TMI Blog2018 (10) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessity for the Parliament to incorporate Section 144-C is not only to safeguard the Revenue, but also the assessee and any mistake committed by any one of them, the said party is supposed to face the consequences and cannot put the hands of the clock back and start afresh.Though it is the submission of the Revenue that it is a procedural irregularity, which can be corrected through issuance of a corrigendum and no prejudice would be caused to the assessee, however, it is to be pointed out that the act committed by the Revenue is an incurable illegality, which cannot stand protected by Section 292B of the Act. If the contention of the Revenue is accepted, then it would literally render all the provisions of the Income Tax Act subservient to Section 292B. In effect, any error or omission or mistake committed by the Revenue at any stage of a proceeding cannot be sought to be cured by taking umbrage under Section 292B. Allowing such a contention would be misreading the intention of the Parliament in enacting Section 292B and Section 144-C. The question of limitation raised by the Revenue would in no way save the Revenue from the non-compliance of Section 144-C of the Act. The non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 specifically in column 13, where the provisions were omitted to be mentioned. Therefore, a corrigendum was issued on 15.4.2013 rectifying the column 13. 6. The assessment order dated 26.3.2013 and the corrigendum issued on 15.4.2013 were challenged by the assessee in WP Nos.1526 of 2014 and 1527 of 2014 respectively contending that the order dated 26.3.2013 should be treated as a final order without passing the mandated DAO and the corrigendum dated 15.4.2013 cannot rectify the order dated 26.3.2013 as the corrigendum was passed beyond the limitation date (as the last date for passing the order of assessment is 31.3.2013). 7. Learned single Judge, after exhaustive consideration of the matter, accepted the contention of the assessee and allowed the writ petitions holding that the order passed by the AO on 15.4.2013 is beyond the period of limitation, which cannot rectify the error and convert the order dated 26.3.2013 as one of a DAO. Aggrieved by the said order, the present appeals have been preferred by the Revenue. 8. W.A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 'DRP), but the DRP declined to issue any direction to the AO on the ground that the DRP has got jurisdiction only to entertain an appeal in respect of a pre-assessment order (draft assessment order). Therefore, it is submitted that the order dated 26.3.13 is not only a final order in terms of its content but also by the way in which it was treated so by the DRP as well, as the DRP refused to entertain the appeal filed by the assessee. 13. The main contention raised by the learned senior counsel for the assessee is that as per Section 144 (C) (1) of the Act, the AO has no right to pass any final order pursuant to the recommendations made by the Transfer Pricing Officer (TPO), but the order dated 26.3.13 is a final order though it was directed to be treated as a draft assessment order, by the issuance of a corrigendum. 14. It is the contention of the learned senior counsel for the assessee that the violation committed by the AO in not adhering to the procedure contemplated under Section 144 (C) (2), ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 taken up to Supreme Court by way of Special Leave Petition and the Hon'ble Supreme Court has dismissed the SLP (Civil) CC No.16694/2013 dated 9 27.09.2013. 19. However, the above submissions of the assessee is countered by the learned counsel for the Revenue placing reliance upon the provisions of Section 292B to suggest that the procedure contemplated under Section 292B would cure the irregularities committed by the authorities concerned and therefore, the order passed by the AO cannot be quashed. 20. This Court bestowed its anxious considerations to the submissions advanced by the learned counsel appearing for the parties and also to the various Sections of the Income Tax Act, to which attention was drawn as also the various decisions relied on by either side. 21. In a nutshell, while it is the contention of the learned counsel for the appellants that Section 292B of the Income Tax Act takes care of anomalous situation that would arise in case wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligible 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 Assessing Officer. (3) The Assessing Officer shall complete the assessment on the basis of the draft order, if- (a) the assessee intimates to the Assessing Officer the acceptance of the variation; or (b) no objections are received within the period specified in sub-section (2). (4) The Assessing Officer shall, notwithstanding anything contained in section 153, pass the assessment order under subsection (3) within one month from the end of the month in which,- (a) the acceptance is received; or (b) the period of filing of objections under sub-section (2) expires. (5) The Dispute Resolution Panel shall, in a case where any objection is received under sub-section (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment. (6) The Dispute Resolution Panel shall issue the directions referred to in subsection (5), after considering the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot 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) is a final assessment, after duly hearing the assessee and perusing the records. 29. However, curiously, the error that had crept in by mentioning of the incorrect Section in the proceeding was found out by the Revenue and, therefore, a corrigendum dated 15.4.2013 has been issued in and by which Column No.13 was to read as 144-C rws 92CA (4) rws 143 (3) . 30. It is the contention of the learned senior counsel for the respondent/assessee that the issue as to whether the corrigendum issued by the Asst. Comm of Income Tax is really sustainable and whether it would have the effect of curing the deficiencies crept in the order dated 26.3.13 has been extensively dealt with by the learned single Judge and finally after elaborating the reasons it has been held that the corrigendum would not have the effect of curing the original order and the reasons stated are as under :- Und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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 as draft assessment order. 34. Will the corrigendum, which has been issued on 15.4.2013 cure the defect that has crept into the order and, thereby, rectify the mistake committed by the Revenue and enable treatment of the assessment order as a draft assessment order is the point, which requires the determination of this Court. 35. Reliance has been placed by the Revenue on the decision of the Allahabad High Court in Commissioner of Income Tax, Aligarh Vs Shyam Cold Storage (31 TAXMANN 358 (ALL)) and the decision of the Karnataka High Court in Commissioner of Income Tax, Central Circle Vs Sri Durga Enterprises (44 TAXMANN 442 (KAR)) , wherein, it has been held that Section 292B has been enacted to cure certain defects that have crept in, which, if not allowed, would defeat the very purpose of the Act. It has been further held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal 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 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 order 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. 38. Similar orders passed by the Andhra Pradesh High Court, Bombay High Court, Gujarat High Court and in many cases by the Delhi High Court have been placed before this Court by the learned senior counsel for the assessee. It is further submitted before this Court that the Supreme Court has also confirmed the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 consciously passed the Draft Assessment Order under Section 144-C, however, indicated the Section wrongly. 46. The Revenue, with a view to squirm around from under wrongful act of passing the assessment order, which is prohibited by law and an unlawful one, had issued a corrigendum, amending the Section under which the order has been passed, forgetting that the content of the order that matters and not the mere quoting of the Section alone. In other words, the window dressing which has been attempted by the Revenue would not give life to an order passed without jurisdiction. It is to be pointed out that the order of assessment, once issued under Section 143 (3), becomes final and reopening the same is impermissible. The mistake committed by the Revenue in not following ..... X X X X Extracts X X X X X X X X Extracts X X X X
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