|The Tax Publishers2020 TaxPub(DT) 5579 (Kol-Trib)
INCOME TAX ACT, 1961
Where AO passed draft assessment order as per section 144C(1) and assessee preferred objection before DRP within 30 days of receipt of said order, AO had to await decision of DRP as envisaged under sub-section (5) of section 144C. As AO failed to await for direction of DRP and arbitrarily framed final assessment order, which vitiated the final assessment order passed by him.
Assessment - Transfer pricing - Validity - Framing of final assessment order without awaiting for direction of DRP as regards objections filed by assessee to draft assessment order
AO passed draft assessment order under section 144C on 28-12-019. Assessee filed objections before Dispute Resolution Panel (DRP) on 4-1-2020 and intimation was given by AO regarding the objections filed before the DRP on 27-1-2020. AO passed final assessment order under section 143(3) on 27-1-2020. Assessee's case was that AO could not have framed final assessment order on 27-1-2020. Held: Draft assessment order as per section 144C(1) was passed on 28-12-2019 and assessee had time of 30 days from the date of receipt of draft order to file objection before DRP as per sub-section (2)(b) or acceptance of draft assessment order as per sub-section (2)(a) of section 44C. In any case, this period of time, i.e., 30 days gets over on 27-1-2020. Meanwhile, assessee had preferred an objection before the DRP within 30 days receipt as per sub-section (2)(b) of section 144C on 24-1-2020 which fact was intimated to AO by physically filing the letter dated 27-1-2020 at the office of AO, so in this situation AO ought to have awaited decision of DRP as envisaged under sub-section (5) of section 144C and which direction of DRP was binding on AO as per sub-section (13) of section 144. In this case, AO failed to await for direction of DRP and arbitrarily framed final assessment order which vitiated final assessment order passed by him.
FAVOUR : In assesses favour.
IN THE ITAT, KOLKATA BENCH
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