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TMI Blog2023 (12) TMI 775X X X X Extracts X X X X X X X X Extracts X X X X ..... riya FZ, Sharja, UAE. A search and seizure operation u/s. 132 of the Act was conducted on M/s. Polisetty Somasundaram Group, Guntur, Andhra Pradesh on 28/01/2020. As a part of search operations conducted u/s. 132 of the Act, the business premises and residence of Shri Polisetty Sham Sundarwas also covered and search was conducted. The case was centralized to DCIT, Central Circle-1, Guntur vide order u/s. 127 of the Act issued by the CIT (International Taxation & Transfer Pricing), Hyderabad vide F.No. CIT(IT & TP)/40/127/2020-21 on 12/03/2021. Consequently, a notice u/s. 153C was issued on 21/12/2021 and served on the assessee on 23/12/2021. In response, the assessee-company filed its return of income declaring Rs. 5,73,66,823/- on 27/1/2022 admitting that Place of Effective Management [POEM] is applicable for the current Assessment Year 2018-19. Subsequently, notices u/s. 143(2) and 142(1) were issued and served on the assessee. The assessee filed its reply on 4/2/2022 and also filed part of the information on 21/2/2022 and 26/2/2022. Another notice u/s. 142(1) of the Act was issued on 28/03/2022. In response, the Assessee's Representative appeared and filed certain submissions be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the provisions of section 144C(1) of the IT Act, 1961, the Assessing Officer is mandated to first pass a draft assessment order, communicate it to the assessee, hear his objections and then complete the assessment. On the contrary, passing the final assessment order without complying this procedure, which is mandatory as per the provisions of section 144C of the Act, is without jurisdiction, null and void. The Ld. AR further submitted that the decision of the Hon'ble jurisdictional High Court (supra) was challenged by the Revenue before the Hon'ble Supreme Court by way of Special Leave Petition [SLP] and the Hon'ble Apex Court vide Special Leave (Civil) CC 16694/2013, dated 27/09/2013 dismissed the SLP. The Ld. AR also further placed reliance on the decision of the ITAT, "D" Bench, Chennai in the case of Daewon Kang Up Co. Limited vs. Deputy Director of Income Tax, International Taxation-1, Chennai in ITA No. 818/Mds/2015 (AY 2010-11), dated 30.12.2016. The Ld. AR also relied on the decision of the Hon'ble Delhi High Court in the case of Sinogas Management PTE Ltd vs. DCIT &Anr in W.P. (C) 1879/2023, dated 18/10/2023. Further, the Ld. AR also relied on the judgment of the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. It is the case of the Ld. AO that the Place of Effective Management [POEM] lies in India and hence the assessee shall be subjected to tax in India as per the Indian Income Tax provisions. However, while making the assessment, the Ld. AO has not followed the procedure mandated u/s. 144C of the Act in the case of the assessee. For the sake convenience and immediate reference, we hereby extract below the provisions of section 144C of the Act: "Reference to dispute resolution panel. 144C. (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 assesseeif 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 Dispute Resolution Panel; and (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23/12/2011 passed by the respondent is contrary to the mandatory provisions of section 144C of the Actand is passed in violation thereof.Therefore, it is declared as one without jurisdiction, null and void and unenforceable. Consequently, the demand notice dated 23/12/2011 issued by the respondent is set-aside." We also find from the submissions made by the Ld. AR that the SLP filed by the Revenue against the order of the Hon'ble High Court of Andhra Pradesh (supra) has been dismissed by the Hon'ble Supreme Court vide the judgment in Special Leave (Civil) CC 16694/2013, dated 27/09/2013. Further, the reliance placed by the Ld. AR in the case of M/s. CWT India Private Limited vs. ACIT (supra) the Hon'ble High Court of Bombay has observed as follows: "7. It is clear that the AO shall, in the first instance, forward a draft of the proposed order of assessment to the eligible assessee if he proposes to make any variation is prejudicial to the interest of such assessee. Certainly there is a variation in the assessment order different from what was filed in the return of income and since it is by way of an addition made, the variation is prejudicial to the interest of Petitioner. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... national India (P.) Ltd. v. Dy. CIT [2017] 82 taxmann.com 125/398 ITR 177(Delhi). xxxxxxxxxx 17. In the case of International Air Transport Association (supra), the Division Bench of this Court has held that the order passed by the Assessing Officer without their being any draft assessment order is illegal and without jurisdiction. The same view has been reiterated in the case of Zuari Cement Ltd. v. ACIT [WP(C) No. 5557 of 2012, dated 21-02-2013] by the Division Bench of Andhra Pradesh High Court which also held that the failure to pass a draft assessment order under Section 144C(1) of the Act would result in rendering the final assessment as one without jurisdiction. This position of law is settled. xxxxxxxxxx 20. In the case of JCB India Ltd. (supra) the Division Bench of the Delhi High Court in identical circumstances has held that after the remand on facts, the draft assessment order was necessary." (emphasis supplied) Further, the Hon'ble Delhi High Court in the case of Sinogas Management PTE Ltd (supra) has held as under: "11. For the foregoing reasons, we hold that failure by Respondent No.1 to adhere to the mandatory requirement of section 144C(1) of the Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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