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TMI Blog2015 (6) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... and providing information technology enabled services and related services. The assessment of the year under consideration was originally completed on 17.10.2011 u/s 144C(13) r.w.s. 143(3) of the Act by making various additions. When the assessee challenged the assessment order by filing appeal before the ITAT, the Tribunal set aside all the matters to the file of the assessing officer with the following observations, vide its order dated 25.1.2012 passed in ITA No.7667/Mum/2011:- "8. Considering the provisions of Sec. 144C of the Act and order of DRP passed u/s 144C(5) of the Act dt. 30th September, 2011, placed on record, we observe that DRP has not given any reason and/or commented upon the objections of assessee in the said order while agreeing with the adjustments proposed by TPO. Ld. DR has not disputed the above contention of Ld AR save and except to submit that AO has to pass order in conformity with the adjustments proposed by TPO and referred to Sec. 92C(4) of I.T. Act. However, Ld DR conceded that DRP in its order has not given any reasons in respect of objections filed by assessee on T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e eligible assessee. He submitted that the assessing officer, in the instant case, has passed the final assessment order on 12.03.2014 without adhering to the mandate of the provisions of sec. 144C(1) of the Act. He further submitted that the assessing officer has issued a Corrigendum on 16.04.2014, but the same will not make good the mistake committed by the assessing officer. He further submitted that the assessing officer has issued "Notice of demand" for the tax determined in the assessment order dated 12-03-2014 and also issued penalty notice u/s 271(1)(c) of the Act, which clearly bring out the intention of the assessing officer that he has intended the assessment order dated 12-03-2014 to be the final order only. Further the AO himself has observed in the assessment order that the time limit for completion of assessment proceedings got extended up to 31-03-2014 by virtue of third proviso to Sec. 153(2A) of the Income tax Act. Accordingly he submitted that the corrigendum issued on 16-04-2014 will not extend the statutorily prescribed time limit for completing the assessment as per the third proviso to sec. 153(2A) of the Act. Accordingly he submitted that the assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) prescribes two year period for completion of assessment consequent to the directions given by the ITAT. He submitted that the Tribunal has passed the order in January, 2012 and it is not clear from the record as to whether the Commissioner has received the order by March, 2012 or not. Accordingly he submitted that the observation made by the AO that the time limit is available up to 31.3.2014 requires verification. 9. We have heard the rival contentions on this preliminary issue. There is no dispute with regard to the fact that the present proceedings have been completed by the assessing officer in order to give effect to the order dated 25.01.2012 passed by the Tribunal, referred above. Since the assessing officer himself has observed that the time limit for completing the assessment got extended up to 31.3.2014 after referring to the third proviso to sec. 153(2A) of the Act, we do not think it necessary to examine the correctness of the said observation at this stage. Accordingly we do not find any merit in the contentions of Ld D.R urged in this regard. Accordingly, the assessing officer has to complete the assessment on or before 31.3.2004 in order to give effect to the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce he considered the same to be the final order, he has issued notice of demand as well as the penalty notice. 12. The sequence of events narrated above would show that the assessing officer has failed to follow the directions given by the Tribunal in its order dated 25-01-2012. We have already noticed that the Tribunal has made a specific observation that the DRP has not passed a reasoned order and hence the matter was restored to the file of the assessing officer at the stage of "draft assessment order". Hence the assessing officer was required to forward a copy of the draft order in terms of sec. 144C(1) of the Act and thereafter the procedure prescribed for filing objections, if any, before the DRP by the assessee might have been followed. Apparently the assessing officer has failed to follow the mandate of the provisions of sec. 144C(1) of the Act. 13. The next question that arises is Whether the Corrigendum dated 16.04.2014 issued by the Assessing officer to the effect that the assessment order dated 12-03-2014 should be read as "Draft assessment order" will make good the mistake committed by the assessing officer. The Ld D.R submitted that the assessee, after receipt of Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um on 15.04.2013 modifying the final assessment order passed on 26.03.2013 to be read as "Draft assessment order". The Hon'ble Madras High Court noticed that the AO had issued Demand notice raising tax demand upon the assessee. Further, the High Court noticed that the AO has failed to withdraw the demand raised upon the assessee at the time of issuing Corrigendum. The Hon'ble High Court further noticed that the Corrigendum dated 15.04.2013 is beyond the period prescribed for limitation. Under these set of facts, the High Court held that the assessment order dated 26-03-2013 should be construed as final assessment order passed in violation of the statutory provisions of the Act. The High Court further held that such a defect or failure on the part of the AO to adhere to the statutory provisions is not a curable defect by virtue of corrigendum dated 15.04.2013. 17. In the instant case also, it is not the case of the department that the demand raised in the assessment order dated 12-03-2014 was withdrawn by the AO at the time of issuing Corrigendum dated 16-04- 2015. Further, the Corrigendum itself was issued by the AO after the expiry of time limit prescribed under third proviso to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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