2021 (10) TMI 1275 - HC - Income Tax

Assessment u/s 144C - period of expiry to file objections before DRP - case of the petitioner that in view of the circular of the Central Board of Direct Tax (CBDT) dated 25th June, 2021 the last date of filing such objections under that section was extended till 31st August, 2021 and it is the case of the petitioner that without allowing the aforesaid period of expiry as per the circular of the CBDT the respondent Assessing Officer should not have passed the impugned assessment order - HELD THAT - Respondents is not in a position to defend and justify the action of the respondents of passing the impugned assessment order in disregard to the aforesaid circular of the CBDT and also the action of the respondent Assessing Officer concerned in passing the impugned assessment order without getting any instruction from the DRP within the time stipulated under the statute. Considering the submission of the parties, this writ petition is disposed of by setting aside the impugned assessment order dated 30th July, 2021 and all subsequent actions or steps on the basis of such assessment. The respondent Assessing Officer shall proceed with the relevant assessment proceeding in question after getting the direction from the DRP in accordance with law.

Summary

Issues:
Challenge to assessment order under Income Tax Act for AY 2017-2018 on grounds of arbitrariness and illegality.

Analysis:
The petitioner challenged the assessment order dated 30th July, 2021 under Section 143(3) read with Section 144C(3), 144B of the Income Tax Act for Assessment Year 2017-2018, alleging arbitrariness and wrongful exercise of jurisdiction. The petitioner received a Draft Assessment Order under Section 144C against which objections were filed before the Dispute Resolution Panel (DRP) within the stipulated time. However, the petitioner claimed that due to a circular by the Central Board of Direct Tax (CBDT) extending the deadline for filing objections, the assessment order should not have been passed without allowing the extended period. The petitioner argued that the Assessing Officer should have awaited directions from the DRP, as mandated by law and the CBDT circular. The petitioner relied on judgments of the Hon’ble Delhi High Court to support their contentions.

The respondent, through their advocate, failed to defend the actions of passing the assessment order disregarding the CBDT circular and without waiting for directions from the DRP within the statutory timeline. In light of the submissions, the High Court disposed of the writ petition by setting aside the impugned assessment order dated 30th July, 2021, along with any subsequent actions based on it. The court directed the Assessing Officer to proceed with the relevant assessment proceedings after obtaining directions from the DRP as per the law. The writ petition was thus disposed of, providing relief to the petitioner and ensuring compliance with the statutory provisions and circulars issued by the CBDT.