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Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK
Before: SHRI CHANDRA MOHAN GARG & LAXMI PRASAD SAHU
O R D E R Per C.M.Garg,JM These are appeals filed by the different assessees against the separate orders of the CIT(A)-2, Bhubaneswar dated 21.6.2018 in the case of ARSS Antlata (JV) and ARSS GVR JV and dated 22.6.2018 in the case of ANTALANTA ARSS JV for the assessment year 2014-15.
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Since the facts are identical, we adjudicate the issue with facts & figures from the appeal in Asst. Year- 2014-15 as a lead case and the decision will apply mutatis-mutandis to other appeals.
Admission of additional ground dated 15.1.2020.
Ld counsel for the assessee submitted that the earlier application of the assessee for admission of additional grounds dated 21.11.2019 and 25.10.2019 ma kindly be ignored and only application of the assessee seeking admission of additional ground dated 15.1.2020 may kindly be considered and adjudicated.
We have heard the rival submissions on the application of the assessee dated 15.1.2020 for admission of additional grounds. Placing reliance on the judgment of Hon’ble Supreme Court in the case of NTPC, 229 ITR 383 (SC), Ld counsel submitted that the Tribunal has jurisdiction to examine a question of law, even though raised for the first before the Tribunal, which arises from the facts as found by the authorities below and having bearing on tax liability of the assessee.
Ld AR submitted that the Tribunal should not be prevented from considering question of law arising in assessment proceedings although not raised earlier and shall be adjudicated and decided without any extraneous materials available on record.
Replying to above, ld DR strongly opposed to the additional ground.
On careful consideration of rival submissions, we are of the considered view that the assessee is seeking to raise additional ground challenging the assessment order as nullify on the basis that it does not comply with the requirement of P a g e 2 | 5 ,3 59 & 360 /C TK /20 18: As sessm ent Y ear : 2 014 -15 section 144C of the Act before passing the assessment order u/s.143(3) of the Act.
This ground has been raised before the Tribunal for the first time and same was not raised before the Ld. CIT in Form No.35. Be that as it may, as per the propositions rendered by Hon’ble Supreme Court in the case of NTPC (supra), the Tribunal has jurisdiction to examine and adjudicate the ground having question of law even though the same has been raised for the first time before the Tribunal and such additional ground arises from the facts found by the authorities below and having bearing on tax liability of the assessee. This proposition empowers the Tribunal to consider the additional ground being legal in nature, which has been raised before the Tribunal for the first time without raising the same before the authorities below. Therefore, respectfully following the proposition rendered in the case of NTPC (supra), the additional ground sought to be raised by the assessee is admitted for consideration and adjudication.
The additional ground raised by the assessee reads as under:
“ On the facts and circumstances of the case, the order passed by the AO is a nullify as it has not complied to requirements of section 144C of the Income Tax Act, 1961 before passing the order u/s.143(3) of the Income tax Act, 1961.” 8. Ld A.R submitted that as per sub-section(1) of Section 144C of the Act, the Assessing Officer shall, in the first instance, forward a draft of the proposed order of assessment to the eligible assessee if he proposes to make, any variation in the income or loss returned which is prejudicial to the interest of such assessee. Ld counsel further submitted that as per sub-section (2) of Section 144C of the Act, on receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order may (a) file his file his acceptance of the P a g e 3 | 5 ,3 59 & 360 /C TK /20 18: As sessm ent Y ear : 2 014 -15 variations to the Assessing Officer; or (b ) file his objections, if any, to such variation with the Dispute Resolution Panel; and the Assessing Officer. Ld counsel submitted that in the present case, on receipt of TPO order, the AO without proposing any draft order to the assessee passed the impugned assessment order under section 143(3) of the Act on 29.9.2017. Therefore, the assessment order passed by the AO without complying with the requirements of sub-section (1) & (2) of Section 144C of the Act is a nullify and bad in law and deserves to be annulled.
Replying to above, ld DR explained the procedure to be adopted by the AO
and submitted that on receipt of TPO order, the AO has to prepare the draft order proposing any variation in the return of income of the assessee and same is required to be given to the assessee before passing the assessment order. He further submitted that in the present case, the assessee has not made any objection regarding TPO order, therefore, the legal ground raised by the assessee is not tenable and sustainable.
On careful consideration of the rival submissions, we are of the considered
view that in the present case, admittedly, the AO has not proposed any draft order as per mandate of sub-section (1) and (2) of section 144C of the Act and no draft order has been prepared and served on the assessee, which could enable the assessee to file its objection before DRP and before the AO. It is also not in dispute that the AO has made the assessment order without complying with the requirement of sub-section (1) of section 144C of the Act. Therefore, we are compelled to hold that the impugned assessment order passed u/s.143(3) of the P a g e 4 | 5 ,3 59 & 360 /C TK /20 18: As sessm ent Y ear : 2 014 -15
Act dated 29.12.2017 is bad in law and thus, same is annulled. Consequently, the impugned assessment order as well as first appellate order are hereby quashed.
As the facts are identical in other two appeals, in view of our decision in the case of ARSS Atalanta (JV), we also annulled the assessment order and consequently the assessment order and first appellate order are quashed in the case of M/s. Atalanta ARSS JV and ARSS GVR JV.
In the result, all these three appeals are allowed.
Order pronounced on 20/01/2020.