2018 (9) TMI 1321 - HC - Income Tax

Scrutiny assessment - notice u/s 143(2) was issued to the petitioner - Held that - With regard to status of the order of assessment dated 21.01.2016. It is for the petitioner to approach the Tribunal once again, by challenging the present impugned order, by raising all these contentions, so that the Tribunal will be in a position to clarify the effect of the earlier order passed, while considering the appeal to be filed against the present impugned order. Any such clarification by the Tribunal, with regard to the status of the assessment order dated 21.01.2016, would certainly have a bearing on further proceedings including the present impugned order. Since this Court finds that it is for the Tribunal to clarify the above position, without expressing any view on the merits of the contention raised by both parties in respect of the status of the assessment order passed on 21.01.2016, these writ petitions are disposed of, by granting liberty to the petitioner to file a statutory appeal against the impugned order dated 31.12.2017 before the Income Tax Appellate Tribunal, within a period of four weeks from the date of receipt of a copy of this order. If any such appeal is filed, the Tribunal shall consider the same and pass orders on its own merits and in accordance with law, uninfluenced by any of the observations made in these writ petitions and also without reference to the period of limitation.

Summary

Issues:
Challenging assessment order under Section 144C(13) of the Income Tax Act, 1961.

Analysis:
The petitioner, a company engaged in manufacturing, filed a return for the assessment year 2011-2012. The Transfer Pricing Officer determined the arm's length price, leading to a draft assessment order in 2015. The Dispute Resolution Panel issued directions in 2015, and the final assessment was made in 2016 at ?1,85,13,549. The Tribunal remitted the issues back to the Panel in 2016. Fresh directions were issued in 2017, resulting in a revised assessed income of ?1,79,49,484. The petitioner challenged this order, claiming the original assessment order was set aside by the Tribunal, rendering the subsequent proceedings invalid.

The respondent argued that the Tribunal did not set aside the original assessment order but remitted issues for clarification. The dispute centered on the status of the 2016 assessment order. The High Court observed the Tribunal's order remitting issues and partly allowing the appeal for statistical purposes. It suggested the petitioner approach the Tribunal again to clarify the effect of the earlier order while challenging the present impugned order. The Court refrained from expressing a view on the assessment order's status, granting the petitioner liberty to file a statutory appeal within four weeks before the Income Tax Appellate Tribunal. The Tribunal was directed to consider the appeal on its merits and in accordance with the law, without considering the observations made in the writ petitions or the period of limitation. No costs were awarded, and the connected miscellaneous petition was closed.

This judgment highlights the importance of clarity regarding the status of assessment orders and the need for parties to seek appropriate forums for redressal. The Court's decision to grant liberty for a statutory appeal underscores the significance of proper legal recourse in tax matters to ensure fair and just outcomes.