TMI Blog2017 (8) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... inding on the Assessing Officer. It is therefore not possible to uphold the Revenue’s contention that such requirement is merely procedural. The requirement is mandatory and gives substantive rights to the assessee to object to any additions before they are made and such objections have to be considered not by the Assessing Officer but by the DRP. Reference by the Revenue to the circulars dated 03.06.2010 and 19.11.2013 in this regard would be of no avail. First of these circulars was an explanatory circular issued by the Finance Ministry in which it was provided that these amendments (which included Section 144C of the Act) are made applicable with effect from 01.10.2009 and will accordingly apply in relation to assessment year 2010-11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of natural justice would have been better served if the ITAT had set aside the assessment order u/s. 143(3) of the Act to the file of the Assessing Officer with a direction to make fresh assessment after following the procedure laid down in Section 144C of the Act, since the Assessing Officer had merely followed Board s Circular No. 05 of 2010 dated 03.06.2010 which was binding on him and Board s Circular No. 09 of 2013 dated 19.11.2013 was not in existence on the date of passing order u/s. 143(3) of the Act i.e. 22.02.2013? ( C ) Whether on the facts and circumstances of the case and in law, the ITAT erred in not setting aside the assessment order u/s. 143(3) to the file with a direction to pass fresh assessment order u/s. 143(3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision (supra) and Andhra Pradesh High Court in the case of Zuari Cement Ltd vs. ACIT respectively? 2. The facts are not in dispute and can be summarized as under: 2.1 For the assessment year 2009-10, the return of the assessee was taken in scrutiny by the Assessing Officer. The assessee was subjected to transfer pricing regime on account of its international transactions with associated persons. Against the returned income of Nil, the Assessing Officer in the order of assessment dated 22.02.2013 computed the assessee s income at ₹ 2.86 crores (rounded off) by making various additions and deletions as per the order of the Transfer Pricing Officer. The assessee challenged such additions on the ground that the procedure laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and ESS Distribution (Mauritius) S.N.C. Et Compagnie vs. Union of India and Another reported in [2016] 388 ITR 383 (Delhi) though was not strictly concerned with the issue at hand, however, held and observed that the Assessing Officer is bound by the orders passed by the Dispute Resolution Panel and the order passed by the Assessing Officer disregarding such order is ab-initio void. 5. Section 144C of the Act refers to the Dispute Resolution Panel. Sub-section (1) of Section 144C provides that in case of an eligible assessee, the Assessing Officer shall notwithstanding anything to the contrary contained in the Act forward a draft of the proposed order of assessment to the assessee if he proposes to make on or after 01st day of October, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P under sub-section (5), the Assessing Officer shall in conformity with the directions complete the assessment without providing any further opportunity of being heard to the assessee. 6. These statutory provisions make it abundantly clear that the procedure laid down under Section 144C of the Act is of great importance and is mandatory. Before the Assessing Officer can make variations in the returned income of an eligible assessee, as noted, sub-section (1) of Section 144C lays down the procedure to be followed notwithstanding anything to the contrary contained in the Act. This nonobstante clause thus gives an overriding effect to the procedure notwithstanding anything to the contrary contained in the Act . Sub-section (5) of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer, the directions of the DRP under sub-section (5) of Section 144C would bind even the assessee. He may of course challenge the order of the Assessing Officer before the Tribunal and take up all contentions. Nevertheless at the stage of assessment, he has no remedy against the directions issued by the DRP under sub-section (5). All these provisions amply demonstrate that the legislature desired to give an important opportunity to an assessee who is likely to be subjected to upward revision of income on the basis of transfer pricing mechanism. Such opportunity cannot be taken away by treating it as purely procedural in nature. 8. Reference by the Revenue to the circulars dated 03.06.2010 and 19.11.2013 in this regard would be of no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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