2024 (9) TMI 912 - HC - Income Tax

Validity of assessment order passed u/s 143(3) r.w.s. 144C(3) /144B as barred by limitation - HELD THAT - The snap shot of the ITBA portal dated 16th October 2023 has been annexed to the affidavit in reply. But as regards to petitioner s averment of the petition that draft assessment order was received by petitioner on 23rd September 2023 the affidavit in reply is totally silent. There is not even a denial. To the petition a copy of the E- mail dated 23rd September 2023 is also annexed. If the AO was truthful he would have annexed snap shot of the ITBA portal of 23rd September 2023 to the affidavit in reply but he has chosen not to do so. In fact the AO has not even annexed the order sheet. Therefore we have no hesitation in drawing adverse inference against respondent and observe that respondent is being economical with truth. We will accept petitioner s submission that the draft assessment order was served upon petitioner on 23rd September 2023. The 30 days period provided to file objections u/s 144C(2) would have expired on 22nd October 2023. Since no communication from petitioner having filed the objections with DRP was sent to the AO the last date for passing final assessment order u/s 144C(3)(b) r.w.s.144C(4)(b) of the Act would have expired on 30th November 2023. Therefore the final assessment order dated 27th December 2023 is clearly barred by limitation.

Summary

Issues:
1. Barred by limitation under Section 144C of the Income Tax Act, 1961.

Analysis:
The petitioner filed its original return of income for Assessment Year 2020-21, declaring a total income. The case was selected for scrutiny, and a notice was issued under Section 143(2) of the Act. The Transfer Pricing Officer (TPO) proposed a downward adjustment with regard to reimbursement of GIT cost. A draft assessment order was sent to the petitioner, who did not file any objections within the stipulated time frame. Consequently, the Assessing Officer (A.O.) passed the assessment order under Section 143(3) of the Act. The petitioner contended that the assessment order was barred by limitation, citing provisions of Section 144C of the Act. The petitioner argued that the final assessment order was passed beyond the statutory time limit, relying on a previous judgment by the Bombay High Court.

The affidavit filed by the Respondent stated that the draft order was sent to the assessee at a later date, contradicting the petitioner's claim of receiving it on the initial date. The Court observed that the Respondent's affidavit did not address the specific allegation of the petitioner regarding the receipt date of the draft assessment order. The Court noted the absence of supporting evidence from the Respondent, leading to an adverse inference against them. Ultimately, the Court accepted the petitioner's submission that the draft assessment order was indeed served on the initial date, and the final assessment order was passed beyond the prescribed time limit, thus deeming it barred by limitation under Section 144C of the Act.

In conclusion, the Court allowed the petition, issuing a Writ of Certiorari to quash and set aside the final assessment order, notice of demand, and the show cause notice for penalty. The Court directed the copy of the order to be sent to the Principal Chief Commissioner of Income Tax, thereby disposing of the petition.