INCOME TAX ACT, 1961

Section 144C(8) Section 144C(10)/(13)

Assessment - Validity - AO travelled beyond direction given by DRP -

Assessee challenged validity of assessment order pleading that AO while implementing directions of DRP, though, deleted addition of Rs. 53,14,19,634, however, he made addition of Rs. 26,56,35,337 which he himself accepted as explained in the draft assessment order. Held: As per sub-section (8) of section 144C, the DRP may confirm, reduce or enhance the variation proposed in the draft assessment order and issue necessary direction to AO. Sub-section (10) of section 144C makes it clear that every direction issued by DRP shall be binding on AO. Sub-section (13) of section 144C provides that after receiving direction of DRP, AO shall in conformity with the direction complete the assessment without providing any further opportunity of being heard to assessee. The requirement of providing a personal hearing to the assessee at the final assessment stage has been dispensed with only for the reason that AO has no other scope but to implement the directions of DRP. In the facts of instant case. The only direction of DRP was to delete addition made in the draft assessment order. Therefore, clear mandate given to the AO by DRP was to restrict himself to delete the addition of Rs.53,14,19,634. Whereas, AO travelled beyond the direction given by DRP and made addition of Rs.26,56,35,337, which he himself accepted as explained in the draft assessment order. Thus impugned assessment order passed in clear violation of directions of DRP was a nullity in the eyes of law as it was against provisions contained under sub-sections (10) and (13) of section 144C.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13

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