TMI Blog2019 (6) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... g Draft Assessment Order u/s. 144C(1) is in violating of provisions of section 144C and hence, such final assessment order is unsustainable. Thus assessment order issued along with notice of demand u/s. 156 and notice of penalty u/s. 271(1)(c) is passed in violation of mandatory provisions of section 144C of the Act. - Decided in favour of assessee. - ITA No.2344/PUN/2012 - - - Dated:- 3-6-2019 - Shri D. Karunakara Rao, AM And Shri Vikas Awasthy, JM For the Assessee : Shri Nikhil Pathak For the Revenue : Shri S.B. Prasad ORDER PER VIKAS AWASTHY, JM : This appeal by the assessee is directed against the assessment order dated 31-10-2012 passed u/s. 143(3) r.w.s. 144C of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for the assessment year 2008-09. 2. The assessee in appeal apart from challenging the additions on merits has raised additional grounds assailing validity of Assessment Order (Draft Assessment Order) dated 28-12-2011. Since, the assessee has challenged the validity of Assessment Order itself, therefore, before adverting to the grounds challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order the Assessing Officer issued notice of demand u/s. 156 of the Act and notice u/s. 271(1)(c) of the Act for initiating penalty proceedings. 3.1 The ld. AR pointed that though in the title of order it is mentioned as Draft Assessment Order but in fact it is final assessment order as the Assessing Officer had issued notice of demand u/s. 156 and notice of penalty u/s. 271(1)(c) along with the order. In effect the Assessing Officer passed the final assessment order without affording opportunity to the assessee to file objections before the DRP. Thus, the assessment order dated 28-12-2011 passed by the Assessing Officer is in violation of provisions of section 92CA of the Act. 3.2 The ld. AR further submitted that the assessee had filed objections before the DRP against the alleged Draft Assessment Order and the same were disposed of by the Dispute Resolution Panel (DRP) and thereafter the alleged final assessment order dated 30-10-2012 was passed but proceedings subsequent to the assessment order dated 28-12-2011 are vitiated after issuance of demand notice u/s. 156 and the notice of penalty u/s. 271(1)(c) of the Act. The ld. AR pointed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting penalty proceedings u/s. 271(1)(c) along with the Draft Assessment Order dated 28-12-2011, the Draft Assessment Order become the final assessment order. The failure of Assessing Officer to pass Draft Assessment order is in violation of provisions of section 144C(1) of the Act. 6. It is no more res integra that final assessment order passed without passing Draft Assessment order is unsustainable and the subsequent proceedings if any arising there from are vitiated. In the instant case, the facts are peculiar where the Draft Assessment Order has been passed and thereafter the assessee has filed objection before DRP. After the directions of DRP, final assessment order has also been passed. However, the Assessing Officer committed an error in issuing demand notice u/s. 156 and notice of penalty proceedings u/s. 271(1)(c) along with the Draft Assessment Order. The demand notice u/s. 156 and notice initiating penalty proceedings u/s. 271(1)(c) are issued only after passing of final assessment order. Since, the said notices were issued by the Assessing Officer along with the Draft Assessment Order, the said assessment order partake the character of final assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s High Court in Assistant Commissioner of Income Tax v/s. Vijay Television (P) Ltd., 407 ITR 642. In the above case, non issue of Draft Assessment Order could not be corrected by issuing a corrigendum to a final Assessment Order. Just as in the facts before the Madras High Court, here also the demand notice and institution of pending proceedings were not withdrawn by the corrigendum. Besides, in International Air Transport Association v/s. Deputy Commissioner of Income Tax 68 taxmann.com 246 - this Court has held that the Draft Assessment Order is necessary in terms of Section 144 C(1) of the Act before the Assessing Officer can proceed to pass a final Assessment Order. In the absence thereof, the order is without jurisdiction. So far the contention on behalf of the Revenue that the Respondent was estopped from challenging the corrigendum dated 16th April, 2004, as it was accepted by it and a representation also filed to the DRP. This submission overlooks the fact that there can be no estoppel on issue of law pertaining to jurisdiction. Therefore, if the corrigendum dated 16 th April, 2014 and the order dated 12th March, 2014 of the Assessing Officer is without jurisdiction, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, the same constitutes an assessment order final in all respects. After the appeals were filed before the CIT(A), Aurangabad, the Assessing Officer made a mistake of undoing the same by making good of said mistake i.e. not making a draft assessment order in accordance with the provisions of section 144C of the Act. The attempts of making correction by issue of letters/notices, the Assessing Officer made a mistake of not withdrawing original demand notices and penalty notices. We also perused the written note along with discussed case laws furnished by the assessee in the Court. On finding the relevant of the same, we proceed to extract the said case laws as follows :- a. International Air Transport Association vs. DCIT [68 taxmann.com 246 (Bombay)]. b. Nokia India Pvt. Ltd. vs. Addl.CIT [98 taxmann.com 373 (Delhi)]. c. ACIT vs. Vijay Television Pvt. Ltd. [46 taxmann.com 100 (Madras)]. d. DCIT vs. Rehau Polymers Pvt. Ltd. [85 taxmann.com 23(Pune)]. e. Sandvik Asia P. Ltd. vs. DCIT [ITA No.465 607/PN/14]. f. Walter Tools India Pvt. Ltd. vs. ACIT [ITA No.416/PN/14]. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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