Shanti Prime Publication Pvt. Ltd.
Sec. 144C of Income Tax Act, 1961 – Assessment – Issuance of a draft assessment order was necessary.
Facts: Assessee had taken an additional ground before the Tribunal that the order was passed by AO without forwarding a draft of the proposed order of assessment contrary to the procedure laid down under Section 144C. Tribunal held that the factual assertion of the Assessee was correct and the absence of draft assessment order goes to the root of the assessment. Consequently the Tribunal held the same in favour of Assessee. Being aggrieved, Revenue went on appeal before High Court.
Held, that whether after remand, it was necessary to issue a draft assessment order. Firstly, the issuance of a draft assessment order is not an empty formality. When a draft assessment order is passed and copy is given to the assessee, the assessee can raise objections before the DRP on any of the proposed variations. There is a right given to the Assessee to object, and to have the objections considered not by the AO, but by the DRP. Tribunal set aside the entire exercise and the matter was relegated to the AO. Once the matter was sent back to be decided afresh it went back to the stage of Section 144C(1). Since the Tribunal set aside the proceedings on the ground of violation of principles of natural justice, the first exercise was void and without jurisdiction. Therefore, nothing remained on the record, including the draft assessment order. Therefore, issuance of a draft assessment order was necessary. We do not find from the scheme of Section 144C that if the proceedings were to be started a fresh on remand, the draft assessment order is not required to be given. Non issuance of the draft assessment order has thus vitiated the final assessment order – PR. CIT Vs. ANDREW TELECOMMUNICATIONS P. LTD. [2020] 423 ITR 503 (BOM)