The Tax Publishers2021 TaxPub(DT) 0069 (Del-HC)

INCOME TAX ACT, 1961

Section 144C

Once ITAT directed AO to decide the matter de novo, it meant that a new hearing of matter had to be conducted as if original hearing had not taken place. Consequently, AO had to decide the matter in accordance with elaborate procedure mentioned in section 144C and not de hors it. Accordingly, in complete contravention of section 144C, AO wrongfully assumed the jurisdiction and passed final assessment order without passing a draft assessment order and without giving assessee an opportunity to raise objections before DRP.

Assessment - Transfer pricing - AO passed final assessment order, pursuant to remand by ITAT, without passing draft assesment order -

Assessee entered into international transactions with its AE. AO made reference to the TPO. AO passed, draft assessment order under section 144C(1) on 31-12-2010 and assessee filed objections before Dispute Resolution Panel (DRP). Thereafter, assessment under section 143(3)/144 Completed in pursuance to directions issued by the DRP, wherein addition was made on account of excess claim of deduction under section 10A and transfer pricing adjustment made by TPO. Being aggrieved, assessee filed appeal before ITAT, where additions were set aside and AO was directed to frame assessment afresh. The matter was restored to AO. Pursuant to aforesaid remand, AO passed assessment order, assessee raised the ground with regard to validity of remand assessment as AO had not followed procedure contemplated under section 144C. Held: Once ITAT directed AO to decide the matter de novo, it meant that a new hearing of matter had to be conducted as if original hearing had not taken place. Consequently, AO had to decide the matter in accordance with elaborate procedure mentioned in section 144C and not de hors it. In the instant case, in complete contravention of section 144C, AO wrongfully assumed the jurisdiction and passed final assessment order without passing a draft assessment order and without giving assessee an opportunity to raise objections before DRP. Accordingly, matter was remanded to AO with direction to follow the mandate of law, in particular, binding provisions like section 144C.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08



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