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TMI Blog2016 (5) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... aft assessment order. Further, on a perusal of Circular No. 5 of 2010, dated June 3, 2010 issued by the Central Board of Direct Taxes being explanatory notes to the provision of the Finance (No. 2) Act, 2009, it has been very clearly stated that the provisions are applicable with effect from October 1, 2009. It is also an undisputed fact that the order of the Assessing Officer in the present case is dated December 26, 2011, the order of the Transfer Pricing Officer is dated October 21, 2011. In view of the above, the order passed by the Assessing Officer is without jurisdiction. Reliance placed by the learned counsel of the assessee on the judgment of High Court of Madras in the case of Vijay Television P. Ltd. v. DRP [2014 (6) TMI 540 - MADRAS HIGH COURT ] is not out of place wherein held that the final order passed by the Assessing Officer without passing a draft assessment order is bad in law. - Decided in favour of assessee. - I. T. A. No. 823/Chd/2012 and C. O. No. 29/Chd/2012 - - - Dated:- 11-3-2016 - Bhavnesh Saini (Judicial Member) And Rano Jain (Accountant Member) For the Petitioner :Ajay Sharma For the Respondent :Ashwani Kumar, Aditya Kumar ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to extraordinary circumstances including those which were beyond the control of the assessee. It was stated that the assessee had incurred extraordinary expenses amounting to ₹ 5,34,97,190 which included premium rate, product rectification charges, stores and spares, power and fuel, personnel expenses, depreciation, internal rejections and travelling expenses. Since these expenses were incurred due to development and production of the new product called DCX gears, these were claimed to be extraordinary expense. The Commissioner of Income-tax (Appeals) while adjudicating the appeal of the assessee rejected the legal ground raised by the assessee holding that the provisions as contained under section 144C have been brought into the statute with effect from October 1, 2009, by the Finance (No. 2) Act, 2009, and, therefore, would not be applicable retrospectively to the assessment year 2008-09. However, while adjudicating the issues of the assessee on the merits, the Commissioner of Income-tax (Appeals) gave a categorical finding that the Assessing Officer has not given due adjustment to certain extraordinary items of expenditure/loss even though he has accepted that the same w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to it. Since the issue involved in the cross objection is a legal issue we intend to adjudicate the same first. 8. The learned counsel for the assessee while arguing before us stated that by not complying with the provisions of section 144C, i.e., not providing the draft order the Assessing Officer has deprived of the assessee's opportunity and the right of filing objections before the Dispute Resolution Panel (DRP). Our attention was invited to the provisions of section 144C of the Act, whereby it has been provided that the Assessing Officer is obliged to forward a draft of the proposed order of assessment to the assessee if he intends to make on or after the 1st day of October, 2009, any variation in the income or loss returned by the assessee. It was also brought to our notice that the order of the Transfer Pricing Officer is dated October 21, 2011, while the order of the Assessing Officer in the present case is dated December 26, 2011. In view of this it was contended that the order passed by the Assessing Officer is bad in law and liable to be quashed. Reliance was placed on the judgment of the High Court of Madras in the case of Vijay Television P. Ltd. v. DRP [2014] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anything contained in section 153 or section 153B, pass the assessment order under sub-section (3) within one month from the end of the month in which,- (a) the acceptance is received ; or (b) the period of filing of objections under sub-section (2) expires. 11. From the perusal of the above provisions it is clear that the position of law is that under section 144C of the Act, with effect from October 1, 2009, the Assessing Officer is required to issue a draft assessment order in case there is a proposed addition or disallowance on the return filed by the assessee. This is a mandatory requirement of law. 12. The provisions are quiet unambiguous. The fact that the assessee is an eligible assessee is not in dispute in the present case. The meaning of eligible assessee is provided under section 144C(15) clause (b), which reads as under : 144C.(15) For the purposes of this section,- (b) 'eligible assessee' means,- (i) any person in whose case the variation referred to in sub- section (1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA ; and (ii) any foreign company. 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder,- (a) file his acceptance of the variations to the Assessing Officer; or (b) file his objections, if any, to such variation with- (i) the Dispute Resolution Panel ; and (ii) the Assessing Officer. (3) The Assessing Officer shall complete the assessment on the basis of the draft order, if- (a) the assessee intimates to the Assessing Officer the acceptance of the variation ; or (b) no objections are received within the period specified in sub-section (2). (4) The Assessing Officer shall, notwithstanding anything contained in section 153, pass the assessment order under sub- section (3) within one month from the end of the month in which,- (a) the acceptance is received ; or (b) the period of filing of objections under sub-section (2) expires. (5) The Dispute Resolution Panel shall, in a case where any objection is received under sub-section (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment. (6) The Dispute Resolution Panel shall issue the directions referred to in sub-section (5), after considering the,- (a) draft order ; (b) object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; means,- (i) any person in whose case the variation referred to in sub- section (1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA ; and (ii) any foreign company. 45.3 Further, consequential amendments have been made- (i) in sub-section (1) of section 131 so as to provide that the 'Dispute Resolution Panel' shall have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908) ; (ii) in clause (a) of sub-section (1) of section 246A so as to exclude the order of assessment passed under sub-section (3) of section 143 or under section 147 in pursuance of the directions of the 'Dispute Resolution Panel' as an appealable order and in clause (c) of sub-section (1) of section 246 so as to exclude an order passed under section 154 of such order as an appealable order ; (iii) in sub-section (1) of section 253 so as to include an order of assessment passed under sub-section (3) of section 143 or under section 147 in pursuance of the directions of the 'Dispute Resolution Panel' as an appealable order. 45.4 It would be the choice of the ..... 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