TaxTMI 
TaxTMI 
2026 (2) TMI 772
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....DRP; and (b) the objections filed by the Petitioner are taken as non-est for failing to adhere to the requirements of clause (b) of Section 144C(2) of the Income Tax Act, 1961 ("the I.T. Act"). 2. Mr. Gandhi, the learned counsel appearing on behalf of the Petitioner, submitted that in the facts of the present case, the Order was passed by the Transfer Pricing Officer (TPO) under Section 92(CA)(3) of the Income Tax Act proposing and / or recommending certain adjustments to the income of the Petitioner. Pursuant to the recommendation of the TPO, Respondent No. 1 (NFAC) on 14th September 2023 passed a draft assessment order under Section 144C(1) of the I.T. Act and served the same on the Petitioner. As per the provisions of Section 144C(2),....
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....e simplicitor not entertained the objections by holding that it had become functus officio [because the final assessment order was already passed]. The DRP could not have given any directions or a finding that the Petitioner had not intimated the Assessing Officer about the objections being filed before the DRP. He submitted that once the final assessment order is passed under Section 144C(4), the DRP becomes functus officio and thereafter, cannot pass any directions or give any findings. In this regard, Mr. Gandhi relied upon the decision of this Court in the case of Undercarriage and Tractor Parts Pvt. Ltd. vs. Dispute Resolution Panel - 3 and Ors. [Writ Petition No. 2387 of 2020 decided on 12th September 2023]. 5. Accordingly, Mr. Gan....
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....d. It is not in dispute that initially, after the order was passed by the TPO, Respondent No. 1 passed a draft assessment order under Section 144C(1) of the I.T. Act. To this draft order, the Petitioner filed its objections before Respondent No. 2. The Petitioner also addressed an email to Respondent No. 2 as well as Respondent No.3 (JAO) intimating them that objections have been filed before the DRP to the Draft Assessment Order. After this, the final assessment order was passed by Respondent No. 1 on 26th October 2023. From this final assessment order, an Appeal is also filed by the Petitioner before the CIT (Appeals), and which is pending. 8. In these facts, we are clearly of the view that once a final assessment order was passed, eve....
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.... 144C of the I.T. Act. The relevant portion of this decision reads thus: "10 Section 144C(5) of the Act provides "the DRP shall, in a case where any objection is received under sub-section 2, issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment". Therefore, it is quite obvious, when it says "..... to enable him to complete the assessment", it presupposes pending assessment proceedings. Sub-section 6 of Section 144C of the Act provides "the DRP shall issue the directions referred to in sub-section 5, after considering the following .....". The directions referred to in subsection 5 are those directions for the guidance of the Assessing Officer to enable ....
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....y in pending assessment proceedings. Once assessment order is passed, rightly or wrongly, the assessment proceedings come to an end. Therefore, the DRP would have no power to pass any directions contemplated under sub-section 5 of Section 144C of the Act. Act." 9. The SLP against this Order is also dismissed by the Hon'ble Supreme Court on 2nd May 2025. 10. After analyzing the provisions of Section 144C as well as the law laid down by this Court in Undercarriage and Tractor Parts Pvt.Ltd. (Supra), we are of the view that the DRP ought to have simplicitor dismissed the objections of the Petitioner on the sole ground that a final assessment order has already been passed and ought not to have given any finding in relation to any matters ....