TMI Blog2018 (7) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order which has invoked Section 143(3)and also Section 144C of the Act. This invocation of Section 144C has taken place as the Assessing Officer is of the view that it applies, then the requirement of Section 144C(1) has to be complied with before he can pass the impugned order invoking Section 144C(13). Section 144C(13) of the Act can only be invoked in cases where the assessee has approached the DRP in terms of sub- Section 144(C)(2)(b) of the Act and the DRP gives direction in terms of Section 144C(5) of the Act. In this case, the assessment order has invoked Section 144C(13) of the Act without having passed the necessary draft Assessment Order under Section 144C(1) of the Act, which alone would make an direction under Section 144 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 31st January, 2018 disposes of the assessment for Assessment Year 2011-12. 3. At the outset, the Revenue contended that, this petition should not be entertained as an alternate remedy of an Appeal under the Act from the impugned order is available. It is the petitioner's case that the impugned order is without jurisdiction as it has been filed in the face of the mandatory provisions of Section 144C of the Act. We would therefore examine the contention of the petitioner and if the same is found to be correct, then the plea of invoking the self impose rule of not entertaining the petition as an alternate relief is available will not apply. It is a settled position in law that where the order challenged is without jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 144C(15) of the Act, which includes Foreign Company. Therefore, in terms thereof, the petitioner is entitled to a draft assessment order being passed under Section 144(1) of the Act before the final assessment order as passed in this case under Section 143(3) read with Section 144(13) of the Act being the impugned order. Thus, the impugned order dated 31st January, 2018 ignores the mandate of Section 144C of the Act. Resultantly, it takes away the petitioner's right to object to the Draft Assessment Order before the DRP. Therefore, taking away a valuable right of the petitioner before the Assessing Officer passes a final order which can be subjected to appellate proceedings. In support, reliance was placed upon the decisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above Section 144C of the Act, which provides a separate scheme for the manner in which the Assessing Officer would pass assessment orders under the Act and a separate procedure to challenge an draft order i.e. before an assessment order which is subject to appeal under the Act is passed. The entire object is to ensure that the disputes of Foreign Companies are resolved expeditiously and final assessment orders are not passed without a re-look to the proposed order (draft order), if so desired by the Foreign Company. In essence, it obliges the Assessing Officer to first pass a draft of the proposed assessment order indicating the proposed variation in the income returned. This draft Assessment Order is to be passed under Section 144C(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pass a draft assessment order under Section 144C(1) of the Act. According to us, the Assessing Officer, is obliged to, in terms of Section 144C of the Act to pass a Draft Assessment Order in all cases where he proposes to assess the Foreign Company under the Act by making a variation in the returned income. In this case, the impugned order dated 31st January, 2018 has been passed in terms of Section 143(3) read with Section 144C read with Section 254 of the Act and it certainly makes a variation to the returned income filed by the petitioner. This even if, one proceeds on the basis that the returned income stands varied by the order of the Tribunal in the first round, to the extent the petitioner accepts it. Therefore, the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an direction under Section 144C(5) of the Act by the DRP possible. Thus, the impugned order is completely without jurisdiction. 10. Moreover, so far as a Foreign Company is concerned, the Parliament has provided a special procedure for its assessment and appeal in cases where the Assessing Officer does not accept the returned income. In this case, in the working out of the order dated 5th May, 2017 of the Tribunal results in the returned income being varied, then the procedure of passing a draft assessment order under Section 144C(1) of the Act is mandatory and has to be complied with, which has not been done. 11. In the above view, the impugned order is without jurisdiction. Thus, the plea of alternate remedy advanced by the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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