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TMI Blog2023 (9) TMI 1333X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessee : Shri Amit Arora, CA For the Revenue : Shri Mayank Kumar, Sr. DR ORDER PER C.N. PRASAD, J.M. The appeal and cross objection were filed by the Revenue and assessee respectively for the AY 2009-10 against the order of the Ld. Commissioner of Income Tax (Appeals)-2, Noida dated 26.07.2017. The Revenue in its appeal raised the following grounds: - (i) Whether on the facts and in the circumstances of the case and in law, the CIT(A) has erred in holding that amendment to Section 40(a)(ia) and 201(1) w.e.f. 1st July, 2012 is curative in nature and applies retrospectively to the case of the assessee. (ii) Whether the CIT(A) has erred in directing the Assessing Officer to not levy interest u/s 234B of the Income Tax Act, 1961 when the decision of the Delhi High Court in GE Packaged Power Inc. has not attained finality as the Department has filed review application in the Hon ble Supreme Court. The assessee in its cross objection raised the following grounds: - Ground No.1 On the facts and circumstances of the case the Ld.CIT(A) erred in confirming the action of the Assessing Officer in issuing the final assessment order which is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ltd. (supra) since the AO without passing draft assessment order and providing an opportunity to file objections before the DRP by the assessee passed final assessment order u/s 144C of the Act. The Tribunal while quashing the assessment order held as under: - 7. Before us, Ground No, 1 is with respect to the argument of the assessee that the assessment order passed by the Id. Assessing Officer in pursuance of ITAT setting aside the whole issue to the file of the Id Assessing Officer is bad in law for the reason that the Ld. Assessing Officer should have passed a draft assessment order, instead he passed final order u/s 143 (3) r.w.s. 144C r.w.s. 254 of the act on 15/3/2015. In absence of any such draft assessment order passed by the Assessing Officer and instead of that passing the final assessment order straight-away is not correct. The Id. AR, therefore, submitted that any consequent order passed by the Id. Assessing Officer is bad in law. The Id. AR relied on the decision of the Hon ble Delhi High Court in the case of Nokia India Pvt. Ltd. Vs, AC1T in WPC No. 3629 (Del) of 2017 of Hon ble Delhi High Court which has been affirmed by Hon ble Supreme Court in ACIT Vs. Noki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutiny assessment, the Assessing Officer made a reference to the office of Transfer Pricing Officer (TPO) in relation to the international transaction between the respondent-assessee and its Associated Enterprise (AE). Draft assessment order under section 1440(1) of the Act was passed on 31st December, 2010 and the respondent-assessee filed objections before the Dispute Resolution Panel (DRP). Thereafter, assessment under section 143(3)/144C of the Act was completed in pursuance to directions issued by the DRP, wherein addition was made on account of excess claim of deduction under section 10A of the Act and transfer pricing adjustment made by the TPO. Being aggrieved, the respondent-assessee filed an appeal before the ITAT, where, the additions on account transfer pricing and deduction under section 10A of the Act were set aside and the Assessing Officer was directed to frame the assessment afresh. The matter was restored to the Assessing Officer vide para 4.2.1 of ITAT order dated 17th July, 2012, which reads as under: 4.2.1 As a view has already been taken by the Tribunal in the aforesaid case and in the case of Ameriprise India Pvt. Ltd. in ITA No, 5694/De 1/201.1 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned in section 144C and not de hors it. SECTION 144C ENVISAGES A CHANGE OF FORUM AND IT LEADS TO COMPLETE CESSATION OF THE JURISDICTION OF THE ASSESSING OFFICER ON PASSING OF THE DRAFT ORDER. THEREAFTER THE ASSESSING OFFICER IS TO GIVE EFFECT TO EITHER THE DIRECTION OF THE DISPUTE RESOLUTION PANEL OR PASS AN ORDER ON ACCEPTANCE BY THE ASSESSEE. 16. This Court is of the opinion that it is essential to analyze Section 144C. The said Section reads as under: 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. (2) On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by hint 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... differ in opinion on any point, the point shall be decided according to the opinion of the majority of the members. (10) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer. (11) No direction under sub-section (5) shall be issued unless an opportunity of being heard is given to the assessee and the Assessing Officer on such directions which are prejudicial to the interest of the assessee or the interest of the revenue, respectively. (12) No direction under sub-section (5) shall be issued after nine months from the end of the month in which the draft order is forwarded to the eligible assessee. (13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained in section 153 or section 153B. the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received. (14) The Board may make rules for the purposes of the efficient functioning of the Dispute Resolution Panel and expeditious disposal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... THE FIRST INSTANCES HAS BEEN USED IN SECTION 144C TO SIGNIFY THE FIRST STEP TO BE TAKEN BY THE ASSESSING OFFICER IN A SERIES OF ACTS CONTEMPLATED BY THE SAID SECTION TO ACCEPT THE APPELLANT'S ARGUMENT WOULD BE TO PERMIT THE ASSESSING OFFICER TO DECIDE THE OBJECTIONS FILED BY THE ASSESSEE WHICH POWER HAS BEEN SPECIFICALLY DENIED BY THE STATUTE. 19. The expression in the first instance has been used in Section 144C to signify the first step to be taken by the Assessing Officer in a series of acts contemplated by the said Section while dealing with the case of an eligible assessee. This Court is further of the view that if the Assessing Officer under section 144C can prepare a draft assessment order only, then by virtue of a remand order which directs the Assessing Officer to decide the matter de novo, the Assessing Officer cannot get the power to pass an assessment order, when there is an objection by the Assessee like in the present case, without reference of the Dispute Resolution Panel which comprises of three Principal Commissioners or Commissioners of Income-tax constituted by the Board. 20. Now to accept the appellant's argument would be to permit the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich 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 Bench (DB) of the 'Andhra Pradesh High Court categorically held that the failure to pass a draft assessment order under section 144C(1) of the Act would result in rendering the final assessment without jurisdiction, null and void and unenforceable. In that case, the consequent demand notice was also set aside. The decision of the Andhra Pradesh High Court was affirmed by the Supreme Court by the dismissal of the Revenue's SLP(C) [CC No. 16694/2013] on 27th September, 2013. 13. In Vijay Television (P.) Ltd. v. Dispute Resolution Panel [2014] 369 1TR 113 (Mad.) a similar question arose. There, the Revenue sought to rectify a mistake by issuing a corrigendum after the final assessment order was passed. Consequently, not only the final assessment order but also the corrigendum issued thereafter was challenged. Following the decision of the Andhra Pradesh High Court in Zuari Cement Ltd. v. ACIT (supra) and a number of other decisions, the Madras High Court in Vijay Television (P.) Ltd. v. Dispute Resolution Panel (supra) q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... number of years like in the present case where the case of assessment year 2007-08 stands remanded and restored to the file of the Assessing Officer. 27. Consequently, we dismiss the present appeal and confirm the impugned order of the ITAT with costs of Rs. 11,000/- to be paid to Delhi High Court Legal Services Committee. 10. In view of the above decision, we hold that the order dated 31.03.2015 passed by the Ld. Assessing Officer ignoring the statutory provisions of Section 144C of the Act is liable to be quashed and hence, we reverse the order of the Ld. CIT (Appeals) and allow ground No. 1 of the appeal of the assessee. 5. We observe that similar view has been taken by the Hon ble Delhi High Court in the case of Nokia India Pvt. Ltd. Vs. Addl. CIT (supra) and further the SLP filed by the Revenue was also dismissed by the Hon ble Supreme Court which is reported in 98 Taxmann.com 374. 6. In the case on hand, we observe from the assessment order that the Tribunal vide its order dated 22.02.2015 in ITA No.565/Del/2013 has restored the issue to the file of the AO for denovo consideration following the order of the Tribunal in assessee s own case for the AY 2008-09 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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