2024 (3) TMI 316 - HC - Income Tax

Validity of assessment order passed u/s 144C - due to oversight/inadvertence Petitioner did not inform the AO within 30 days period prescribed under Sub-section (2) of Section 144C that it had filed objection by way of an email - AO unaware of Petitioner having filed objection before the DRP after expiry of prescribed period of 30 days proceeded to pass the assessment order - HELD THAT - Since Petitioner had already filed a reference raising its objections to the DRP within the 30 days period and Section 144C(4) of the Act requires the AO to pass a final order including the view expressed by the DRP, we set aside the order of the AO impugned in this petition. We find support for this view in Sulzer Pumps India Pvt. Ltd 2021 (12) TMI 891 - BOMBAY HIGH COURT - We shall also observe that the AO cannot be faulted for passing the impugned order. At the same time, the AO will also have the benefits of considering the views of the DRP while passing a fresh assessment order. AO shall take further steps in the matter after the DRP passes its order on the objection filed by Petitioner, in accordance with law.

Summary

Issues involved:
The impugning of an assessment order under the Income Tax Act due to failure to inform the Assessing Officer about objections filed before the Dispute Resolution Panel within the prescribed time limit.

Issue 1: Failure to inform the Assessing Officer about objections filed before the Dispute Resolution Panel

The Petitioner challenged an assessment order dated 21st November 2023 passed under Section 143(3) read with Section 144C(3) read with 144B of the Income Tax Act, 1961, along with consequential notices of demand and penalty. The Petitioner contended that although Section 144C of the Act required communication of objections filed before the DRP to the AO within 30 days, an oversight led to the Petitioner informing the AO after the prescribed period. The AO, unaware of the objections, proceeded to pass the assessment order. The Petitioner later informed the AO about the objections, leading to the current challenge. The Court acknowledged the Petitioner's timely objection filing with the DRP and set aside the assessment order, citing the requirement for the AO to consider the DRP's views as per Section 144C(4) of the Act. The Court also noted that the AO cannot be faulted for passing the initial order and allowed the AO to consider the DRP's views in issuing a fresh assessment order.

Outcome:
The Court accepted the Petitioner's undertaking to withdraw the appeal filed before the Commissioner of Income Tax (Appeals) challenging the assessment order. The Court made the Rule absolute, issuing a Writ of Certiorari to quash the final assessment order dated 21.11.2023 and remit the matter to the DRP for further consideration. The AO was directed to take further steps in accordance with the law after the DRP's decision on the objections raised by the Petitioner. The petition was disposed of accordingly.