2024 (2) TMI 754 - HC - Income Tax

Validity of final assessment order u/s 144B and 144C - objection with the DRP - as argued notwithstanding filing of objections with DRP ) u/s 144C Subsection 2(b) within 30 days prescribed AO has proceeded to pass the impugned assessment order - stand of Revenue is assessee only informed the AO that it is filing an objection with the DRP and therefore, not to proceed to pass the final assessment order. But, the copy of the objections filed was not made available to the AO - HELD THAT - Objections are to be considered by the DRP and not the AO, who has to only comply with the directions given under Sub-section 5 of Section 144C of the Act by DRP, as required under Sub-section 13 of Section 144C of the Act. At the same time, we also find that the AO has admitted in the assessment order that the objections were available in the portal. The reference before DRP is still pending. In our view, since Petitioner had already filed a reference raising its objections to the DRP and Section 144C of the Act requires the AO to pass the final order in conformity with the view expressed by the DRP, we will be justified in setting aside the order of AO dated 30th December 2023, which is impugned in this petition. We would also observe that the AO cannot be faulted for passing the impugned order. At the same time, the AO will also have benefit of considering the views of DRP while passing a fresh assessment order.

Summary

Issues involved:
The issues involved in this case include the quashing of the final assessment order, notice of demand, penalty notices issued under different sections of the Income Tax Act, and the compliance with procedures related to objections filed with the Dispute Resolution Panel (DRP).

Final Assessment Order and Objections:
The petitioner sought the quashing of the final assessment order, along with other related notices, issued by the Assessing Officer (AO) under specific sections of the Income Tax Act. The main contention was that despite filing objections with the DRP within the prescribed time, the AO proceeded to pass the assessment order without considering the objections. The petitioner argued that the objections were uploaded on the ITBA Portal and should have been accessible to the AO. The court agreed that the objections are to be considered by the DRP, and the AO must comply with the directions given by the DRP.

Access to Objections and Compliance:
The court noted that the AO admitted in the assessment order that the objections were available on the portal. While the reference before the DRP was pending, the court emphasized that the AO should pass the final order in accordance with the view expressed by the DRP. The court decided to set aside the impugned order of the AO, acknowledging that the AO cannot be faulted for passing the order but should consider the views of the DRP while issuing a fresh assessment order.

Court's Decision and Order:
The court allowed the petition and issued a writ to quash the final assessment order, notice of demand, and penalty notices. The court directed the AO to take further steps in the matter after the DRP passes its order on the reference filed by the petitioner. Additionally, the court noted that the petitioner had also filed an appeal with the Commissioner of Income Tax (Appeals) and undertook to withdraw the appeal within a week of the court's order being uploaded. The petition was disposed of in light of these considerations.