Mandatory Draft Assessment Orders for Foreign Entities and Section 144C Compliance: A Legal Perspective

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..... (ITAT), the Tribunal addressed the critical issue of compliance with Section 144C of the Income Tax Act, 1961, concerning draft assessment orders in tax assessments of foreign companies. The case under discussion presents an intricate examination of procedural compliance in the context of tax law, specifically focusing on the mandatory procedures required for assessment of foreign entities under .....

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..... non-compliance with the procedure mandated by Section 144C, particularly whether such non-compliance renders the final assessment order void. IV. Detailed Analysis * Section 144C's Mandate: The Tribunal's analysis hinged on interpreting Section 144C, which obligates the AO to provide a draft assessment order to an "eligible assessee" before finalizing the tax assessment. This procedural step .....

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..... A central theme in the Tribunal's reasoning was that procedural lapses, such as the failure to issue a draft order, have substantive legal consequences. The Tribunal adjudged that such non-compliance rendered the final assessment order legally unsustainable, effectively nullifying it. V. Tribunal's Decision Concluding its detailed scrutiny, the Tribunal allowed the appeal, setting aside the AO's .....

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