2023 (3) TMI 1227 - AT - Income Tax

Faceless assessment u/s 144C - Reference to dispute resolution panel - period of limitation - HELD THAT - Alas, the final order passed by the Assessing Officer is beyond the period of limitation as provided u/s. 144C of the Income Tax Act, 1961 and hence, the same is liable to be declared as null and void.

Summary

Issues Involved:
The judgment involves the issue of assessment order passed by the Assessing Officer beyond the period of limitation as provided u/s 144C of the Income Tax Act, 1961.

Assessment Order Beyond Limitation Period:
The present appeal was filed by the assessee against the order dated 30.01.2022 passed by the National Faceless Assessment Centre, Delhi u/s. 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961. The assessee, engaged in providing digital enablement platforms, had the following timeline: Date of filing return - 30.11.2017, Date of order of the TPO - 28.01.2021, Date of draft order by the AO - 24.03.2021, Date of order of the DRP - 16.11.2021, and Date of Assessment Order - 30.01.2022. The Assessing Officer passed the final order beyond the period of limitation as provided u/s. 144C of the Income Tax Act, 1961, rendering it null and void. Consequently, the appeal of the assessee was allowed, highlighting the importance of adhering to statutory timelines in assessment proceedings.

Legal Provisions - Section 144C:
The judgment referenced Section 144C of the Income Tax Act, which outlines the procedure for reference to the Dispute Resolution Panel. The section mandates the Assessing Officer to forward a draft of the proposed assessment order to the eligible assessee in case of any variation in income or loss prejudicial to the assessee's interest. The eligible assessee has the option to accept the variations or file objections with the Dispute Resolution Panel and the Assessing Officer. The Dispute Resolution Panel is empowered to issue directions for the guidance of the Assessing Officer based on various considerations, and its directions are binding on the Assessing Officer. The section also sets a time limit for issuing directions and completing assessments, emphasizing procedural compliance and the role of the Dispute Resolution Panel in assessment proceedings.

Conclusion:
The judgment underscores the significance of adhering to statutory timelines and procedural requirements in assessment proceedings, as evidenced by the nullification of the final order passed by the Assessing Officer beyond the limitation period specified u/s. 144C of the Income Tax Act, 1961. The decision to allow the appeal of the assessee serves as a reminder of the importance of procedural compliance and adherence to legal provisions in tax assessments.