TMI Blog2023 (9) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... we hereby quash and set aside the directions issued by DRP and the consequent assessment order. - K. R. SHRIRAM DR. N. K. GOKHALE, JJ. For the Petitioner : Mr. Riyaz Padvekar a/w. Mr. Tanzil Padvekar and Ms. Tejal Kharkar. For Respondents : Mr. Suresh Kumar. ORAL JUDGMENT (PER K.R. SHRIRAM, J.) : 1. Rule. Rule made returnable forthwith. By consent, the petition is taken up for final hearing at the admission stage. 2. Prayer clause (a) in this petition reads as under : (a) issue a Writ of Certiorari or Writ in the nature of Certiorari or any other appropriate writ, directions or order under Article 226 of the Constitution of India, declaring the Orders passed by the Respondent No. 1 under Sec. 144C(5) dated 16/09/2019 and the Respondent No. 2 under Sec. 143(3) r.w.s. 144C(13) dt. 31/10/2019 as without valid authority of law, illegal and void ab initio and to pass order quashing both the impugned Orders. 3. Petitioner filed its return of income for Assessment Year 2015- 2016 under Section 139(1)/(3) of the Income Tax Act, 1961 (the Act) on 30th September 2015 declaring loss of Rs.11,69,32,126/-. Petitioner also filed auditor s repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) impugning the assessment order dated 24th December 2018. Notwithstanding this, DRP proceeded to issue the directions dated 16th September 2019 based on which another assessment order dated 31st October 2019 came to be passed. The DRP s directions and this assessment order dated 31st October 2019 is what is impugned in this petition. 5. It is petitioner s case that the directions dated 16th September 2019 passed by respondent No. 1 DRP was in gross violation of the provisions of the Act in as much as the DRP can hear and pass directions only in pending assessment proceedings. When the Assessing Officer has passed an assessment order dated 24th December 2018 albeit illegally, without waiting for the mandatory period of 30 days specified in sub-section 2 of Section 144C of the Act, the DRP has no role to play and should not have passed the directions dated 16th September 2019. 6. Mr. Padvekar submitted that : (a) Section 144C(2) of the Act provides that on receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order, either file his acceptance of the variations to the Assessing Officer or file his objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cember 2018, the DRP was well within its jurisdiction to pass the directions on 16th September 2019. Therefore, the assessment order passed on 31st October 2019 was correct order. 8. We are unable to accept this second limb of Mr. Suresh Kumar s submissions that the second assessment order dated 31st October 2019 or the directions given by DRP on 16th September 2019 under Section 144C(5) of the Act are valid. 9. Section 144C of the Act reads as under : 144C. Reference to dispute resolution panel. - (1) The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation which is prejudicial to the interest of such assessee. (2) On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order, - (a) file his acceptance of the variations to the Assessing Officer; or (b) file his objections, if any, to such variation with,- (i) the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble assessee]. (9) If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be decided according to the opinion of the majority of the members. (10) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer. (11) No direction under sub-section (5) shall be issued unless an opportunity of being heard is given to the assessee and the Assessing Officer on such directions which are prejudicial to the interest of the assessee or the interest of the revenue, respectively. (12) No direction under sub-section (5) shall be issued after nine months from the end of the month in which the draft order is forwarded to the eligible assessee. (13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained in section 153 [or Section 153B], the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received. xxxxxxxxxxxxxxxxxxxx (15) For the purposes of this s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 144C of the Act which says upon receipt of the directions issued under sub-section 5, the Assessing Officer shall, in conformity with the directions, complete, . the assessment ... . Therefore, the DRP could give directions only in pending assessment proceedings. Once assessment order is passed, rightly or wrongly, the assessment proceedings come to an end. Therefore, the DRP would have no power to pass any directions contemplated under subsection 5 of Section 144C of the Act. 11. While concluding, Mr. Suresh Kumar submitted that in view of what is stated in the affidavit in reply where respondents have admitted that the assessment order dated 24th December 2018 could not have been passed, the appeal pending before the CIT (A) will naturally get allowed/the assessment order would get set aside. That would result in the Revenue not able to pass assessment order under Section 143(3) of the Act or even under Section 147 of the Act. The Rajasthan High Court in Sudesh Taneja V/s. ITO 442 ITR 289 held that (a) taxing statute must be interpreted strictly. Equity has no place in taxation. Nor while interpreting taxing statute intendment would have any place. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering a question whether an ambiguity in a tax exemption provision or notification, the same must be interpreted so as to favour the assessee. Making a clear distinction between a charging provision of a taxing statute and exemption notification which waives a tax or a levy normally imposed, the Supreme Court observed as under :- 14. We may, here itself notice that the distinction in interpreting a taxing provision (charging provision) and in the matter of interpretation of exemption (98 of 113) [CW-969/2022] notification is too obvious to require any elaboration. Nonetheless, in a nutshell, we may mention that, as observed in Surendra Cotton Oil Mills Case, in the matter of interpretation of charging Section of a taxation statute, strict Rule of interpretation is mandatory and if there are two views possible in the matter of interpretation of a charging section, the one favourable to the Assessee need to be applied. There is, however, confusion in the matter of interpretation of exemption notification published under taxation statutes and in this area also, the decisions are galore. 24. In construing penal statutes and taxation statutes, the Court has to apply strict R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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