Signature Not Verified v. Assessment Unit Income Tax Department Nationalfaceless Assessment Centre & Ors

Signature Not Verified $~S-45 IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 15322/2023 & CM APPL.61469/2023PEPSICO INDIA HOLDINGS PRIVATE LIMITED..... PetitionerThrough:Mr.Deepak Chopra, Advocate withMr.AnmolAnandandMs.PriyaTandon, Advocates.PEPSICO INDIA HOLDINGS PRIVATE LIMITED..... PetitionerThrough:Mr.Deepak Chopra, Advocate withMr.AnmolAnandandMs.PriyaTandon, Advocates. versus ASSESSMENT UNIT INCOME TAX DEPARTMENT NATIONALFACELESS ASSESSMENT CENTRE & ORS...... Respondents ..... RespondentsMr.AseemChawla,Sr.StandingCounselwithMs.PratishthaChaudhary,Ms.NiveditaandMr.Aditya Gupta, Advocates.CounselwithMs.PratishthaChaudhary,Ms.NiveditaandMr.Aditya Gupta, Advocates. Through: Mr.Aseem Date of Decision : 01[st]December, 2023 % CORAM:HON'BLE THE ACTING CHIEF JUSTICEHON'BLE MS. JUSTICE MINI PUSHKARNA JUDGMENT MANMOHAN, ACJ: (ORAL) 1.Present writ petition has been filed challenging the order dated21[st]November, 2023 passed by the Respondent No.1 under Section 143(3)read with Section 144C(4) of the Income Tax Act, 1961 [hereinafter referredto as ‘the Act’] for Assessment Year 2020-21 as well as the computationsheet and demand notice issued under Section 156 of the Act. Petitioner alsochallenges the notice dated 21[st]November, 2023 issued under Section 274read with Section 270A of the Act initiating penalty proceedings against the Signature Not Verified Petitioner. Petitioner also seeks directions to the Respondent No.3-DisputeResolution Panel (‘DRP’), to decide the objections dated 20[th]October, 2023in accordance with law. 2.Learned counsel for the Petitioner states that though the Petitioner hadpreferreditsobjectionsagainstthedraftassessmentorderdated26[th]September, 2023 before the Respondent No.3-DRP within limitation asprovided under Section 144C(2)(b)(i) read with Section 144B(1)(xxiv)(b)(I)of the Act, yet the Petitioner inadvertently failed to intimate the RespondentNo.1-Assessing Officer regarding the objections in terms of Section144C(2)(b)(ii) of the Act. He states that due to the inadvertent lapse onbehalf of the Petitioner, Respondent No.1- Assessing Officer passed theimpugned final assessment order dated 21[st]November, 2023, therebyclosing the assessment for the year under consideration. 3.Learned counsel for the Petitioner states that since the Petitioner hadexercised its statutory remedy of filing its objections before the RespondentNo.3-DRP, the impugned final assessment order should not have beenpassed by the Respondent No. 1- Assessing Officer before the RespondentNo. 3-DRP issued its directions for framing of the assessment. 4.In support of his submission, he relies on the judgment dated19[th]July, 2023 passed by the High Court of Karnataka in Open SiliconResearch Private limited v. The Assessment Unit [W.P. No. 14541 of 2023]and the Bombay High Court in Sulzer Pumps India Private Limited v. Dy. Commissioner of Income Tax [W.P.(L) No. 15811/2021] wherein underidentical facts, the Court had set aside the final assessment order andconsequent notices. He also relies on the decision of this Court in SRF Ltd.vs. NFAC, [2021] 281 Taxman 574 (Delhi High Court), Anand Nvh Signature Not Verified Products (P.) Ltd. vs. NFAC, [2021] 282 Taxman 485 (Delhi High Court)and Fiberhome India (P.) Ltd. Vs. National E-Assessment Centre,Additional/Joint/Deputy Assistant Commissioner of Income-tax/Income-tax Officer, (2022) 132 taxmann.com 118 (Delhi) wherein this Court setaside the final assessment order and the consequent notices/ computationsthat were passed without waiting for the directions issued by the DRP as perthe mandate of Section 144C of the Act. 5.Issue Notice. Mr.Aseem Chawla, Senior Standing Counsel, acceptsnotice on behalf of the Respondents. Signature Not Verified Products (P.) Ltd. vs. NFAC, [2021] 282 Taxman 485 (Delhi High Court)and Fiberhome India (P.) Ltd. Vs. National E-Assessment Centre,Additional/Joint/Deputy Assistant Commissioner of Income-tax/Income-tax Officer, (2022) 132 taxmann.com 118 (Delhi) wherein this Court setaside the final assessment order and the consequent notices/ computationsthat were passed without waiting for the directions issued by the DRP as perthe mandate of Section 144C of the Act. 5.Issue Notice. Mr.Aseem Chawla, Senior Standing Counsel, acceptsnotice on behalf of the Respondents. 6.He submits that under Section 144C(2)(b)(ii), the Petitioner on receiptof the draft assessment order was statutorily required to file its objectionsbefore the Assessing Officer in addition to the DRP. He further submits thatunder Section 144C(3)(b) the Assessing Officer was obligated to completethe assessment on the basis of the draft assessment order if no objectionswere received within the time period specified under Section 144C(2) i.e.within thirty days of the receipt of the draft order. He states that theAssessing Officer was well within his right to pass the impugned assessmentorder dated 21[st]November, 2023 and he cannot be faulted for finalising theassessment in accordance with the prescribed procedure. 7.Having heard learned counsel for the parties, this Court is of the viewthat the issue at hand is no longer res integra as it has been decided by theBombay High Court in Sulzer Pumps (supra) wherein it has been held asunder:- “6. In our view since petitioner had already filed a reference raisinghis objections to the DRP and Section 144C (4) of the Act requires theAssessing Officer to pass the final order including the view expressedby the DRP, we will be justified in setting aside the order of theAssessing Officer dated 28th June, 2021 which is impugned in this Signature Not Verified petition. We would also observe that the Assessing Officer cannot befaulted for passing the impugned order. At the same time, theAssessing Officer will also have benefit of considering the views ofDRP while passing a fresh Assessment Order.” 8.This Court is in agreement with the view expressed by the BombayHigh Court in the aforesaid decision. Once the objections have been filed bythe assessee against a draft assessment order within the time limit prescribedunder Section 144C(2)(b), the rest of the procedure should be followed asprescribed and the final assessment order ought to be passed by theAssessing Officer in accordance with the directions issued by the DRP. 9.This Court is further of the view that no prejudice will be caused tothe Respondent-Department if the present petition is allowed and theimpugned assessment order is set aside as Respondent-Department would bewell within its rights to pass a fresh assessment order post the receipt ofdirection from the Respondent No. 3-DRP. 10.Accordingly the impugned assessment order dated 21[st]November,2023, the computation sheet as well as all the subsequent notices are setaside and the writ petition is allowed. ACTING CHIEF JUSTICE MINI PUSHKARNA, J DECEMBER 1, 2023/TS