2023 (1) TMI 923 - AT - Income Tax
Assessment u/s 144C - Reference to Dispute Resolution Panel - AO passed the draft assessment order by designating it as the 'Assessment Order' under section 143(3) of the Act and also issued demand notice u/s 156 and initiated penalty proceedings - As argued AO had not passed any assessment order pursuant to the order of the DRP - As per assessee AO failed to follow the procedures prescribed under section 144C for passing draft assessment order and passed a draft assessment order along with demand notice and initiated penalty proceedings and issued penalty notice - HELD THAT:- In the present case, instead of passing the draft assessment order under section 144C(1) Assessing Officer had passed the assessment order, in derogation of the mandatory provisions of the Act.
Assessing Officer in his communication had acknowledged that the Assessing Officer was to pass the draft assessment order instead of the assessment order passed by him. In our view the law with respect to the passing of the assessment order pursuant to the direction of the ld.DRP is fairly settled and is no more res integra. Section 144C(10) r.w.s. 144(13) mandates the AO to pass the assessment order after receiving a direction.
Further, in our opinion, the law mandates that if an Act is required to be done in the particular manner, it should be done in that manner or not. Further, during the course of argument, it was submitted that the draft assessment order/assessment order dated 26.02.2021 was passed by NFAC and window was not opening for passing the final assessment order and thereby giving effect to the directions of the DRP. In our view, it is for the revenue to devise its own means and ways to correct the software and pass the final assessment order in accordance with the law. In the present case, the AO had straight way passed the assessment order instead of passing the draft assessment order as per section 144C(1) of the Act and further, the Assessing Officer has not passed the final order as per section 144C(10) of the Act. In view of the above, we find that the assessee has made out a case on quashing the entire assessment order being passed in violation of the mandatory provisions of the law. See Aker Powergas Pvt.Ltd [2022 (6) TMI 1118 - ITAT MUMBAI] - Decided in favour of assessee.