TaxTMI 
TaxTMI 
2026 (4) TMI 1247
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of functional similarity by excluding companies that are reasonably comparable in terms of primary business functions. It is a well-established principle in transfer pricing that the comparables should reflect similar core business functions, even if there are minor variations or ancillary services. 2. Whether the exclusion of comparables such as Mis CG Vak Software & Exports Limited, M/s ICRA Techno Analytics Limited and M/s Tech Mahindra Limited on the grounds of functional dissimilarity is correct, when on adequately considering the fact that these companies' core operations involve software development services, which is the primary function of the assessee? 3. Whether the CIT(A) is correct in exclusion of companies such as M/s C G Vak Software & Exports Limited, M/s ICRA Techno Analytics Limited and M/s Tech Mahindra Limited based on the fact that they operated in multiple segments. The core activities of these companies, including software development, are highly comparable to the tested entity, and the presence of additional segments should not lead to automatic exclusion. 4. Whether the CIT(A) correct is demanding comparability standards that....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... pricing comparability analysis? 13. Whether the CIT(A) is right in inclusion of the comparables without carrying out necessary enquiry pertaining to functions vis-à-vis tested party. 14. Whether the CIT(A) is right in inclusion of the comparables without carrying out necessary enquiry pertaining to markets it is operating in vis-à-vis tested party. 15. Whether the CIT(A) was right in law in holding that negative working capital adjustment should not be made when wording capital adjustment is computed scientifically as required under Rule 10B of Income Tax Rules 1962. 16. Whether the CIT(A) was right in law in ignoring the parameters of analysis prescribed under Rule 10B of Income Tax Rules 1962 which are exhaustive and if so, whether it is legally permissible to bypass the same partially or by implication. 17. Whether the CIT(A) is justified in taking different stands on adjustments to comparables margins to make them comparable to tested party, just so that assessee benefits both ways and revenue loses both since it goes against the principle of equality and natural justice. 3. At the outset, the ld. DR submitted that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty analysis for the Software Development ('SWD') segment based on application of additional filters. 4. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in not adjudicating on the rejection of comparable companies by the learned TPO on the pretext that the companies have a different financial year ending, thereby resulting in an incorrect comparability. 5. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in not adjudicating on the application of export earning filter of 75% instead of 25% of the total sales by the learned TPO, leading to as narrower set of comparable companies. 6. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in not adjudicating on the inclusion of the following functionally comparable company under the SWD segment: (1) Kals Information Systems Limited, (2) Helios & Matheson Information Technology Limited, (3) Sasken Communication Technologies Limited, (4) CTIL Limited, (5) CAT Technologies Limited, (6) Bells Softech Limited and (7) Sankhya Infotech Limited, thereby, resulting in an incorrect comparabili....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lore (hereinafter referred to as 'Learned Transfer Pricing Officer' or 'Ld. TPO') by the Additional Commissioner of Income-tax, Circle 3(1)(1), Bangalore, (hereinafter referred to as the 'Learned Assessing Officer' or the 'Ld. AO') to determine the Arm's Length Price of the international transactions of the Appellant. 5. The Ld. TPO vide TP order issued under section 92CA of the Act, dated 19 October 2016 proposed a transfer pricing adjustment of INR 4,99,47,693. Subsequently, the Ld. AO passed draft assessment order dated 10 November 2016 (order received by the Appellant on 17 November 2016) under section 143(3) read with section 144C of the Act incorporating the said TP adjustment. 6. The Cross Objector upon receipt of the draft assessment order, filed a letter with the Ld. AO dated 6 April 2016 stating that it does not intend to file objections before the Dispute Resolution Panel and thereby, requested the Ld. AO to pass final assessment order. The Ld. AO accordingly, passed the Final Assessment Order on 14 December 2016 which was received by the Appellant on 20 December 2016 incorporating the TP adjustment of INR 4,99,47,693....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ially the Cross Objector was of the view that Cross Objections, if any needs to be filed within 2 months from the end of the month in which it has received the appeal, whereas, Cross Objections should have been filed within 30 days. As such, the delay in filing Cross Objections is not due to any malafide intention on the part of the Cross Objector and the Cross Objector should not be penalized for this oversight. 16. We also wish to submit that section 253(5) of the Act grants powers to Your Honours to admit appeals even after the expiration of the prescribed period if Your Honours is satisfied that the Appellant had "sufficient cause" for not presenting the appeal within that period. Accordingly, we request Your Honours to condone the delay in filing of the subject appeal petition as there was, sufficient cause for not presenting the appeal on time. 17. The Hon'ble Supreme Court in the case of Mool Chandra vs UOI (Civil Appeal Nos. 8435 - 8436 OF 2024 - S. L. P. (CIVIL) Nos. 2733-2734 of 2024)) have held that it is not the length of delay that would be required to be considered while examining the plea for condonation of delay, it is the cause for delay which....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to delay. In fact, he runs a serious risk. * It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 20. Further, in support of our submission, we also wish to place reliance on the merits of the Hon'ble Supreme Court Decision in the case of N.Balakrishnan vs. M.Krishnamurthy [1998] 7 SCC 123 wherein the Apex Court explained the scope of limitation and condonation of delay, observing as under: "The primary function of a Court is to adjudicate the dispute between the parties and to advance substantial justice. The time-limit fixed for approaching the Court in different situations is not because on the expiry of such time a bad cause would transform into a good cause. Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy for the redress of the legal injury so suffered. The law of limitation is thus founded on public policy." 21. The Hon'ble Supreme Court in the case of Improvement Trust vs. Ujagar ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... delay should receive a liberal construction so as to advance substantial justice. 24. The Hon'ble Mumbai ITAT in the case of Angela J. Kazi v. Income Tax Officer [2006] 10 SOT 139 (Mumbai ITAT), condoned delay of 7 years and 192 days as explanation of assessee did not smack mala fide or was not put forth as a dilatory strategy. Prayer In view of the above factual and legal petition, it is humbly submitted that a liberal approach be adopted by Your Honours as laid down by the Hon'ble Supreme Court in the citations referred above, in exercising the powers conferred on Your Honours under section 253(5) of the IT Act. The expression "sufficient cause" used in Section 253(5) of the IT Act, is adequately elastic to enable Your Honours to allow the appeal to be contested on merits rather than to dispose it on mere technicalities more so in a case where there was no malafide intention on the part of the Appellant to cause the delay, as explained above. Accordingly, in the interest of natural justice, the Appellant requests Your Honours to kindly condone the delay in filing of cross objections and oblige. Thank you. Yours faithfully, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g necessary adjustments in accordance with the provisions of the Act. * The Deputy Commissioner of Income Tax, Transfer Pricing - 1(1)(2) ('Ld. TPO') proceeded to issue TP order dated October 19, 2016 making an adjustment of INR 4,99,47,693 to the transfer price. * Subsequently, the Income-tax Officer, Ward 2(1)(2), Bangalore ('Ld. AO') issued the draft assessment order dated November 10, 2016 upholding the adjustment made by the Ld. TPO to the income reported by the Cross-objector. * After receipt of the draft assessment order, the Cross-objector filed a letter with the Ld. AO informing that, it would prefer to file an appeal against the final assessment order with the learned Commissioner of Income-tax (Appeals) ('CIT(A)'). * Subsequently, the Ld. AO passed the final assessment order, dated December 14, 2016 under section 143(3) read with section 144C of the Act making an adjustment of INR 4,99,47,693 to the returned income. * The Cross-objector wishes to bring Your Honours attention to the draft assessment order dated November 10, 2016 was accompanied with a notice of demand under section 156 of the Act dated N....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee and against the Revenue. o The Hon'ble Telangana High Court in the case of PCIT vs. Hyundai Motor India Engineering [2023] 156 taxmann.com 265 (Telangana) have held that where draft assessment order passed under section 144C(3) was accompanied by a notice of demand and penalty order under section 271(1)(c), same would make it final assessment order even though it was termed as draft assessment order. Relevant extract of the decision is as below: 14. In the given context, if the draft assessment order is accompanied by a notice of demand and penalty that itself would force one to reach to the conclusion that though it is termed as draft assessment order, in fact, it is the final assessment order and the notice of demand and penalty was accompanying the same. To further weaken the case of the appellant, the operative part of the draft assessment order reads as under: "The assessment is completed under section 143(3) r.w.s. 92CA of the Income-tax Act, 1961. Credit for prepaid taxes is given. Penalty proceedings u/s 271AA & 271BA are being initiated separately. A copy of the assessment order along with demand notice is issued to the assessee". ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and initiating penalty proceedings vide draft assessment order dated November 10, 2016 erred in not following the procedure set-out in section 144C of the Act, thereby rendering the assessment proceedings as null and void and liable to quashed. We crave leave of your Honor's to rely upon the following decisions in support of our plea for admission and adjudication of the enclosed additional ground of appeal. * CIT vs. S. Nelliappan [66 ITR 722 (SC)] In this case, the Hon'ble Apex Court held as under: "In hearing an appeal the Tribunal may give leave to the assessee to urge grounds not set forth in the memorandum of appeal, and in deciding the appeal the Tribunal is not restricted to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal." * CIT Vs. Kanpur Coal Syndicate [53 ITR 225 (SC)] In this decision, a three member bench of the Hon'ble Apex Court while discussing the scope of section 31(3)(a) of the Indian Income-tax Act, 1922, which is almost identical to section 251(1)(a) of the Act, observed as under: "The Appellate Assistant Commissioner has, therefore, plenary powers in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Appellate Assistant Commissioner, so long as these grounds are in respect of the subject-matter of the entire tax proceedings." (Emphasis supplied) * New India Industries Limited [207 ITR 1010 (Guj.)] The decision of the Hon'ble Apex Court in the case of Jute Corporation of India Ltd. (supra) was followed by the Hon'ble Gujarat High Court. In doing so, the Court observed as under: "The power of the Appellate Assistant Commissioner is coterminous with that of the Income-tax Officer and there is no reason why the appellate authority cannot modify the assessment order on an additional ground even if it is not raised before the Income-tax Officer. No exception could be taken to this view as the Income-tax Act does not place any restriction or limitation on the exercise of the appellate power. Even otherwise, an appellate authority, while hearing the appeal against the order of a subordinate authority, has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitation, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....function of the appellate authority in that appeal is to set right the assessment and adjust the taxpayer's liability in accordance with the statutory provisions. In the appeal, as in the assessment, the task is one of adjustment of the taxpayer's liability. The function of a tax appeal is thus precisely the same as that of a tax assessment. A taxpayer who carries the assessment in appeal is not to be regarded as being engaged in a lis with the taxing department. He is only interested in ensuring that he is not burdened with payment of an amount, which is more than what is due from him as tax. In this sense, an appeal is merely a reconsideration of the assessment by a higher authority. Such an appeal is not to be regarded as a forensic controversy between two parties ranged on opposite sides as adversaries. It must always be common ground between an assessee and the assessing officer that the assessment must be in accordance with the statute". * Inaroo Ltd. vs. CIT [204 ITR 312 (Bom)] Following its decision in case of Ahmedabad Electricity Co. Ltd. (supra) the Hon'ble Mumbai High Court in the aforesaid case has held that the Tribunal has jurisdiction t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fully, for CSG System International (India) Private Limited sd/- Director Suresh Kumar Place: Bengaluru Date: 10-12-2025 9. We have heard the rival submissions on admission of additional grounds. The Lucknow bench of the Hon'ble Allahabad High Court in the case of CIT Vs. Sahara India (2012) 347 ITR 331 held that a legal issue can be raised at any stage but there shall be good reason for admitting the additional ground. In our considered opinion all the facts are already on record and there is no necessity of investigation of any fresh facts for the purpose of the adjudication of above ground. Further we are also of the opinion that the additional ground raised in the present case are purely legal in nature & goes to the root of the matter & therefore these are critical for a fair adjudication. The Hon'ble Madras High Court in the case of CIT Vs Indian Bank (2015) 230 Taxman 635 (Madras) held that Rule 11 of the I.T. Rules makes it clear that the assessee has the right to raise additional ground and if the same is beneficial to the assessee, the same should be considered by the Tribunal. 9.1 Further, the Hon'bl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....final assessment order. The ld. A.R. of the assessee vehemently submitted that since the provisions of section 144C of the Act have not been followed by the AO, the final assessment order passed on 14.12.2016 is liable to be quashed. The ld. A.R. of the assessee also relied upon the following judgements in support of its claim- Ground No. 9 - Procedure laid down in section 144C not followed 1 CIT vs. Cisco Systems Service B.V. [2023] 149 taxmann.com 486 (Karnataka High Court) - Page No.4 &5 (Para 13,14, 21, 22 & 23) 1 5 2 PCIT vs. Hyundai Motor India Engineering [2023] 156 taxmann.com 265 (Telangana High Court) - Page No. 10 & 12 (Para 14 & Para 18) 6 13 3 GE Oil & Gas India P. Ltd. vs. ACIT [2021] 126 taxmann.com 275 (Madras High Court) - Page No. 15 & 16 (Para 6 & Para 8) 14 16 4 Zuari Cement vs. ACIT, WP(C) No. 5557 of 2012- 21.02.2013 (Andhra Pradesh High Court) - Page No. 24 & 25 17 27 5 Vijay Television Pvt. Ltd. vs. Dispute Resolution Panel, Chennai, (369 ITR 113) (Madras High Court) - Page No. 38 & 39 (Para 33) 28 39 6 Panasonic Life Solutions India (P.) Ltd. vs. ACIT [2023] 157 taxmann.com 534 (Mumbai - T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for scrutiny and accordingly notices u/s 143(2) as well as 142(1) of the Act were issued calling for details. The accounts of the assessee company and other information furnished by the assessee through the authorized representative were verified by the AO. 14.1 During the course of the assessment proceedings, the AO observed that during the FY 2012-13 relevant for the AY 2013-14, the assessee company had international transactions with its associated enterprises and therefore, with the prior approval of the Pr. CIT, Bengaluru-1 a reference was made to the TPO to determine the Arms' length price as per provisions of section 92CA of the Act. The ld. DCIT, Transfer Pricing-1(1)(2), Bengaluru vide order passed u/s 92CA of the Act dated 19/10/2016 computed Rs. 4,99,47,693/- as transfer pricing adjustment in respect of software development segment. Subsequently, incorporating the above adjustments, a draft assessment order was passed on 10/11/2016 allegedly passed u/s 143(3) r.w.s. 144C(1) of the Act. Undisputedly, while passing the draft assessment order, the AO had computed the taxable income and determined the total tax payable by the assessee. Further, the AO while issuing th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lty proceeding under Section 271(1)(c) of the Act. Both the draft assessment order and the demand notice are dated December 28, 2018. 14. Argument canvassed by the Revenue is, though demand notice has been issued, assessee had understood the order dated December 28, 2018 as a draft assessment order and filed its objections before the DRP. The defect if any is a curable one. On the other hand, Shri. Nageshwar Rao's argument is that the ACIT had completed the assessment at the stage of passing the draft assessment order and issued the demand notice. Thus, the re-assessment proceeding was complete. This procedure followed by ACIT is contrary to law laid down in Vijay Television Case and other authorities. 15. section 144C lays down a detailed procedure. Under section 144C(1), the AO [Assessing Officer] is required to forward a draft of the proposed order of assessment to the assessee. Assessee may file its acceptance or objection before the DRP and the AO. If assessee intimates its acceptance or no objections are received within 30 days, the AO shall complete the assessment. Where the DRP receives any objection from the assessee, it shall issue necessary directio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that assessment is one integrated process involving not only the assessment of total income but also determination of the tax. In this case at the stage of passing the draft order, the ACIT had assessed the tax, passed a final order and also issued a demand notice. 21. Mr. Aravind also contended that the demand notice was not enforced. It is settled that demand notice stems out of an order of assessment and it is enforceable. It meets the assessee with civil consequences. The argument on behalf of the Revenue that the demand notice was not enforced is fallacious and noted only to be rejected. 22. We have carefully considered Section 292B of the Act. The mistake which the ACIT has done in passing the final order at the stage of draft order is not curable under Section 292B of the Act. 23. We have considered the appeals both on delay and merits. In the light of discussion made hereinabove, these appeals are devoid of merit and they are accordingly, dismissed. The questions of law are answered in favour of the Assessee and against the Revenue." 14.2 We also relied on the judgement of Hon'ble High Court of Madras in the case of Vijay Television (P.) L....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on only to entertain such an appeal if the order passed by the second respondent is a pre-assessment order. Therefore, it is evident that the first respondent declined to entertain the objections raised by the petitioner company on the ground that the order passed by the second respondent is not a draft assessment order, rather it is a final order. Thus, the first respondent had treated the order dated 26.03.2013 of the second respondent as a final order and therefore it refused to entertain the objections filed on behalf of the petitioner company. 22. As mentioned supra, as per Section 144C(1) of the Act, the second respondent-assessing officer has no right to pass a final order pursuant to the recommendations made by the TPO. In fact, the second respondent-assessing officer himself has admitted by virtue of the corrigendum dated 15.04.2013, that the order dated 26.03.2013 is only a final order and it was directed to be treated as a draft assessment order. In this context, it is worthwhile to refer to the decision of the Honourable Supreme Court in the decision Deepak Agro Foods (supra) wherein in Para No.10, the Honourable Supreme Court discussed as to when an order coul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....5. In the decision rendered by the Honourable Supreme Court of India in the case of (L. Hazari Mal Kuthiala (supra), which was relied on by the learned standing counsel for the respondents, it was held that the mistake or defect on the part of the Commissioner to consult the Central Board of Revenue did not render his order invalid since the provision about consultation in terms of Section 5(3) of Patiala Act was merely directory and not mandatory. In the present case, the procedure that was required to be followed by the second respondent to pass a draft assessment order is mandatory and it is prescribed by the statute. Therefore, this decision relied on by the learned standing counsel for the respondents cannot be made applicable to this case. 26. The learned senior counsel for the petitioners relied on the decision of the Allahabad High Court in the case of Shital Prasad Kharag Prasad (supra) wherein the Division Bench of the Allahabd High Court held that a notice contemplated under Section 148 of the Income Tax Act is a jurisdictional notice and it is not curable by issuing a notice under Section 292B of the Act, if it was not served in accordance with the provisions o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....), which was relied on by the learned senior counsel for the petitioners, it was held as follows :- "Under Section 158BC of the Act empowers the assessing officer to determine the undisclosed income of the block period in the manner laid down in Section 158BB and 'the provisions of Section 142, subsections (2) and (3) of Section 143, Section 144 and Section 145 shall, so far as may be apply. This indicates that this clause enables the Assessing Officer, after the return is filed, to complete the assessment under Section 143(2) by following the procedure like issue of notice under Section 143(2)/142. This does not provide accepting the return as provided under Section 143(1)(a). The Officer has to complete the assessment order under Section 143(3) only. If an assessment is to be completed under Section 143(3) read with Section 158BC, notice under Section 143(2) should be issued within one year from the date of filing of the block return. Omission on the part of the assessing officer to issue notice under Section 143(2) cannot be a procedural irregularity and is not curable." 30. It is evident from the above decision of the Division Bench of this Court that wher....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 144C referring to the cut off date of 01.10.2009 indicates an intention of the legislature to make it applicable, if there is a proposal by the Assessing Officer to make a variation in the income or loss returned by the assessee which is prejudicial to the assessee, after 01.10.2009. Therefore, this particular provision introduced by Finance (No.2) Act, 2009, would apply if the above condition is satisfied and other provisions, in which similar contrary intention is not indicated, which were introduced by the said enactment, would apply from 01.04.2009 i.e., from the assessment year 2010-2011. It is not disputed that the memorandum explaining the Finance Bill and the Notes and clauses accompanying the Finance Bill which preceded the Finance (No.2) Act, 2009 clearly indicated that the amendments relating to S.144C would take effect from 01.10.2009. In our view, the circular No.5/2010 issued byt he CBDT stating that S.144C(1) would apply only from the assessment year 2010-2011 and subsequent years and not for the assessment year 2008-09 is contrary to the express language in S.144C(1) and the said view of the Revenue is unacceptable. The circular may represent only the u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te. In any event, such an order dated 26.03.2013 passed by the second respondent can only be construed as a final order passed in violation of the statutory provisions of the Act. The corrigendum dated 15.04.2013 is also beyond the period prescribed for limitation. Such a defect or failure on the part of the second respondent to adhere to the statutory provisions is not a curable defect by virtue of the corrigendum dated 15.04.2013. By issuing the corrigendum, the respondents cannot be allowed to develop their own case. Therefore, following the order passed by the Division Bench of the Andhra Pradesh High Court, which was also affirmed by the Honourable Supreme Court by dismissing the Special Leave Petition filed thereof, on 27.09.2013, the orders, which are impugned in these writ petitions are liable to be set aside. 34. Accordingly, the orders, which are impugned in these writ petitions are set aside and both the writ petitions are allowed. No costs. Consequently, connected miscellaneous petitions are closed." 14.3 Lastly, we also relied upon the judgement of Hon'ble High Court of Telangana in the case of PCIT Vs. Hyundai Motor India Engineering (P) Ltd. reported ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y other authority; (e) records relating to the draft order; (f) evidence collected by, or caused to be collected by, it; and (g) result of any enquiry made by, or caused to be made by, it. (7) The Dispute Resolution Panel may, before issuing any directions referred to in sub-section (5),- (a) make such further enquiry, as it thinks fit; or (b) cause any further enquiry to be made by any income-tax authority and report the result of the same to it. (8) The Dispute Resolution Panel may confirm, reduce or enhance the variations proposed in the draft order so, however, that it shall not set aside any proposed variation or issue any direction under sub-section (5) for further enquiry and passing of the assessment order. (9) If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be decided according to the opinion of the majority of the members. (10) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer. (11) No direction under sub-section (5) shall be issued unless an opportunity of being heard is given to the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rder reads as under: "The assessment is completed under section 143(3) r.w.s. 92CA of the Income-tax Act, 1961. Credit for prepaid taxes is given. Penalty proceedings u/s 271AA & 271BA are being initiated separately. A copy of the assessment order along with demand notice is issued to the assessee". A perusal of the aforesaid operative part of the so called draft assessment order would further establish that it was not a draft assessment order, but was a final assessment order after the assessment was concluded. The operative part also clearly mentioned about the raising notice of demand under Section 271AA and Section 271BA of the Act. 15. The High Court of Judicature at Andhra Pradesh in the case of M/s.Zuari Cement Ltd. vs. The Assistant Commissioner of Income Tax has held as under: "As this has occurred after 01.10.2009, the cut off date prescribed in sub-section (1) of S.144C, the Assessing Officer is mandated to first pass a draft assessment order, communicate it to the assessee, hear his objections and then complete assessment. Admittedly this has not been done and the respondent has passed a final assessment order dt.23.12.2011 straight a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... an by the order dated 15.04.2013, the second respondent granted thirty days time to enable the assessee to file their objections. On receipt of the corrigendum dated 15.04.2013, the petitioner company approached the first respondent, but the first respondent declined to issue any direction to the assessment officer on the ground that the first respondent has got jurisdiction only to entertain such an appeal if the order passed by the second respondent is a pre- assessment order. Therefore, it is evident that the first respondent declined to entertain the objections raised by the petitioner company on the ground that the order passed by the second respondent is not a draft assessment order, rather it is a final order. Thus, the first respondent had treated the order dated 26.03.2013 of the second respondent as a final order and therefore refused to entertain the objections filed on behalf of the petitioner company". The said decision has been further affirmed by the Division Bench of the Madras High Court in the case of the Assistant Commissioner of Income-tax, Media Circle-11, Chennai v. Vijay Television (P.) Ltd. [2018] 95 taxmann.com 101 (Madras) wherein, the Division B....
X X X X Extracts X X X X
X X X X Extracts X X X X
....13 to 16 it was held as under: "Undisputed facts of the case are, in the draft assessment order, the ACIT has ordered issuance of demand notice and to initiate penalty proceeding under Section 271(1)(c) of the Act. Both the draft assessment order and the demand notice are dated December 28, 2018. Argument canvassed by the Revenue is, though demand notice has been issued, assessee had understood the order dated December 28, 2018 as a draft assessment order and filed its objections before the DRP. The defect if any is a curable one. On the other hand, Shri. Nageshwar Rao's argument is that the ACIT had completed the assessment at the stage of passing the draft assessment order and issued the demand notice. Thus, the re-assessment proceeding was complete. This procedure followed by ACIT is contrary to law laid down in Vijay Television (P.) Ltd. case (supra) and other authorities. Section 144C lays down a detailed procedure. Under Section 144C(1), the AO is required to forward a draft of the proposed order of assessment to the assessee. Assessee may filed its acceptance or objection before the DRP and the AO. If assessee intimates its acceptance or no objections are r....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the procedure contemplated by Section 144C". 18. Given the aforesaid legal position as it stands, as is required under Section 144C of the Act and also taking note of the contents of the operative part of the so called assessment order, in the considered opinion of this Bench leads to the only conclusion of the order being a final assessment order, more particularly, when the authority concerned has also ordered and directed for initiation of penalty proceedings simultaneously along with the draft assessment order. Hence, this Bench has no hesitation in reaching to the conclusion that the findings arrived at by the Tribunal while allowing the appeal of the respondent/assessee was proper, legal and justified. That the present appeal thus being devoid of merits, deserves to be and is accordingly, rejected. There shall be no order as to costs." 14.4 Respectfully following the above judgement of the Hon'ble jurisdictional High Court of Karnataka as well as other Hon'ble High Courts, we are of the firm opinion that section 144C(1) of the Act is a non-obstante provision, which requires its compliance irrespective of other provisions that may be contained in the Act. There is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....x Act, 1961, the second appeal before Hon'ble ITAT should have been filed on or before 31.03.2025. However, the same was not filed within stipulated time period. 4 Thus, there is a delay of 88 days while filing of second appeal before Hon'ble ITAT against the order of CIT(A) in the case of above mentioned assessee. 5. The delay for filing of second appeal was on account of unintentional and unavoidable reason and in lieu of assessment proceedings getting time barred on 31.03.2025 and reopening proceedings getting time barred on 30.06.2025, the appeal before the Hon'ble ITAT could not have been filed on time. 6. The delay of 65 days is inadvertent and there is no malafide intention on the Office of the undersigned in respect of the delay in filing of the appeal before the Hon'ble ITAT. 7. Thus, it is requested that the delay in filing of second appeal before Hon'ble ITAT may kindly be condoned and the application be considered on the merits of the case. wordta/ Yours faithfully. (PARTHA BIKASH DEB) Assistant Commissioner of Income-tax affa 2(2)(1), draft/ Circle 2(2)(1), Bangalore. Copy to: - The Pr. Commissioner of Income tax, Bengaluru-2, Bengaluru. 1. ....