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2020 (10) TMI 76 - AT - Income TaxProceedings initiated u/s 144C - legality of the order by framing the so-called draft assessment order - AO has completed proceedings by issuing demand notice and initiating penalty proceedings simultaneously - upward adjustment on TP matter and additions on corporate tax matter - HELD THAT:- Assessment proceedings concluded on 21.12.2018 and, therefore, any orders passed thereafter are non-est. Provisions of section 144C of the Act triggers a series of steps prescribed in sub-section (2) to section 12 and as can be seen from the most relevant sub-sections (3) and (13) the assessment is complete either under subsection (3) or sub section (13). Facts on record show that on 21.12.2018, the Assessing Officer quantified the taxable income and determined tax payable by issuing and serving demand notice u/s 156 of the Act. In our considered opinion, this action of the Assessing Officer has brought the proceedings to an end and the proceedings initiated u/s 144C of the Act stand concluded. A perusal of Section 144C shows that AO shall, at the first instance, forward a draft of the proposed order of assessment and on receiving such order, the assessee may approach the DRP by raising objections. If the assessee accepts the variation, then the AO shall proceed by framing the final assessment order and if the objections are raised before the DRP, then, upon receipt of directions issued by the DRP, the assessee shall complete the assessment. However, we find that while framing the said draft assessment order, the AO not only issued and served demand notice, but has also initiated the penalty proceedings. As relying on PERFETTI VAN MELLE (INDIA) PVT. LTD VERSUS THE A.C.I.T CIRCLE 3 (1) GURGAON [2020 (8) TMI 273 - ITAT DELHI] no hesitation to hold that the proceedings culminated on 21.12.2018 when the demand notice was issued and served upon the assessee and penalty proceedings were simultaneously initiated making all subsequent proceedings and orders non-est. Ground No. 1 of assessee allowed
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