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The Tax Publishers2020 TaxPub(DT) 0379 (Del-Trib) INCOME TAX ACT, 1961
Section 263
Where order under section 263 was passed against draft assessment order and draft assessment order was not a final order or was not any order which is described under section 263 and it was a proposal given to assessee upon which assessee had a right to raise objections before DRP who had a full authority to direct/propose certain additions or to delete certain additions, therefore, it is a foolproof mechanism which cannot be doubted by CIT by invoking section 263.
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Revision under section 263 - Validity - Order passed under section 143(3) read with section 144C -
Assessee's return was processed under section 143(1) and subsequently, the case was selected for scrutiny and notice under section 143(2) was issued to assessee. A reference under section 92CA was made by DCIT to TPO and TPO vide order under section 92CA(3) proposed AO to enhance the income of assessee company being ALP international transactions relating to ITES services provided by assessee-company to its AE. DRP issued certain directions and in meanwhile, on examination of assessment record of instant assessment year, PCIT found that order passed under section 143(3) was erroneous and prejudicial to the interest of Revenue and thus issued show-cause notice under section 263. Held: Order under section 263 was passed against draft assessment order and the said draft assessment order was adjudicated before DRP, therefore, it was in the matter of scrutiny before Dispute Resolution Panel. Draft assessment order was not a final order or was not any order which is described under section 263. It was a proposal given to assessee upon which assessee had a right to raise objections before DRP who had a full authority to direct/propose certain additions or to delete certain additions. Therefore, it is a foolproof mechanism which cannot be doubted by CIT by invoking section 263 which was a revisional power in respect of final assessment order or any order but not to a proposal which was called draft assessment order.
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
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