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TMI Blog2021 (11) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... y requirement of passing draft order has to be strictly adhered to, irrespective of the remand order passed by the Tribunal. Having regard to the language employed by the legislature under Section 144C of the Act, it is mandatory to the Assessing Officer to pass draft assessment order before issuing the final order, breach of the same would result in violation of the principles of natural justice making the order itself void ab-initio. It is well settled law, if the order of the assessment itself is not valid then the further action of the Commissioner in initiating revision proceedings under Section 263 is not valid in the eye of law - substantial questions of law No.1 and 2 are answered in favour of the assessee and against the Revenue Revision u/s 263 - Whether Tribunal is right in law in dismissing Revenue s appeal by holding that assessment order itself has been quashed and as such order passed under section 263 of the Act does not arise? - HELD THAT:- Issue decided in favour of assessee as relying on M/S. CISCO SYSTEMS CAPITAL (INDIA) PVT. LTD., [ 2021 (7) TMI 121 - KARNATAKA HIGH COURT] - I.T.A. NO.128/2021 - - - Dated:- 20-9-2021 - HON BLE MRS. JUSTICE S. SUJATHA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d an order under Section 92VA read with Section 254 of the Act relating to the Assessment Year 2008-09 and 2009-10. On receipt of the said order from TPO, Assessing Authority passed an order under Section 143(3) of the Act against which the assessee preferred an appeal before the CIT(A), primarily on the ground that the Assessing Authority has failed to pass draft assessment order, which came to be dismissed. Being aggrieved, the assessee preferred an appeal before the Tribunal. The Tribunal has allowed the assessee s appeal for the Assessment Year in question dismissing the Revenue s appeal. Being aggrieved by the same, the Revenue has preferred this appeal. 3. Learned counsel Sri. E.I. Sanmathi, appearing for the appellant/Revenue submitted that the order of the Tribunal is not in conformity with the procedure laid down under Section 144C of the Act in passing the assessment order. The Tribunal has failed to appreciate the mandate of Section 144C of the Act that the assessing authority shall, in the first instance, forward a draft of the proposed order of assessment to the eligible assessee for acceptance or filing of objections. In the present case, draft order was issued in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eputy Commissioner of Income Tax Delhi Vs. Control Risks India Pvt., Ltd.,(Special Leave Petition (Civil) Diary No.7090/2018) filed by the Revenue have been dismissed. Hence, the Substantial Question of Law raised herein being fully covered by the judgment of the Hon ble High Courts referred to supra, confirmed by the Hon ble Apex Court, appeal of Revenue deserves to be dismissed answering substantial questions of law in favour of the assessee and against the Revenue. 6. We have considered the rival submissions of the learned counsel appearing for both the parties and perused the material on record. Regarding Substantial Questions of law No.1 and 2: 7. Section 144C of the Act reads thus: 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, which is prejudicial to the interest of such assessee. 8. Learned counsel for the Revenue has emphasized on the words first instance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, it could not be sustained in law. 14. Recently, this Court in ESPN Star Sports Mauritius S.N.C. ET Compagnie v. Union of India [2016] 388 ITR 383 (Del.). following the decision of the Andhra Pradesh High Court in Zuari Cement Ltd., v. ACIT (supra), the Madras High Court in Vijay Television (P.) Ltd. v. Dispute Resolution Panel, Chennai (supra) as well as the Bombay High Court in International Air Transport Association v. DCIT (2016) 290 CTR (Bom.) 46, came to the same conclusion. 9. The arguments advanced by the learned Additional Solicitor General of India has also been recorded in para -16, which is quoted hereunder for ready reference: 16. In response, Mr. Sanjay Jain, learned Additional Solicitor General of India appearing for the Revenue, submitted that there was an efficacious alternative remedy available to the Petitioner to file appeals against the impugned final assessment orders passed by the AO. It is denied that it was mandatory on the part of the AO to pass a draft assessment order since this was a second round before the TPO pursuant to remand by the ITAT. Moreover, it was not as if the ITAT had set aside the entire assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 2 are answered in favour of the assessee and against the Revenue. Regarding substantial question of law No.3: 12. Learned counsel for the assessee brought to our notice that ITA No.27/2019 filed by the Revenue challenging the order of the Tribunal relating to the order passed by the Commissioner under Section 263 of the Act relating to the Assessment Year 2008-09 has been dismissed by this Court on 18.06.2021. We have perused the copy of the order of this Court in ITA No.27/2019, wherein the Co-ordinate Bench of this Court has dismissed the appeal filed by the Revenue answering the Substantial Question of Law in favour of the assessee and against the Revenue. The Substantial Question of Law considered therein reads thus: Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside the order passed by the Pr. Commissioner of Income Tax under Section 263 of the Act by Tribunal relying on the decision of the Hon ble Supreme Court in the case of Malabar Industrial Company Ltd., v/s. CIT even when the said authority passed the 263 order in terms of parameters of said section and as the order of assessment passed by assessing author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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