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TMI Blog2018 (10) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... records further reveal that the total income being below Rs. 25 Lakhs, there was a change of officer and the case was transferred to Media Ward III vide Notification and letter dated 20.7.2011. Opportunity was once again given to the assessee by issuance of notice dated 7.10.2011 u/s 143 (2) of the Act. It further transpires from the records that once again due to administrative change, the case was transferred to Media Circle II and again notice u/s 142 (1) dated 16.10.2012 was issued to the assessee fixing the date of hearing on 30.10.2012. 4. As the case involved international transactions, the matter was referred to the Transfer Pricing Officer (for short 'TPO') u/s 92 CA (1) for determination of Arms Length Price (for short 'ALP') and the order of the TPO was received on 30.01.2013. The AO again gave opportunity to the assessee vide letter dated 22.2.2013 and called for, objection to the order passed by the TPO by the assessee. 5. At all stages, the assessee participated in the proceedings and while a draft assessment order (for short 'DAO') was to be passed, the AO found a mistake had crept in while passing the order dated 26.3.2013, more specifical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see submitted that the order dated 26.3.13, passed by the 2nd respondent is not a draft assessment order, but a final order. It is further submitted that prior to the order dated 26.3.13, a notice of demand u/s 156 of the IT Act was issued and the notice of demand has been served along with the order dated 26.3.13. The assessee was also called upon to pay penalty. Thereafter, the assessee was given an opportunity of hearing on 12.4.13. The Assistant Commissioner of Income Tax, Media Circle II realised the mistake thereafter in passing a final order instead of a draft assessment order, which resulted in issuance of a corrigendum on 15.4.13. 11. It is the submission of the learned senior counsel for the assessee that in the corrigendum it was only stated that the order passed on 26.3.13 has to be read and treated as a draft assessment order as per Section 143 (C) r/w Section 93 (CA) (4) r/w Section 143 (3) of the Act and by the order dated 15.4.13, the assessee was granted 30 days time to file their objections. 12. It is further submitted by the learned senior counsel for the assessee that on receipt of the corrigendum the assessee approached the Dispute Resolution Panel (for short ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h. Reliance was placed on the following decisions :- 1) Zuari Cement Ltd. - VS. Asst. Commr. Of IT (AP High Court) - W.P. No.5557 of 2012 2) Asst. Commr. Of IT - Vs - Zuari Cement Ltd. (SC) - CC 16694/2013 3) IATA - Vs - Dy. Commr. Of IT & Ors. (Bombay High Court) - 68 Taxmann.Com 246 4) JCB India Ltd. - Vs - Dy. Commr. Of IT (Delhi High Court - 398 ITR 189 5) Turner International India Pvt. Ltd. - Dy. Commr. Of IT (Delhi High Court) - 398 ITR 177 6) Commissioner of IT - Vs - C-Sam (India) Pvt. Ltd. (Gujarat High Court) - 398 ITR 182 7) Control Risk India Pvt. Ltd. - Vs - Dy. Commr. Of IT (Delhi High Court) - WP 5722/2017 8) Dy. Commr. Of IT - Vs - Control Risk India Pvt. Ltd. - SLP No.7090/2018 9) Honda Cars India Ltd. - Vs - Dy. Commr. Of IT (Delhi High Court) - 382 ITR 88 10) ESPN Star Sports Mauritius S.N.C. ET Compagnie - Vs - UOI (Delhi High Court) - 388 ITR 383 11) ESS Distribution (Mauritius) S.N.C.E.T. Compagnie - Vs - Asst. Commr. Of IT (Delhi High Court - 399 ITR 362 12) Pankaj Extrusion Ltd. - Vs - Asst. Commr. Of IT (Gujarat High Court) - 10 Taxmann.com 17 18. Out of the above decisions, the decision of the Andhra Pradesh High Court has been t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.]" 24. Learned counsel for the assessee placed reliance upon Section 144-C of the Income Tax Act to stress before this Court the need for the AO to follow the procedure contemplated therein, which is for safeguarding the rights of both the parties. For better appreciation, Section 144-C is extracted hereunder :- "Reference to dispute resolution panel. 144C. (1) The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation in the income or loss returned which is prejudicial to the interest of such assessee. (2) On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order,- (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e DRP and the AO. It is further mandated that on the objections being received by the DRP under sub-section (2), the DRP shall issue such directions to the AO for the purpose of enabling him to complete the assessment. While issuing directions, the DRP shall consider the documents as mandated under sub-section (6). 26. From the above, it is clear that a right is vested with the assessee to challenge the draft of the proposed order of assessment, issued by the AO with the DRP and the DRP is supposed to guide the AO in completing the assessment. 27. It is the submission of the assessee that no draft assessment order was issued to the assessee by the AO, but the assessment order issued is a final one, which is evident from the corrigendum itself. Further, it is the submission of the assessee that the corrigendum has been issued beyond the limitation period and that the corrigendum cannot rectify the order dated 26.3.2013. 28. A perusal of the records reveal that the original order has been passed on 26.3.2013 and under Column No.13, the Section under which the assessment was passed has been noted as Section 143 (3). It is not in dispute that assessment passed under Section 143 (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plying that the assessment is final and not provisions. Adding insult to injury, penalty has also been imposed in the very same order. A notice of demand has also been made under Section 156 of the Act. Therefore, it is a conclusive order completing the assessment and making a consequential demand and by no stretch of imagination it can be construed as pre-assessment order. 32. It is further evident from the materials available on record that when the assessee approached the DRP against the above assessment order u/s 144-C (2), the DRP has categorically refused to entertain the appeal pointing out that no draft assessment order has been placed before it for taking up the matter. In essence, the DRP itself has confirmed that the order passed by the AO is a final order and not a draft assessment order. 33. Therefore, it is very clear that what has been issued is not a Draft Assessment Order, as contemplated u/s 144-C of the Income Tax Act, but a final order, as mandated u/s 143 (3) of the Act. However, the contention now raised is that the mistake stood corrected by issuance of the corrigendum dated 15.4.2013 and, therefore, for all purposes the assessment order should be treated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 292B of the Act cannot save an order not passed in accordance with the provisions of the Act. As the court explained, "the issue involved is not about a mistake in the said order, but the power of the Assessing Officer to pass the order." (Emphasis supplied) 37. In Turner International India Pvt. Ltd. - Vs - Dy. Commissioner of Income Tax (398 ITR 177), the Delhi High Court had an occasion to consider a similar issue, as raised in this writ petition and it was held as under :- "10. The short ground on which the aforementioned final assessment orders and the consequent demand notices have been challenged is that there was non-compliance with the mandatory provision contained in Section 144C(1) of the Act requiring the AO to first frame draft assessment orders. 11. The question whether the final assessment order stands vitiated for failure to adhere to the mandatory requirements of first passing draft assessment order in terms of Section 144C(1) of the Act is no longer res intregra. There is a long series of decisions to which reference would be made presently. 12. In Zuari Cement Ltd. v. ACIT (decision dated 21st February, 2013 in WP(C) No. 5557/2012), the Division Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er passed u/s 143 (3) of the Act is a final assessment order and the Revenue, realising the mistake committed by it, had, thereafter, issued the corrigendum, amending the Section to read as Section 144- C r/w 92 CA r/w 143 (3). Curiously, demand u/s 156 of the Act has been issued and penalty has also been imposed. For all practical purposes, the order of assessment should be deemed to be one under Section 143 (3) of the Act, though the draft assessment order ought to have been passed u/s 144-C. On objections being raised before the DRP, the DRP has also opined that the order passed is a final order and, therefore, it has no jurisdiction to entertain the objections. 45. Further, it is to be pointed out that even though the corrigendum has been issued indicating to read the Section 143(3) as Section 144-C r/w 92 (CA) r/w 143 (3) it does not indicate that the demand and penalty made in the Assessment Order has been withdrawn. Hence, the submission of the Revenue that the Assessment Order passed under section 143(3) read with the corrigendum issued shall be treated as Draft Assessment Order cannot be countenanced. It is not the case of the Revenue that the Assessing Officer has consci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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