TMI Blog2015 (6) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly we set aside the impugned assessment order.- Decided in favour of assessee. - I.T.A. No.1041/Mum/2015, ITA No.1278/Mum/2015 - - - Dated:- 29-5-2015 - S/SHRI VIJAY PAL RAO AND B.R.BASKARAN, JJ. For the Appellant : Shri Ajit Kumar Jain For the Respondent : Shri N R Chand ORDER PER B.R.BASKARAN (AM) These cross appeals have been filed by the parties challenging the order dated 09-01-2015 passed by the assessing officer u/s 143(3) r.w.s. 144C(13) and 254 of the Income tax Act, 1961 (proviso 4 to sec. 153(2A) of the Act) and they relate to the assessment year 2007-08. 2. We shall first take up the appeal filed by the assessee. At the time of hearing, the Ld A.R did not press the grounds numbered as 4, 5, 5.1 and 6 and accordingly they are dismissed as not pressed. The grounds numbered as 1 and 2 relate to the validity of the assessment order passed by the assessing officer. We heard the parties on this preliminary issue. 3. The assessee company is engaged in the business of Design, Development and export of computer software, software solutions and providing information technology enabled services and related services. The assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2A) of the Act was incorrectly mentioned and the same be read as 144C(1) r.w.s. 143(3) of the Act. Also the order giving effect to ITAT s order dated 25.01.2012 be read as Draft Assessment Order. This Corrigendum be read alongwith order passed on 12/03/2014 by DCIT-8(2), Mumbai. Later, the assessee filed objections before DRP and the DRP issued directions dated 05-12-2014 u/s 144C(5) of the Act. The assessing officer, thereafter passed the assessment order dated 09-01-2015 u/s 143(3) r.w.s. 144C(13) r.w.s. 254 of the Income tax Act, 1961 (proviso 4 to sec. 153(2A) of the Act). 5. The assessee has filed the present appeal challenging the assessment order dated 09-01-2015, referred above. 6. The Ld Counsel appearing for the assessee submitted that the provisions of sec. 144C(1) of the Act mandates that the AO shall, in the first instance, forward a draft of the proposed order of assessment to the eligible assessee. He submitted that the assessing officer, in the instant case, has passed the final assessment order on 12.03.2014 without adhering to the mandate of the provisions of sec. 144C(1) of the Act. He further submitted that the assessing officer has issued a Corrigend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der , the same shall not become final assessment order. The Ld D.R submitted that the provisions of sec. 144C(1) of the Act mandates the assessing officer to pass initially draft assessment order only and hence the AO cannot ignore the said mandate. Hence the assessment order dated 12.03.2014 passed by the AO should be construed as Draft assessment order only, which was passed in accordance with the provisions of sec. 144C(1) of the Act. He further submitted that the provisions of sec. 292B shall come to the rescue of the AO for the error committed in not mentioning the order as Draft assessment order . 8. With regard to the time limit prescribed u/s 153(2A) of the Act, the Ld D.R submitted that the provisions of sec. 144C(13) overrides the provisions of sec. 153 and hence the time limit prescribed u/s 153(2A) does not apply to the present proceedings. He further submitted that the third proviso to sec.153(2A) prescribes two year period for completion of assessment consequent to the directions given by the ITAT. He submitted that the Tribunal has passed the order in January, 2012 and it is not clear from the record as to whether the Commissioner has received the order by Marc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld have forwarded the copy of the Draft order to the assessee in terms of sec. 144C(1) of the Act. Apparently, the assessing officer did not do so, but instead passed the final assessment order on 12-03-2014 by raising demand upon the assessee. Further the assessing officer also issued the Notice of Demand and also the Penalty notice u/s 271(1)(c) of the Act. These two notices clearly bring out the fact that the assessing officer has passed the final assessment order only on 12-03-2014. We have already noticed that the assessing officer himself has observed that the time limit for completing the present assessment was 31.3.2014 as per the third proviso to sec. 153(2A) of the Act. Hence, it appears that the assessing officer has rushed to complete the assessment by that date and hence it appears that he has passed the assessment order on 12.03.2014 and since he considered the same to be the final order, he has issued notice of demand as well as the penalty notice. 12. The sequence of events narrated above would show that the assessing officer has failed to follow the directions given by the Tribunal in its order dated 25-01-2012. We have already noticed that the Tribunal has made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding the draft assessment order as per the provisions of sec. 144C(1) of the Act. The Hon ble Andhra Pradesh High Court held that the said assessment order is contrary to them mandatory provisions of sec. 144C of the Act and is passed in violation thereof. Accordingly the High Court held that it is without jurisdiction, null and void and unenforceable. It is pertinent to note that the Special Leave petition filed by the revenue before the Hon ble Supreme Court challenging the order of the Hon ble Andhra Pradesh High Court has been dismissed by the Hon ble Apex Court, vide its order dated 27-09-2013 passed in CC 16694/2013. 16. In the case of Vijay Television Private Ltd (supra), the assessing officer passed the assessment order on 26.3.2013 without passing a draft assessment order as per the provisions of sec. 144C(1) of the Act. Later the AO issued a corrigendum on 15.04.2013 modifying the final assessment order passed on 26.03.2013 to be read as Draft assessment order . The Hon ble Madras High Court noticed that the AO had issued Demand notice raising tax demand upon the assessee. Further, the High Court noticed that the AO has failed to withdraw the demand raised upon the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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