Wp/451/2022 Of Exxonmobil Company Pvt Ltd v. The Deputy Commissioner Of Income - Tax, 6(1)(1), Mumbai And Anr

Digitallysigned by IN THE HIGH COURT OF JUDICATURE AT BOMBAYPURTIPURTIPRASADPRASADPARABORDINARY ORIGINAL CIVIL JURISDICTIONPARABDate:2022.04.2210:51:52+0530 WRIT PETITION NO. 451 OF 2022 ExxonMobil Company Private Limited V/s.The Deputy Commissioner of IncomeTax 6(1)(1), Mumbai and Anr. ….Petitioner …Respondents ---- Mr. Paras S. Savla for Petitioner.Mr. Charanjeet Chanderpal a/w Ms. Priti Chhabriya for Respondent No.1-Revenue. ---- CORAM : K.R. SHRIRAM & N. R. BORKAR, JJ. DATED : 18[th] APRIL, 2022 P.C. : 1.Petitioner has filed this petition impugning an order dated 7[th]February, 2020 for the assessment year 2006-07 passed by Respondent No.1 2.When the petition was listed on 20[th] February, 2022, it wasstood over today. We found that respondent’s counsel Mr. CharanjeetChanderpal has even filed vakalatnama on 23[rd] March, 2022. No affidavit inreply has been filed. When the matter was called out Ms.Chhabriya requestedthe petition be kept back as Mr. Charanjeet Chanderpal will be comingand addressing the court. The matter was kept back and called out againwhen Mr. Charanjeet Chanderpal was again not available. 3.One of the grounds of challenge is that petitioner is eligibleassessee as defined under Section 144C of the Income Tax Act, 1961 (the Act). Mr. Savla submits that petitioner therefore should have been given draft of the proposed order of assessment if the Assessing Officer proposed to make any variations which was prejudicial to the interest of petitioner. Section 144C (1) of the Act reads as under : “The Assessing Officer shall, notwithstanding anything to thecontrary contained in this Act, in the first instance, forward adraft of the proposed order of assessment (hereafter in thissection referred to as the draft order) to the eligible assesseeif he proposes to make, on or after the 1[st] day of October,2009, any variation in the income or loss returned which isprejudicial to the interest of such assessee”. 4.Clause (b)(i) of Sub Section 15 of Section 144C of the Act defines eligible assessee and it reads as under : (b) "eligible assessee" means,— (i) any person in whose case the variation referred to in sub-section (1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA; 5. 5.Admittedly this is a case where Respondent No.1 was givingeffect to an order dated 10[th] June, 2011 passed by the Income Tax AppellateTribunal (ITAT) by which the ITAT had set aside the file for adjustment ontransfer pricing issue. Mr. Savla states that it is also petitioner’s case thatthe order passed in any way is time barred as provided under Sub Section 7of Section 153 of the Act. In any case, Mr. Savla states that sinceRespondent No.1 was to give effect to the order passed by the TransferPricing Officer, as noted earlier, a draft of the proposed order ought to havebeen served upon petitioner before the final impugned order was passed. In the petition, there is averment in ground ‘C’ that in this case there is nodispute that the provisions of Section 144C of the Act read with Section92CA of the Act was applicable and Section 144C (1) of the Act mandatesthat the draft assessment order was necessary before the Assessing Officercan proceed to pass the final assessment order. Even in partial remandproceedings from the Tribunal, it is averred the Assessing Officer is obligedto pass the draft assessment order under Section 144C(1) of the Act andpassing draft assessment order is without jurisdiction. As noted earlier, noreply has been filed, though respondent had enough time, denying theseaverments. the petition, there is averment in ground ‘C’ that in this case there is nodispute that the provisions of Section 144C of the Act read with Section92CA of the Act was applicable and Section 144C (1) of the Act mandatesthat the draft assessment order was necessary before the Assessing Officercan proceed to pass the final assessment order. Even in partial remandproceedings from the Tribunal, it is averred the Assessing Officer is obligedto pass the draft assessment order under Section 144C(1) of the Act andpassing draft assessment order is without jurisdiction. As noted earlier, noreply has been filed, though respondent had enough time, denying theseaverments. 6.At this stage, Mr. Charanjeet Chanderpal entered the court andto a query posed by the court in fairness states that Section 144C of the Actwould be applicable and under Sub Section (1) of Section 144C RespondentNo.1 ought to have issue the draft assessment order. Mr. CharanjeetChanderpal also states that he had just received the file from department.At the same time, Mr. Charanjeet Chanderpal states if the draft assessmentorder has not been issued before the final assessment order is passed, thelaw is very clear, the order has to be set aside. 7.Having perused the petition and also the impugned order,it does appear that no draft assessment order has been issued. Inthe circumstances, the impugned order dated 7[th] February, 2020 is quashed and set aside. All the consequential orders are also quashed and set aside. 8.Petition disposed with no order as to costs. (N. R. BORKAR, J.) (K.R. SHRIRAM, J.)