INCOME TAX ACT, 1961

Section 144C

Assessment - Transfer pricing - AO issued demand notice under section 156 while passing draft assessment order - Whether demand notice attached with draft assessment order made it a final order and consequently, assessment proceedings was illegal

Assessee was a partnership-firm engaged in business of manufacture and sale of Ayurvedic medicament and preparations. Assessee contended that AO issued demand notice under section 156 while passing draft assessment order, which was in contravention to scheme of section 144C(1) and said draft assessment order having effect of final assessment order was bad in law. Held: The question that boils down was whether notice of demand attached with draft assessment order would make said draft assessment order as final order and consequently, the whole assessment proceedings was liable to be quashed as illegal. Answer should be negative. As rightly pointed out by revenue, notice of demand issued along with the draft assessment order is a legal nullity and does not exist in the eyes of law, since no valid demand could be raised under draft assessment order. Thus, a document, which was held to be a legal nullity, cannot vitiate the assessment proceedings and the assessment order.

Distinguished:Jazzy Creations (P) Ltd. v. ITO [TS-52-ITAT-2016 (Mum)) : 2016 TaxPub(DT) 1588 (Mum-Trib), Control Risks India (P) Ltd. v. Dy. CIT [W.P.(C) 5722/2017 & C.M. No. 23860/2017, dated 27-7-2017] : 2018 TaxPub(DT) 4391 (Del-HC), Asstt. CIT v. Vijay Television (P) Ltd. (2018) 95 Taxmann.com 101 (Mad) : 2018 TaxPub(DT) 4576 (Mad-HC) and Pr. CIT v. Lionbridge Technologies (P) Ltd. (2018) 100 Taxmann.com 413 (Bom) : 2018 TaxPub(DT) 7995 (Bom-HC).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 92CA

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