2021 (9) TMI 1521 - HC - Income Tax

Validity of Assessment passed u/s 144C as objections before DRP are pending - As argued if the petitioner had informed the first respondent within 30 days period that it intends to file objections before the DRP, first respondent would have awaited the directions of DRP - HELD THAT - Revenue counsel very fairly submits that the period of limitation stood extended owing to the Covid-19 situation and in the light of the typed-set of papers forming part of the case file, it is clear that the petitioner has gone before the DRP. Therefore, the first respondent has to await directions from DRP as the objections of the writ petitioner are pending with DRP. Order - The impugned Assessment Order is set aside solely on the ground that objections before DRP are pending and directions of DRP under 144C(5) has to be awaited under 144C (13).Though obvious it is made clear that this Court has expressed no opinion or view on the merits of the matter. On DRP issuing directions, the first respondent shall proceed with the assessment de novo on its own merits, in accordance with law and complete the exercise as expeditiously as the business of the first respondent would permit.

Summary

Issues:
Challenge to Assessment Order under Section 143 of the Income-tax Act, 1961; Compliance with Section 144C(13) regarding objections before the Dispute Resolution Panel (DRP); Extension of limitation period due to Covid-19 situation.

Analysis:
The judgment concerns a writ petition challenging an Assessment Order dated 15.05.2021 issued under Section 143 of the Income-tax Act, 1961. The main issue revolves around the petitioner's approach to the third respondent, the Dispute Resolution Panel (DRP), as per Section 144C(13) of the Act. The petitioner's objections before the DRP are pending, and the directions of the DRP under Section 144C(5) need to be awaited. The Revenue counsel acknowledged the extended period of limitation due to the Covid-19 situation and confirmed that the petitioner has indeed approached the DRP. Consequently, the first respondent is required to await directions from the DRP since the petitioner's objections are still pending before the panel.

The court set aside the impugned Assessment Order solely on the ground that the objections before the DRP are pending, and the directions of the DRP under Section 144C(5) must be awaited as per Section 144C(13). It was explicitly stated that the court expressed no opinion on the merits of the matter. Upon the DRP issuing directions, the first respondent is directed to proceed with the assessment de novo based on its own merits and in accordance with the law, completing the exercise as expeditiously as possible. The court emphasized that this process should not be influenced by any observations on merits made in the order. The writ petition was disposed of with the provided directives, and the connected Writ Miscellaneous Petitions were closed without any order as to costs.