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TMI Blog2025 (5) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... 0A/2024- 25/1074766070(1) issued by the 1st Respondent for the assessment year 2022-23; (d) pass such other or further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity." 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record 3. In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner submits that in relation to assessment year 2022-2023, returns of the income filed by the petitioner was selected for scrutiny assessment and in the course of proceedings, Transfer Pricing Officer (TPO) passed an order under Section 92CA(3) of the Income Tax Act (for short 'IT Act'), determining a transfer pricing adjustment. It is contended that under Section 144C of the IT Act, in a case where variation is proposed to the income as a consequence of the order of TPO, the person is treated as an 'eligible assessee' in the first instance and a draft assessment order under Section 144C is required to be passed, against which, the 'el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the draft assessment order dated 29.03.2021 was issued to the petitioner, the petitioner had two options viz., either to file his acceptance as provided under sub-section (2)(a) or to file objections as per sub-section (2)(b) of the I.T. Act. 4. It is contention of the petitioner that the petitioner submitted his objections on 26.04.2021 to the Dispute Resolution Panel (DRP) within the prescribed period; in view of change in the mechanism of assessment being shifted to the faceless scheme coupled with the Covid-19 pandemic exigency, the petitioner could not intimate the Assessing Officer about filing of the objections before the DRP; however, petitioner intimated the same to the Assessing Officer on 30.04.2021. It is the grievance of the petitioner that the despite the petitioner submitting his objections to the draft assessment order before the DRP as well as intimating the same to the Assessing Officer, the Assessing Officer proceeded to pass the impugned assessment order without following the mandatory procedure prescribed in sub-sections (5) to (13) of Section 144C and without awaiting directions from the DRP as provided in the said provisions. It is also contended that by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts extending the period of limitation. At any rate, the petitioner had chosen to exercise the option of filing objections to the draft Assessment Order warranting the DRP to proceed further before the Assessing Officer takes further steps as provided under sub-sections 5 to 13 to Section 144C. Under these circumstances, I am of the considered opinion that the impugned Assessment Order passed by respondent No.1- Assessing Officer without awaiting directions from the DRP, before whom the matter was pending pursuant to the petitioner filing his objections within the prescribed period is clearly arbitrary, illegal and without jurisdiction or authority of law and the same deserves to be quashed and necessary directions are to be issued to the DRP as well as the Assessing Officer in this regard. 8. In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) The impugned assessment order bearing No.ITBA/AST/S/143(3)/2021-22/1-3283 0156(1) at Annexure-A dated 30.04.2021, demand notice bearing No.ITBA/AST/S/156/2021-22/10327391 81(1) at Annexure- B dated 30.04.2021 and notice bearing No. ITBA/PNL/S/270A/2021-22/1032739213 (1) at Annexure-C dated 30.04.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d non-est is required to be set aside. The observations at paragraph No.3.0 at Annexure- A4 is extracted as follows: "In view of the above, the Panel opines that the DRP, according to Section 144C, has jurisdiction only over the Draft Assessment Orders and not over Final Assessment Orders. In the present case as the Final Assessment order predates the DRP directions, the said DRP directions become infructuous and non-est." 4. It is submitted that the assessment order will have to be set aside in light of the directions issued by the DRP at Annexure-N and the matter will have to be proceeded afresh in terms of Section 144C (13) of the Act. 5. Sri. M. Dilip, learned counsel appearing for the revenue on the other hand would point out that under Section 144C (2)(b)(ii), there is an obligation on the assessee to keep the assessing officer informed regarding filing of objections before the DRP and if such procedure is not adhered to strictly, no fault can be found as regards the assessing officer having proceeded to finalise the proceedings and passing the assessment order on the basis of draft order while construing as if no objections were filed. It is also submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te under Section 144C (13). Accordingly, nonintimation to the assessing officer under Section 144C (2)(b)(ii) though is a lapse on the part of the petitioner, the only way of meaningfully and harmoniously interpreting the obligation of filing objections under Section 144C (2)(b)(ii) is to construe the procedure that once such objections are filed before the DRP and till the decision is taken by the DRP regarding directions to be passed, the assessing officer ought not to proceed further. This is the procedure to be followed. In the present case where objections no doubt have been filed before the DRP and directions passed though at a later point of time, in light of the manner of construing the procedure the assessing officer ought not to have proceeded and ought to have waited till directions were passed by the DRP, as the directions have though been subsequently passed on 15.05.2023. Accordingly, the assessment order is required to be set aside. In light of the above, the assessment order at Annexure-A1 is set aside. Consequently, the computation sheet at Annexure-A2 and the demand notice at Annexure- A3 are set aside. 12. Insofar as the communication at Annexure-A4 is concern ..... X X X X Extracts X X X X X X X X Extracts X X X X
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