2023 (7) TMI 1282 - HC - Income Tax

Assessment u/s 144C(1) r.w.s. 92C(a) - Validity of Order u/s 254 in the context of Section 92C(a) - case of the petitioner is that after an order was passed u/s 254 in the context of Section 92C(a) first respondent ought to have passed an Assessment Order, before the expiry of nine months from the end of the financial year - HELD THAT - This writ petition is opposed by the Standing Counsel for the respondents stating there is no clarity as to whether the amount that has been demanded for the AY 2013-2014 is inclusive of the amount that was added in the Assessment Order dated 09.12.2016, which has been set aside by the Appellate Tribunal. The demand that has been made prima facie appears to be contrary to the order passed by the Appellate Tribunal. Be that as it may, this is a fit case for giving a Mandamus to the respondents to consider and pass appropriate orders on the representation dated 08.06.2023 of the petitioner. Petitioner's representation shall be disposed by the first respondent within a period of six weeks from the date of receipt of a copy of this order. The giving effect to order shall be passed by the second respondent within a period of twelve weeks from the date of receipt of a copy of this order. The first respondent shall pass appropriate assessment order within a period of four weeks thereafter. This order shall be communicated to the third respondent and the third respondent. Adjustment of the amounts due in respect of the Assessment Year 2013-2014 shall be only after appropriate orders are passed by the second respondent and by the first respondent in terms of the timelines stipulated as above.

Summary

Issues involved: Challenge to Draft Assessment Order under Income Tax Act, Transfer Pricing Adjustment, Disallowance of Research and Development expenses, Timely passing of Assessment Order after Tribunal's decision, Clarity on demanded amount post-Appellate Tribunal decision.

The petitioner challenged the Draft Assessment Order under the Income Tax Act, which included Transfer Pricing Adjustment and disallowance of Research and Development expenses. The Appellate Tribunal allowed the appeal regarding Transfer Pricing Adjustment but remitted the disallowance of research and development expenses back to the first respondent for further consideration.

After the Appellate Tribunal's decision, the first respondent's office demanded outstanding amounts for multiple assessment years. The petitioner, dissatisfied with the demand, filed a writ petition seeking a Mandamus for timely assessment order issuance post-Tribunal decision.

The petitioner argued that the first respondent failed to pass a fresh Assessment Order within the required timeframe after the Tribunal's decision. The petitioner emphasized the need for the second respondent to give effect to the Tribunal's order before the first respondent issues a new Assessment Order.

The respondents opposed the writ petition, questioning the clarity of the demanded amount vis-a-vis the Tribunal's decision. Despite this, the court deemed it appropriate to issue a Mandamus for the respondents to consider and pass orders on the petitioner's representation.

The court directed the first respondent to dispose of the petitioner's representation within six weeks and the second respondent to give effect to the Tribunal's order within twelve weeks. Subsequently, the first respondent was instructed to pass an appropriate assessment order within four weeks.

The order was to be communicated to the concerned parties, and adjustment of due amounts for the Assessment Year 2013-2014 was to occur only after the requisite orders were passed within the stipulated timelines.

The Writ Petition was disposed of with the specified directions, without any costs, and the connected Writ Miscellaneous Petition was closed accordingly.