TMI Blog2020 (3) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... l of section 144C of the Act, non-compliance with section in case of an eligible assessee cannot be considered to be a mere irregularity as has been argued by Ld. CIT-DR. Plethora of decisions referred to herein above and relied upon by Ld.AR supports this view. Admittedly, in present facts of the case, for years under consideration, the Ld.AO has not followed the mandate required under section 144C (1), wherein he is required to forward draft of proposed order of assessment to the eligible assessee, if he proposes to make any variation in the income or loss returned, which is prejudicial to the interest of assessee. This is a non-obstinate clause that gives an overriding effect to the procedure. Various Hon ble Court s in decisions r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Present cross appeals have been filed by assessee as well as revenue against order dated 27/02/2019 and 28/02/2019 passed by Ld.CIT (A)-2, Bengaluru for assessment years 2008-09 and 2009-10. Ground No. 1-2 raised by assessee is challenging validity of order passed by Ld.AO u/s. 143 (3) read with section 254 read with section 263 of the Act as under: A. Grounds of appeal relating to validity of order passed u/s. 143(3) r.w.s. 254 r.w.s. 263 of the ACT. 1. The Ld. CIT(A) has erred in not quashing the order passed u/s. 143(3) r.w.s. 254 r.w.s. 263 of the Act which is in violation of the mandate of section 144C of the Act; 2. The Ld. CIT(A) has erred in rejecting the Appellant s plea that the order passed u/s. 143(3) r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the failure to pass a draft assessment order, would violate 144C (1) of the Act. This is not a curable defect in terms of section 292B of the Act as held by this court in its decision dated 17/07/2015 in ITA No. 275/2015 Pr. CIT vs Citi Financial Consumer Finance India Pvt. Ltd.,. Therefore, is submitted that once the TPO s order is remanded back to the TPO/AO by the ITAT, the AO/TPO should have ideally passed the draft order considering the written submissions filed and not a final order and it is not curable defect as per the SC order. However, it is seen that the Hon ble tribunal had set aside the matter to the file of the AO in relation to the corporate tax matters pertaining to allowance of depreciation of networking equipment s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (decision dated 21st February, 2013 in WP(C) No. 5557/20212), the Division Bench (DB) of the Andhra Pradesh High Court. 7. Vijay Television (P.) Ltd., Vs. Dispute Resolution Panel [2014] 369 ITR 113 (Mad.). 8. ESPN Sports Mauritius S.N. C. ET Compagnie Vs. Union of India [2016] 388 ITR 383 (Del.). 5. On the contrary, Ld. CIT DR submitted that, there is nothing in the wording of section 144C (1) which would indicate that this requirement of passing draft assessment order in the remand proceedings of an issue by ITAT is to be satisfied. It was submitted that, assessment order cannot be considered to be invalid because even if there is any failure to pass draft assessment order u/s 144C of the Act the same is curable u/s. 292B o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2007-08 and vide order dated 10/10/2014 in ITA (TP) A No. 116/B/2014, remanded corporate tax issue pertaining to depreciation allowable on audio-visual equipments as well as transfer pricing issue regarding international transaction of availing administrative services by assessee from its AE to Ld.AO/TPO for readjudicating afresh. Ld.TPO vide separate orders dated 28/03/2016 computed proposed adjustment at ₹ 2,16,37,189/- for assessment year 2008-09 and for assessment year 2009-10 proposed adjustment was computed at ₹ 7,35,53,154/-. For assessment year 2008-09 Ld.TPO passed final assessment order dated 13/03/2016 u/s. 143 (3) r.w.s.254 r.w.s.263 of the Act computing addition and issuing demand notice and cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act is of great importance. It has been held that, when an assessing officer proposes to make variation to the returned income declared by an eligible assessee, he has to first pass draft order, provide a copy thereof to assessee and only thereupon the assessee could exercise the right under 144C (2) of the Act to raise objections before DRP on proposed variations. This requirement the courts has been held to be mandatory that gives substantive rights to 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. We therefore reject the argument of Ld. CIT DR that failure to adhere to requirement under 144C (1) is curable defect u/s. 292B of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
