TMI Blog2012 (10) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... t under section 144C, therefore it is not considered appropriate to deal with these questions in this writ petition. this Writ Petition on this hypothetical basis need to be rejected - leave it to the CIT(A) to use his discretion and judgment in this regard keeping in mind, of course the exigencies of his board and the nature of the other matters before him. It is desirable that the appeal is disposed of within six months from today. - WRIT PETITION NO. 1324 OF 2012 - - - Dated:- 4-9-2012 - S.J. VAZIFDAR AND M.S. SANKLECHA, JJ. J.D. Mistri, Niraj Sheth and Atul Jasani for the Petitioner. D.J. Khambatta and Abhay Ahuja for the Respondent. ORDER 1. Respondent No. 2 is the Union of India. The petitioner inter-alia seeks a writ of certiorari quashing an assessment order dated 29.2.2012 passed under section 143(3) of the Income Tax Act, 1961 in so far as it varies a draft assessment order dated 29.12.2011 passed under section 143(3) read with section 144C and makes additions and disallowances not made in the draft assessment order, a notice of demand dated 29.2.2012 issued under section 156 pursuant to the impugned assessment order and an order dated 19.3.2012 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any, of the Assessing Officer, Valuation Officer or Transfer Pricing Officer or any other authority; (e) records relating to the draft order; (f) evidence collected by, or caused to be collected by, it, (g) result of any enquiry made by, or caused to be collected by it. (7) The Dispute Resolution Panel may, before issuing any directions referred to in sub-section (5),- (a) make such further enquiry, as it thinks fit; or (b) cause any further enquiry to be made by any income-tax authority and report the result of the same to it. (8) The Dispute Resolution Panel may confirm, reduce or enhance the variations proposed in the draft order so, however, that it shall not set aside any proposed variation or issue any direction under sub-section (5) for further enquiry and passing of the assessment order. (9) If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be decided according to the opinion of the majority of the members. (10) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer. (11) No direction under sub-section (5) shall be issued unless an opportunity of being heard is gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achinery of the value of Rs.5.5 crores was transferred to the Baddi unit. The respondents allege that this was a false statement. The petitioner contends that it was an inadvertent error and that the same was clarified by a letter dated 29.12.2011. The petitioner contends that there was no intention to mislead or to conceal any facts, and that the transfer of the said machinery has no bearing on the deduction sought under section 80IC of the Act. As we are in any event, not inclined to entertain this writ petition, we do not intend expressing any opinion on the rival contentions between the parties including on this aspect. 6. On 29.11.2012, respondent no.1 passed a draft assessment order under section 144C. He made additions of Rs. 13.16 crores pursuant to his decision to allocate to the Baddi unit interest expenditure of Rs. 5.25 crores and expenditure for research and development of Rs. 8.38 crores. The learned Advocate General relied upon the fact that the draft assessment order stated that respondent No.1 had sent notices to various parties and that their replies thereto were awaited. 7. Mr. Mistri, the learned Senior Counsel appearing on behalf of the petitioner however ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 144C, an eligible assessee is entitled to file his objection before the AO and the Dispute Resolution Panel (DRP) to any variation that is made in the draft assessment order. The procedure then takes an entirely different route involving a determination by the DRP. The rights and contentions of the parties in respect of the decision of the DRP are also governed by section 144C and are at variance with those under the normal procedure for the assessment under section 143. An assessee could easily be denied the benefit of section 144C, if material changes are made to the draft assessment order and the assessee is denied any right to deal with the same under the provisions of section 144C. In a given case, the assessee may not file objections to a draft assessment order even though he does not agree with the variation made for a variety of reasons including for the reason that the tax effect on account thereof is minimal. If thereafter the AO is entitled to make further substantial and material variations and is permitted to pass a final assessment order, without affording the assessee any opportunity of dealing with the same under section 144C, it may render the provisions of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son, it is found otherwise, the petitioner would not be barred from filing a fresh writ petition or any other appropriate proceedings. 17. Mr. Mistri submitted that it is possible that his submission may be rejected and it may be held that an Assessing Officer has the power to pass an assessment order with variations prejudicial to the assessee even in respect of aspects not stated in the draft assessment order. In that event, he submitted it would be open to the petitioner to contend that the provisions of section 144-C are violative of Article 14 of the Constitution of India as it would lead to an unfair discrimination between assessees who are served with draft variation orders containing all the variations and assessees who are served with draft variation orders which contain only some variations and further variations are subsequently taken into consideration in the final assessment order without following the procedure under section 144-C. The latter would be deprived the benefit of section 144-C without any justification qua the additional variations. 18. We are not inclined to preclude the petitioner from raising this point in this petition merely because it has not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as the final assessment order dated 21st February, 2012, with a direction to the Assessing Officer to pass a fresh draft assessment order and to thereafter follow the procedure under section 144-C. The Advocate General further states that the Department will not challenge any order of the DRP in that event. The petitioner is, however, not willing to agree to this course in view of the rights which the petitioner contends have vested in it by virtue of what is transpired. The Advocate General's statement, therefore, does not require any further consideration and needless to add, will also, therefore, not prejudice the respondents in any manner. 23. In the circumstances, the writ petition is dismissed only on the ground that this is not a fit case to exercise jurisdiction under Article 226. Needless to add that the rights and contentions of the parties are kept open in any proceedings that have been adopted and that may be adopted hereafter. In the event of the petitioner filing an application for interim reliefs within three weeks from today, the impugned notice of demand shall not be implemented till the same is decided and for a period of four weeks after the service of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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