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TMI Blog2025 (3) TMI 866X X X X Extracts X X X X X X X X Extracts X X X X ..... dy stated in assessee's case, the revenue has not disputed the fact that the assessee falls within the definition of "eligible assessee" as per the provisions of section 144C(15)(ii) and therefore the AO ought to have passed the draft assessment order before passing the final assessment order.
Failure of passing of a Draft Order under Sec 144C (1) is not a curable defect since this a violation of a statutory right of the assessee to raise grievance that can be addressed before a final assessment order is passed and appellate proceedings invoked. Thus final assessment order passed by the AO is liable to be quashed. X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and in the circumstances of the case and in law the CIT(A) erred by failing to appreciate that the profits from the operation of ships in international traffic shall be taxable only in Singapore and therefore, the Appellant company has rightly offered the same for the Purpose of taxation in the jurisdiction of the Singapore. 4. On the facts and in the circumstances of the case and in law, the Learned CIT(A) failed to consider the fact that, assessee company is eligible to claim relief of the taxable profit under India Singapore treaty. 5. The Learned CIT did not recognise the fact that, the appellant had submitted all DIT certificates for which DIT exemption was claimed. 6. On the facts and circumstances of the case and in la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the details furnished in the various schedule of the return of income filed by the assessee made an addition of Rs. 3,41,77,870/- stating that the assessee itself has offered the same to tax under section 44B of the Act and that the AO does not have power to reduce the income declared by the assessee in the return. On further appeal, the CIT(A) upheld the decision of the AO by placing reliance on the decision of the Hon'ble Supreme Court in the case of Goetz (India) Ltd. vs. CIT [284 ITR 323 (SC)]. The assessee is in appeal before the Tribunal against the order of the CIT(A). 3. Ground No.1 pertains to the legal issue of the AO passing the final assessment order under section 143(3) of the Act without issuing the draft assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o made the alternate submission that the AO has made variation to the income returned which is prejudicial to the interest of the assessee and on that count also the AO ought to have passed the draft assessment. 4. The ld. DR on the other hand relied on the order of the lower authority. 5. We heard the parties and perused the material on record. The primary legal contention of the assessee is with regard to the AO passing the final assessment order without passing the draft assessment order in case of the assessee who is "eligible assessee" within the definition of section 144C(15) of the Act. Therefore, before proceeding further let us look at the provisions of section 144C of the Act. "Reference to dispute resolution panel. 144C. (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the AO has passed the final assessment order without passing any draft assessment order and the fact is not disputed by the Revenue. We notice that the Hon'ble Bombay High Court in the case of International Air Transport Association vs. DCIT [2016} 68 taxmann.com 246 (Bom.)] has considered a similar issue where it has been held that "5. However, it is pertinent to note that the order dated 7th October, 2015 of the DRP in paragraph (3) thereof records that "There is no dispute that the assessee is a foreign company". This position is undisputed even before us. Therefore, in view of Section 144C(15) of the Act which defines eligible assessee to whom Section 144C(1) of the Act applies to inter alia mean any foreign company. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le assessee" as per the provisions of section 144C(15)(ii) and therefore the AO ought to have passed the draft assessment order before passing the final assessment order. It is relevant to mention that failure of passing of a Draft Order under Sec 144C (1) is not a curable defect since this a violation of a statutory right of the assessee to raise grievance that can be addressed before a final assessment order is passed and appellate proceedings invoked. Therefore, respectfully following the above decision of the Hon'ble Bombay High Court we hold that the final assessment order passed by the AO is liable to be quashed. 8. Since we have allowed the appeal in favour of the assessee on the above legal contention, the other submissions mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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