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2021 (11) TMI 381 - HC - Income TaxApplicability of provision of section 144C - breach to pass draft assessment order before issuing the final order - HELD THAT:- It was mandatory for the Assessing Officer to have passed draft assessment order under Section 144C of the Act prior to issuing of the final assessment order, issuance of final assessment order sans the draft order is bad in law. In the light of these judgments and perusing the circular instructions, which has been relied upon by the learned counsel for the Revenue that the provisions of Section 144C of the Act would be applicable to any order which proposed to be variation in income or loss returned by the eligible assessee, irrespective of the Assessment Year to which it pertains, it is mandatory that the draft of the proposed order of assessment has to be passed by the Assessing Officer even after remand from the Tribunal. The interpretation of the Revenue inasmuch as the phrase ‘at the first instance’, is wholly misconceived. The mandatory requirement of passing draft order has to be strictly adhered to, irrespective of the remand order passed by the Tribunal. Having regard to the language employed by the legislature under Section 144C of the Act, it is mandatory to the Assessing Officer to pass draft assessment order before issuing the final order, breach of the same would result in violation of the principles of natural justice making the order itself void ab-initio. It is well settled law, if the order of the assessment itself is not valid then the further action of the Commissioner in initiating revision proceedings under Section 263 is not valid in the eye of law - substantial questions of law No.1 and 2 are answered in favour of the assessee and against the Revenue Revision u/s 263 - Whether Tribunal is right in law in dismissing Revenue’s appeal by holding that assessment order itself has been quashed and as such order passed under section 263 of the Act does not arise? - HELD THAT:- Issue decided in favour of assessee as relying on M/S. CISCO SYSTEMS CAPITAL (INDIA) PVT. LTD., [2021 (7) TMI 121 - KARNATAKA HIGH COURT]
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