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2023 (12) TMI 775 - ITAT VISAKHAPATNAMValidity of assessment order against appellant/foreign company without issuing a draft assessment order as mandated u/s 144C - Scope of term “eligible assessee”- Reference to dispute resolution panel - HELD THAT:- It is an admitted fact that the assessee-company is a Foreign Company within the meaning of the provisions of section 144C(15)(b)(ii) of the Act. Further, the assessee-company is also an “eligible assessee” as defined in section 144C(15) of the Act. It is the case of the Ld. AO that the Place of Effective Management [POEM] lies in India and hence the assessee shall be subjected to tax in India as per the Indian Income Tax provisions. However, while making the assessment, the Ld. AO has not followed the procedure mandated u/s. 144C of the Act in the case of the assessee. It is a fact that the assessee is a foreign company. Therefore, as per section 144C(1) of the Act, the Ld. AO is duty bound to pass the Draft or Proposed Assessment Order and shall forward the same to the ‘eligible assessee’ to enable the assessee to file the objections, if any, before the Dispute Resolution Panel. However, in the instant case, the Ld. AO has not passed the Draft Assessment Order, as mandated u/s. 144C(1) of the Act, before making the assessment and passed the Final Assessment Order. Therefore, AO has not followed the procedure laid down u/s. 144C(1) of the Act and passed the final assessment order. It was incumbent on the part of the Ld. AO to have passed a Draft Assessment Order to adhere to the mandatory requirement of section 144C(1) of the Act otherwise it would result in invalidation of the final assessment order and the consequent demand and penalty also. Failure on the part of the Ld. AO to pass a draft assessment order u/s. 144C(1) of the Act would vitiate the final assessment order as one without jurisdiction. Assessment order passed by the Ld. AO in the case of the assessee is without jurisdiction and in violation of the mandatory provisions of section 144C(1) of the Act and therefore the assessment order passed u/s. 153C of the Act is null and void and unsustainable in law. Decided in favour of assessee.
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