the Disputes Resolution Panel and the Assessing Officer for vindicating his grievances and redress the same. It is needless to state that the provisions of the Act must be complied with by the executiv....
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....the ITAT. 17. The Court is unable to agree with the submissions made on behalf of the Revenue by Mr. Jain. Section 144C (1) of the Act is unambiguous. It requires the AO to pass a draft assessment order after receipt of the report from the TPO. There is nothing in the wording of Section 144C (1) which would indicate that this requirement of passing a draft assessment order does not arise where the exercise had been undertaken by the TPO on remand to it, of the said issue, by the ITAT. 18. It was then contended by Mr. Jain that the assessment order passed by the AO should not be declared to be invalid because of the failure to first pass a draft assessment order under Section 144C of the Act. In this regard, reference is made to Section 292B of the Act. 19. As already noted, the final assessment order of the AO stood vitiated not on account of mere irregularity but since it was an incurable illegality. Section 292B of the Act would not protect such an order. This has been explained by this Court in its decision dated 17th July 2015 passed in ITA No. 275/2015 (Pr. Commissioner of Income Tax, Delhi-2, New Delhi v. Citi Financial Consumer Finance India Pvt. L....