TaxTMI 
TaxTMI 
2026 (1) TMI 1205
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....d writ petition being Special Civil Application No.5973 of 2025 is taken as a lead matter and the facts are borrowed from it. BRIEF FACTS : 3. By way of present writ petitions, the petitioner - Company has assailed the impugned Assessment Order dated 26.03.2025 and 27.03.2025 passed by the respondent No. 2 under Section 143(3) read with Sections 263 and 144B of the Income Tax, 1961 (for short 'the IT Act') for the Assessment Years 2017-18 and 2018-19. 4. The facts of the case is that the petitioner is a pharmaceutical Company engaged in the business of marketing, trading and exporting of pharmaceutical products. The petitioner filed its original return of income on 30.11.2018 declaring loss of Rs. 2248,16,32,703/- and thereafter revised return of income for Assessment Year 2018-19 on 31.03.2019 declaring a loss of Rs.1506,40,88,610/-. The case of the petitioner-company was selected for scrutiny under Computer Assisted Scrutiny Selection (for short "CASS") and notice under Section 143(2) of the Income-tax Act, 1961 came to be issued on 23.09.2019. The case of the petitioner-company was thereafter transferred to the Faceless Assessing Officer on 15.10.2020. Since the reasons....
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....r advocate Mr. Soparkar has submitted that the final assessment order dated 26.03.2025 is illegal, inasmuch as the same has been passed without issuing draft assessment order as prescribed under Section 144C of the IT Act. 5.1 It is submitted that once the Commissioner of Income Tax (for short "CIT") has passed the order dated 24.03.2024 setting aside the original Assessment Order dated 29.10.2021 and the Assessing Officer was directed to pass fresh assessment order de novo. It was incumbent upon the Assessing Officer to issue a draft assessment order as per the provisions of Section 144C (1) of the IT Act. 5.2 Learned senior advocate Mr. Soparkar has also referred to the provisions of sub-section 15 to Section 144C of the IT Act and has submitted that the TPO has admitted that the petitioner is an eligible assessee within the meaning of Clause (b) to sub-section 15 to Section 144C of the IT Act. It is thus submitted that the impugned assessment order becomes vulnerable as it is void ab initio, having being passed without issuing draft assessment order. In support of his submissions learned senior advocate Mr. Soparkar has placed reliance on various decisions of this Court as....
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....e draft order. It is submitted that TPO adjustments were already accepted by the assessee and since no objections were filed by the assessee, no fresh reference is required to be made to the TPO and the Assessing Officer can proceed to pass final order without issuing a draft order under Section 144C of the IT Act. It is submitted that in the proceedings under Section 143(3) read with Section 263 of the IT Act, the issue of transfer pricing was not referred to the TPO by the Faceless Assessing Officer so there was no need to pass draft assessment Order. Finally, it is urged that in case, this Court is inclined to set aside the impugned order, then the matter may be remanded to the Assessing Officer for reassessment. 8. With regard to the case law cited by the learned advocate for the petitioner, learned Senior Standing Counsel Mr. Patel, has submitted that the ratio of the aforesaid judgments would not come to the rescue of the petitioner since they do not deal with the issue which has been raised with the present writ petition, more particularly, in wake of the fact that vide order dated 24.03.2024 passed under Section 263 of the IT Act the CIT, the AO was directed to pass fres....
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....(1). Accordingly, the Assessing Officer issued a draft Assessment Order on 20.09.2021 as mandated by the provisions of Section 144C of the IT Act. The provisions of sub-Section (2) of Section 144C of the IT Act, gives an opportunity to the assessee to file its objections to such variation before (I) the Dispute Resolution Panel, and (II) before the Assessing Officer. 10.3 The petitioner did not choose to file any application before the DRP under Clause (b) of sub-Section 2 of Section 144C of the IT Act. Interestingly, on 18.01.2024, the PCIT in exercise of revisional powers, issued a Notice under Section 263 of the IT Act questioning the assessment order. Subsequently, the petitioner-company filed a detailed response on 12.02.2024 objecting to the proceedings under Section 263 of the IT Act, however, the PCIT passed an order dated 24.03.2024 setting aside the order dated 29.10.2021. The final observations made in the order dated 24.03.2024, has given rise to the issue raised in the present writ petition. 11. The necessary observations of the PCIT vide order dated 24.03.2024, is as under:- "15. In view of the above and in exercise of the powers conferred by the provis....
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....ed 20.09.2021 was passed under Section 144C of the IT Act. Accordingly, when the petitioner-company did not chose to file application with DRP a final Assessment Order was passed on 29.10.2021.Hence, the assessment which got crystalised on 29.10.2021, was resurrected in revisional proceedings under the provisions of Section 263. Thus, the Final Assessment Order dated 29.10.2021, which emerged from the reference made by the TPO and passing of the draft Assessment Order under Section 144C of the IT Act, gets encompassed in the order dated 24.03.2024 passed under the provisions of Section 263 of the IT Act, in view of the specific directions issued by the PCIT, to pass a fresh Assessment Order de novo, while taking into consideration all the issues which already considered earlier with the issues discussed in the said order. 12.2 Thus, in our considered opinion the appropriate course which ought to have been adopted by the Assessing Officer was to fall back to the stage of the order dated 26.07.2021 passed by the TPO suggesting upward adjustment of Rs. 94,88,151/. The draft Assessment Order dated 20.09.2021 culminated into final Assessment Order passed on 29.10.2021, which was subj....
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.... cloud or shadow of doubt on the decisions rendered in the context of Section 144C. 54. That then takes us to evaluate the validity of the submission of the respondents that the Court would be justified in framing a direction remanding the matter to the AO so as to enable it to draw proceedings afresh and from the stage of infraction. The acceptance of that submission, however, hits a serious and perhaps insurmountable roadblock in light of the statutory prescriptions of limitation created by Section 153. Undisputedly, the assessment consequent to remand would be regulated by sub-sections (3) and (4) of Section 153. When read together and bearing in mind the admitted fact of the Tribunal having remitted the matter to the desk of the TPO, the assessment was liable to be concluded within nine months coupled with the additional period of twelve months as provided. Learned counsels for the respondents fairly conceded that the said period is no longer available today and has come to an end by efflux of time. It was in the aforesaid light that Mr. Aggarwal sought to draw sustenance from sub-section (6) of Section 153 to contend that the same would enable the AO to carry out an a....