FIDELITY INFORMATION SERVICES INDIA PRIVATE LTD. vs. DEPUTY COMMISSIONER OF INCOME TAX
What did the High Court hold?
The High Court held that the impugned draft assessment order dated 28.12.2019, the consequent notice of demand dated 28.02.2020, and the notice dated 28.02.2020 initiating penalty proceedings against the petitioner are set aside. The Court reasoned that the petitioner was not an "eligible assessee" in terms of Section 144C(15)(b) of the Act because the Transfer Pricing Officer (TPO) found no variation in the petitioner's income-tax return due to the existence of an Advance Pricing Agreement (APA) with the Central Board of Direct Taxes. Therefore, there was no occasion for the Assessing Officer to pass a draft assessment order under Section 144C(1). The Court relied on decisions from the Delhi High Court in Honda Cars India Ltd.'s case, the Gujarat High Court in Pankaj Extrusion Ltd.'s case, and the Bombay High Court in Classic Legends (P) Ltd.'s case, which held that if an assessee is not an "eligible assessee" under Section 144C(15)(b), the procedure for issuing a draft order under Section 144C would not apply. Consequently, the AO was not competent to pass the draft assessment order, and thus, there was no occasion to pass a final assessment order, leading to the quashing of the demand and penalty notices. Section 292B was deemed inapplicable as the issue was not a mere procedural irregularity but a fundamental lack of jurisdiction to pass a draft order.
What were the facts?
The petitioner, Fidelity Information Services India Pvt. Ltd., challenged an assessment order dated 28.12.2019 for AY 2016-17, along with consequent demand and penalty notices. The petitioner, engaged in software development for its US parent, had an Advance Pricing Agreement (APA) with the CBDT, applicable for the assessment year. The Transfer Pricing Officer (TPO) found no variation in the petitioner's international transactions. Despite this, the Assessing Officer (AO) proposed to add Rs. 13,73,32,347/- by disallowing foreign travelling expenses, issuing a draft assessment order under Section 144C read with Section 143(3). The petitioner had previously challenged a draft order in CWP-2334-2020, where the revenue initially claimed it was a final order. Subsequently, a demand notice of Rs. 4,37,55,114/- and a penalty notice were issued. The petitioner received an intimation of a final assessment order dated 28.02.2020, but later received a notice stating no such order was passed and the final order was dated 28.12.2019.
What were the issues?
1. Whether the draft assessment order dated 28.12.2019, passed under Section 144C read with Section 143(3) of the Income-tax Act, 1961, is illegal and invalid, given that the petitioner was not an "eligible assessee" under Section 144C(15)(b) as there was no variation found by the TPO due to the existence of an Advance Pricing Agreement. Assessee's arguments: The petitioner contended that since the TPO found no variation, it was not an eligible assessee under Section 144C(15)(b), rendering the draft assessment order illegal. Consequently, any subsequent demand or penalty proceedings based on an invalid order are per se illegal. The petitioner also argued that even if the draft order were valid, it was merely a proposal and not a final determination, thus no demand or penalty could be raised. Revenue's arguments: The revenue argued that Section 292B of the Act could be applied to cure any procedural defects, implying that the draft assessment order, despite the petitioner not being an eligible assessee, could be considered valid or that the subsequent demand and penalty were validly raised.
Which sections of the Income-tax Act were involved?
Section 143(3),Section 144C,Section 144C(1),Section 144C(15)(b),Section 144C(15)(b)(i),Section 144C(15)(b)(ii),Section 144C(3),Section 144B,Section 156,Section 271(1)(c),Section 274,Section 292B,Section 92CA,Section 92CA(3)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
Date of Order 28/12/2019
Draft Order u/s 144C of the Income-tax Act 1961
The assessee filed its original return of income for the A.Y. 2016-17 on 30.11.2016 declaring a total income of Rs. 57,57,85,770/-. The assessee SHAMSHER SINGH 2026.08.14 16:31 document chandigarh
CWP-11215-2021
[ 10 ]
company revised its ITR on 29.04.2017 for the AY 2016-17 declaring total income of Rs. 62,14,07,780/-. The case was selected for scrutiny through CASS. Statutory notice under section 143(2) was issued on 03.07.2017 which was duly served on the assessee. Subsequently, questionnaire alongwith statutory notice u/s 142(1) was issued on 17.06.2019 and further from time to time as per the case history on ITBA portal. In response to the said notices requisite details were furnished on ITBA Portal by the assessee company.
1 M/s Second foundation India Pvt. Ltd. (now known as Fidelity Information Services India Pvt. Ltd.) was incorporated on 15.04.2002 as a private limited company in New Delhi, India. The company is a subsidiary company of M/s Second foundation Inc, USA, a company incorporated in United States of America. The company is primarily engaged in providing software development services to M/s Second foundation Inc, USA. The company renders software development services from India. This unit is registered under the software technology park of India (STPI) Scheme formulated by Govt. of India.
2 While examining the case, it was noticed that the assessee had entered into international transactions during the year under consideration and having large value of international transactions in services. After taking approval from the Worthy Pr. Commissioner of Income Tax-I, Chandigarh vide letter No. Pr. CIT-1/Chd/Judl./2018- 19/791 dated 19.06.2018, the case was referred to the Transfer Pricing Officer (TPO), New Delhi, vide letter F. No. DCIT/Circle 1(1)/Chd./2018-19/1698 dated 28.06.2018 as one of the reasons of the selection of the case was based on TP Risk Parameter, for determining the arm's length price in relation to the international transactions u/s 92CA of the I.T Act, 1961. 1.3 The Deputy Commissioner of Income-Tax (Transfer Pricing)-1(3)(1), New Delhi passed order u/s 92CA(3) of the Income Tax Act, 1961 on 20.02.2019, wherein no adverse inference was drawn by the TPO as the assessee company had entered into Advance Pricing Agreement (APA) with the Central Board of Direct Taxes on 06.02.2017 and the A.Y. 2016-17 is covered as APA year. The order of the TPO is reproduced hereunder:
“OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX TRANSFER PRICING OFFICER-1(3)(1) ROOM NO. 510, 5th FLOOR, E-2 BLOCK, CIVIC CENTER, NEW DELHI,
ORDER U/S 92 CA (3) OF THE INCOME TAX ACT, 1961
1 Name of the Assessee : M/s Fidelity Information Services India Pvt. Ltd. S-405, Greater Kailash, Part-II, New Delhi-110048. 2 Permanent Account No. : AADGC50395D
3 Status
: Company
4 Assessment Year
: 2016-17
5 Previous Year
: 2015-16
6 Order U/S : 92CA (3)
7 Dates of Hearing
: As per record
SHAMSHER SINGH 2026.08.14 16:31 document chandigarh
CWP-11215-2021
[ 11 ]
8 Date of Order
: 20/2/19
A reference u/s 92CA(1) of the I.T. Act, 1961 was received from DCIT, Circle-1(1), Chandigarh, to determine the ‘Arm’s Length Price’ in respect of International transactions entered into by M/s Fidelity Information Service India Private Limited (here-in-after called as “the assessee”) with its Associate Enterprises (AEs) during the FY 2015-16. In response to notice u/s 92CA(2) of the I.T. Act, 1961 Mr. Chirag Aggarwal, the authorized representatives of the Company, appeared from time to time. The Transfer pricing documentation containing functional and economic
analysis prescribed under Rule 10D of the Income Tax Rules was submitted and placed on record.
Business Profile of the Assessee The assessee company was incorporated on 15th April 2002 as a private limited company in New Delhi, India. The assessee company acts as a captive service provider and is engaged in the provision of software services primarily comprising custom application development, Integration, maintenance, support and testing. The assessee provides these services from its units in Chandigarh (to be moved to Mohall shortly) and Bangalore.
During the F.Y.2015-16, the taxpayer has reported the following International transactions in Form 3CEB:-
S. No. AEs Nature of Transaction Amount (in Rs.) Method 1 Fidelity Information service Inc US Sales of services 3041212728 TNMM 2 Second Foundation Inc US Sales of services 119664402 TNMM 3 Fidelity National information services Inc US ESOP-RSU expense 24012960 TNMM 4 Fidelity National information services Inc US ESPP Expense 7061021 TNMM 5 Fidelity Information service Inc. US Unbilled Revenue 264889523 TNMM 6 Fidelity National information services Inc US Trade Payables 21690766 TNMM
It was intimated by the AR during the TP proceedings that the assessee has already entered into Advance Pricing Agreement (APA) with the Central Board of Direct Taxes on 06.02.2017 and the A.Y.2016-17 is covered as APA Year. Further, the assessee modified return in view of section 92CD of the I.T Act, 1961 read with the rule 10RA of the I.T. Rules, 1962 on 29.04.2017 and the annual compliance report was filed on 05.05.2017 as per rule 10(D) of IT. Rules, 1962. The assessee in this regard filed the Copy of abovesaid APA as well as other submissions.
SHAMSHER SINGH 2026.08.14 16:31 document chandigarh
CWP-11215-2021
[ 12 ]
In view of the functional and economic analysis of assessee, no adverse inference is drawn in respect of the international transactions undertaken by the assessee during the F.Y. 2015-16. (Saddik Ahmed) Deputy Commissioner of Income Tax, Transfer Pricing Officer-1(3)(1), New Delhi Copy to 1. The CIT (Transfer Pricing)-1, New Delhi for information please.
The Addl. CIT, TPO-1(3), New Delhi for information please.
The DCIT, Circle-1(1), Chandigarh for necessary action.
The Assessee (Saddik Ahmed) Deputy Commissioner of Income Tax, Transfer Pricing Officer-1(3)(1), New Delhi”
4 In response to statutory notices under section 143(2)/142(1), Ms. Divya Shingari, CA submitted the reply on ITBA from time to time.
Addition on account of foreign travelling expenses:
1 The assessee company, during the year under consideration, has debited travelling expenses amounting to Rs.18,69,28,806/- in the profit and loss account. Out of this, the foreign traveling expenses were Rs.13,73,32,347/-. As per the assesse these travelling expenses have been incurred for providing services to M/s Second Foundation Inc., USA and Fidelity information Services Inc., USA. As per the agreement with M/s Second Foundation, Inc. USA, a copy of which is already on record in earlier years, the assessee company is not required to incur any expense on account of foreign travelling for servicing of the clients of M/s Second Foundation Inc., USA. During the course of assessment proceeding, the assessee company vide notice u/s 142(1) dated 30.11.2019 was asked to justify foreign traveling expenses incurred by the assessee company amounting to Rs. 13,73,32,347/-.
2 In response thereto, the assessee company vide letter dated 11.12.2019 stated as under on this issue:
xxxx xxxx xxxx xxxx
After considering the facts of the case, it is held that providing of service to the foreign clients on behalf of M/s SF USA and M/s Fidelity Information Services Inc, USA was not the responsibility of the assessee company, therefore, the expenditure incurred on foreign traveling amounting to Rs.13,73,32,347/- is treated as expenditure pertaining to M/s SF Inc, USA and M/s Fidelity Information Services Inc. USA and is disallowable in the hands of the assessee company.
1 In this regard, it is important to mention that no new fact has been brought out by the assessee company while giving its submissions on this issue. That the assessee company has new service agreements with both the said customers under which the assessee company is rendering services to the said customers and that the customers remunerate the assessee on cost + 16.60% and further that the cost which is charged by the assessee to its respective customers includes interalia the travel cost, does not in any way make this an eligible business expenditure of the assessee company.
2 No details have been provided regarding the inclusion of the said expenses in the cost charged by the assessee company to its clients. Further, as per para 3.1 of Article 3 of the said settlement agreement filed by the assessee, cost shall include the allocable portion of all normal and ordinary course operating expenses including travel cost. However, the assessee has SHAMSHER SINGH 2026.08.14 16:31 document chandigarh
CWP-11215-2021
[ 13 ]
failed to prove that the said foreign travel cost is a normal and ordinary course business expense and thus the foreign travel expense are not allowable u/s 37(1) of the I.T. Act, 1961. 2.3 For the A.Y. 2006-07 the case of the assessee is pending for adjudication before the Hon’ble ITAT in second round. During the A.Y. 2011-12 the Hon’ble DRP’s vide its order dated 23.12.2015 directed to verify whether the foreign travelling expenses have been reimbursed by the customers. On verification as per the directions of Hon’ble DRP for A.Y. 2011-12, it was noticed that the bill of re-imbursement pertained to ‘Software Development Charges’. The assessee was asked to produce documentary evidence regarding approval granted by the customers i.e. 2nd foundations Inc. USA & Fidelity Information Services, Inc. USA for reimbursement of foreign travelling expenses. However the assessee expressed his inability to produce the same. Thus, the assessee failed to establish that the foreign travelling expenses were re-imbursed by its customers i.e. 2nd foundations Inc. USA & Fidelity Information Services, Inc. USA. Accordingly the foreign travelling expenses were added back during the A.Y. 2011-12. However, the Hon’ble ITAT has deleted the addition made on foreign travelling expense but the order was not acceptable to the Department but further appeal u/s 260A of the Act was not filed as the tax effect involved was below the monetary limits prescribed.
4 Further, the assessee has not been successful to explain how these expenses related to the normal business of the assessee. It is also pertinent to mention here that the reason for the disallowance is not based on whether the expenses have been incurred by the assessee or not, but on the allowability of the expense as such.
5 The assessee company had to provide the services for development of computer software and allied products on specific orders and specifications provided from time to time by M/s SF Inc. USA. Further, M/s. SF Inc USA was to provide technical support for the development of the software to the assessee company. It was further seen from the various clauses of the agreement that the assessee company was to develop specific software as per the direction of the company M/s SF Inc USA. Therefore, the assessee company was only engaged in development of computer software and allied products for M/s SF Inc USA and was not required to do any servicing on behalf of M/s SF Inc. USA.
6 It has further been observed that as per terms of agreement, the responsibility for servicing of clients’ of M/s SF Inc. USA is that of M/s SF Inc. USA only. The responsibility of the assessee company was limited to the development of the software as per the technical specifications provided by M/s SF Inc. USA. In fact, the assessee company was not receiving any servicing income for servicing the clients of M/s SF Inc. USA. The expenses incurred for servicing of the clients of M/s SF Inc. USA were not the responsibility of the assessee company, as per the terms of the agreement. Further, all the expenses for the stay of the visiting employees of the assessee company to foreign companies were being met by M/s SF Inc. USA. The assessee company was bearing only the foreign traveling expenses and visa expenses of the visiting employees. In fact, the cost of foreign traveling expenses and visa expenses of the visiting employees was to be borne by M/s SF Inc. USA, as during the foreign visits by the assessee’s employees, they were basically rending services to M/s SF Inc. USA and not to the assessee company. Thus, the copy of communication is respect of the employees is no way challenges the arguments taken by the AO for disallowing the expenses.
7 The assessee had also furnished sample invoices raised to customers Second foundation Inc and Fidelity Information Services, LLC. The assessee had once again tried to establish that the persons had actually travelled abroad to work on the projects. These invoices in description of charges only SHAMSHER SINGH 2026.08.14 16:31 document chandigarh
CWP-11215-2021
[ 14 ]
mentions month-wise software development charges. No segregation whatsoever is provided with regard to foreign travelling expenses. Further, the main question is not whether the person had travelled abroad or not. The main issue at hand is whether the expenses were allowable in the business of the assessee. The invoices also do not establish that the expense was an allowable expense.
8 The assessee has mentioned in its reply dated 11.12.2019 that the issue of allowability of foreign travelling expenses has been decided by the Hon’ble ITAT in favour of assessee for the AY 2011-12 and 2012-13 and further, for the AY 2014-15 the Ld. CIT(A) has allowed this issue in favour of the assessee. In this regard, it is pertinent to mention that the department has not accepted the decision of the Hon’ble ITAT for the AY 2011-12 and 2012-13 but further appeals u/s 260A were not filed due to tax effect being less than monetary limits prescribed. Further, it is worthwhile to mention here that the Ld. CIT(A) in the case of the assessee for the A.Y. 2014-15 has deleted the addition made on the issue of foreign travelling expenses by simply relying upon the order of Hon’ble ITAT in the case of the assessee for the A.Y. 2011- 12 & 2012-13. The said order of the Ld. CIT(A) has not been found acceptable and the department has filed further appeal which is pending for adjudication before the Hon’ble ITAT.
9 Keeping in view above and in the facts and circumstance in the case, it is found that the expenditure on account of foreign travelling of Rs. 13,73,32,347/-for A.Y. 2016-17 is not allowable to the assessee and therefore an amount of Rs. 13,73,32,347/-is proposed to be added to the returned income of the assessee. I am satisfied that the case of the assessee is fit for initiating penalty u/s 271(1)(c) for furnishing inaccurate particulars of income.
Computation of Income
1 With these comments, the total income of the assessee is computed as under:-
Particulars Amount Rs. Profits and gains from the business Rs.62,14,07,780/-
Add: Addition on account of foreign travelling expenses as discussed in Para 2.9 above
Rs. 13,73,32,347/-
Total Assessed Income Rs. 75,87,40,127/-
2 Since this is a draft order u/s 144C(1) r.w.s. 143(3) of the Income Tax Act, 1961, no demand notice, penalty notice u/s 271(1)(c) of the Act, interest u/s 234A, 234B and 234C of the act or challan is being issued to the assessee company. As per provision of section 144C(2) of the Act, the assessee company is given period of 30 days from the receipt of this draft order to file its acceptance or objections of the variations made in the draft assessment order.”
(emphasis supplied)
By treating or deeming the afore quoted draft assessment order dated 28.12.2019 to be the final assessment order under Section 143(3) of the Act, the respondent-Income Tax authorities seek to demand the impugned income tax dues SHAMSHER SINGH 2026.08.14 16:31 document chandigarh
CWP-11215-2021
[ 15 ]
from the petitioner with regard to the assessment year 2016-2017. Whether such action is sustainable in law is the question posed for our determination.
A perusal of the afore quoted assessment order clearly reveals that it was a draft assessment order; the addition of income to the petitioner’s declared income, on which is based the impugned demand, was only a proposal; in the operative part of such order it was clearly mentioned that since the said order was only a draft assessment order, the consequent demand or penalty notices were not being issued; through such order, the petitioner was further informed that since the order was only a draft assessment order, passed under Section 144C(1) of the Act, against the same the petitioner had a right to file objections under Section 144C(2) of the Act or accept it so that thereafter the final assessment order could be passed and that through such order there was also no final determination of the income-tax payable by the petitioner.
In the light of the above and in the absence of any final determination of the sum payable by the petitioner-assessee, as required under Section 143(3) of the Act, on the basis of a draft assessment order, the impugned demand of income-tax dues sought to be made from the petitioner is unsustainable.
Before raising of a demand under Section 156 of the Act, Section 143(3) of the Act clearly provides for the determination of a sum payable by the assessee through passing of a final assessment order which in the case in hand is found missing. In this regard Section 143(3) of the Act may usefully be referred to. The same reads as follows:- “143(3) On the day specified in the notice issued under sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such order evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer SHAMSHER SINGH 2026.08.14 16:31 document chandigarh
CWP-11215-2021
[ 16 ]
shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him on the basis of such assessment.”
(emphasis supplied)
As per learned counsel appearing for the respondent-revenue the impugned draft assessment order dated 28.12.2019 was a result of a mistake resulting from pressing of a wrong tab by the petitioner’s AO at the time of uploading of such order on the ITBA portal and keeping in view the intent behind passing of such order the same should be treated as the final assessment order and to support its case the revenue presses into the service Section 292B of the Act. Such submission is required to be considered only to be rejected because a reading of the impugned assessment order reveals that the “mistake” could not have been committed at the time of uploading of such order by pressing of a wrong tab by the petitioner’s AO because the said order starts with “Draft Order u/s 144C of the Income-tax Act, 1961”. In the operative part of such order also it is clearly mentioned that the additions made therein to the petitioner’s declared income are only by way of a proposal. Even for the sake of repetition, the relevant portions of the impugned draft assessment order are reproduced below for reference:- “2.9 Keeping in view above and in the facts and circumstance in the case, it is found that the expenditure on account of foreign travelling of Rs. 13,73,32,347/-for A.Y. 2016-17 is not allowable to the assessee and therefore an amount of Rs. 13,73,32,347/-is proposed to be added to the returned income of the assessee. I am satisfied that the case of the assessee is fit for initiating penalty u/s 271(1)(c) for furnishing inaccurate particulars of income. 3. xxxx xxxx xxxx xxxx 3.1 xxxx xxxx xxxx xxxx
2 Since this is a draft order u/s 144C(1) r.w.s. 143(3) of the Income Tax Act, 1961, no demand notice, penalty notice u/s 271(1)(c) of the Act, interest u/s 234A, 234B and 234C of the act or challan is being issued to the assessee company. As per provision of section 144C(2) of the Act, the assessee company is given period of 30 days from the receipt of this draft order to file its acceptance or objections of the variations made in the draft assessment order.” SHAMSHER SINGH 2026.08.14 16:31 document chandigarh
CWP-11215-2021
[ 17 ]
(emphasis supplied)
Even otherwise, if the passing of the impugned draft assessment order was the result of a mistake then the mistake, if any, should have been corrected or modified or clarified by the revenue through passing of a subsequent order after acknowledging such mistake, which was never done.
In the light of the afore factual position, Section 292B of the Act would have no application to the petitioner’s case and consequently, the judgments cited by the revenue on this issue would also be distinguishable on facts.
Viewed from yet another angle, the impugned demand made from the petitioner on the strength of the impugned assessment order dated 28.12.2019 would be unsustainable in law.
It is not disputed that the petitioner was not an “eligible assessee” in terms of Section 144C(15)(b) of the Act. This is for the reason that there was no variance found by the TPO in the income tax return furnished by the petitioner with regard to its international transactions with its associate enterprise because on 06.02.2017, the petitioner had entered into an advance pricing agreement with the Central Board of Direct Taxes which agreement was applicable to the assessment year in question. Thus, in the petitioner’s case there was no occasion to pass a draft assessment order under Section 144C(1) of the Act.
In this regard, reference can usefully be made to the following observations made by a Division Bench of the Delhi High Court in Honda Cars India Ltd.’s case (supra): - “12. First of all, the petitioner is admittedly not a foreign company. Secondly, the Transfer Pricing Officer has not proposed any variation to the return filed by the petitioner. The consequence of this is that the Assessing Officer cannot propose an order of assessment that is at SHAMSHER SINGH 2026.08.14 16:31 document chandigarh
CWP-11215-2021
[ 18 ]
variance in the income or loss return. The Transfer Pricing Officer has accepted the return filed by the petitioner. In view of which, neither of the two conditions are satisfied in the case of the petitioner and thus the petitioner for the purposes of section 144C(15)(b) is not an "eligible assessee". Since the petitioner is not an eligible assessee in terms of section 144C(15)(b), no draft order can be passed in the case of the petitioner under section 144C(1).
(emphasis supplied)
To the same effect are the following findings by a Division Bench of the Gujarat High Court in Pankaj Extrusion Ltd.’s case (supra): - “8. From the above, it is clear that for assessment year relevant for our purposes, on account of procedure undertaken in section 92CA of the Act, there was no variation in the income by virtue of order of Transfer Pricing Officer. That being the position, the petition cannot be stated to be an eligible assessee as defined in clause(b) of sub-section (15) of section 144C of the Act. Procedure for issuance of draft order calling for his objection and taking further steps as laid down under section 144C therefore, would not apply.”
(emphasis supplied)
A Division Bench of the Bombay High Court in Classic Legends (P) Ltd.’s case (supra) has also held as follows: -
In the facts of the present case, it is not in dispute that the petitioner is not a non-resident or a foreign company as contemplated under section 144C(15)(b)(ii). The question is whether the petitioner would fall within the definition of “eligible assessee” as contemplated under section 144C(15)(b)(i). On a plain reading of the said provision, the petitioner can be stated to be an “eligible assessee” only if there is a case of variation referred to in the said sub-section (1) and which arises as a consequence of the order passed by the Transfer Pricing Officer under sub-section (3) of section 92CA. In the facts of the present case, it is an admitted position that there was no variation in the income of the petitioner by virtue of the order of the Transfer Pricing Officer. That being the position, the petitioner cannot be stated to be an “eligible assessee” as defined in clause (b) of sub-section (15) of section 144C of the Income-tax Act. Once this is the case, the entire procedure for issuance of a draft order calling for the petitioner's objections thereon and taking further steps as laid down under section 144C would, therefore, not apply. 7. xxxx xxxx xxxx xxxx 8. xxxx xxxx xxxx xxxx 9. xxxx xxxx xxxx xxxx
In view of the above discussion, it is clear that the petitioner in the present case, not being an “eligible assessee” in terms of section SHAMSHER SINGH 2026.08.14 16:31 document chandigarh
CWP-11215-2021
[ 19 ]
144C(15)(b) of the Income-tax Act, the Assessing Officer was not competent to pass the draft assessment order under section 144C(1) of the Income-tax Act. Consequently, there was no occasion for him to thereafter pass a final assessment order under section 143(3) read with section 144C(3) read with section 144B of the Income-tax Act. Accordingly, the draft assessment order dated March 8, 2025; the final assessment order dated April 7, 2025 and the demand notice dated April 7, 2025 as well as the show-cause notices dated April 7, 2025 seeking to impose penalty, are all hereby quashed and set aside.”
(emphasis supplied)
In the light of the above discussion, the impugned draft assessment order dated 28.12.2019 alongwith the notice of demand dated 28.02.2020 as also the notice dated 28.02.2020 initiating penalty proceedings against the petitioner are set aside.
The petition is allowed in the above terms.
[DEEPAK SIBAL]
JUDGE
2026
[RUPINDERJIT CHAHAL] shamsher
JUDGE
Whether speaking/reasoned : Yes / No Whether reportable : Yes / No SHAMSHER SINGH 2026.08.14 16:31 document chandigarh
More judgments on Section 144C
- Mishoo Sahay, Bangalore vs ACIT, Circle 2(1), It, KolkataITTPA 19/KOL/2026[2013-2014]Status: Disposed15 Oct 2026AY 2013-2014
- Anshu Sahay, Bangalore vs ACIT, Circle 2(1), It, KolkataITTPA 18/KOL/2026[2016-2017]Status: Disposed15 Oct 2026AY 2016-2017
- Anshu Sahay, Bangalore vs ACIT, Circle 2(1), It, KolkataITTPA 17/KOL/2026[2015-2016]Status: Disposed15 Oct 2026AY 2015-2016
- Anshu Sahay, Bangalore vs ACIT, Circle 2(1), It, KolkataITTPA 16/KOL/2026[2014-2015]Status: Disposed15 Oct 2026AY 2014-2015
- Anshu Sahay, Bangalore vs ACIT, Circle 2(1), It, KolkataITTPA 15/KOL/2026[2013-2014]Status: Disposed15 Oct 2026AY 2013-2014
Recent GST High Court judgments
Search GST case law →- M/S Kotdwar Steel Limited vs. Office Of Hte Deputy CommissionerUttarakhand · 28 Oct 2026
- M/S Kotdwar Steel Limited vs. Office Of The Deputy CommissionerUttarakhand · 28 Oct 2026
- M/S Kotdwar Steel Limited vs. Office Of The Deputy CommissionerUttarakhand · 28 Oct 2026
- M/S Govindjee Dairy Milk Private Limited vs. Central Goods And Services TaxRajasthan · 27 Oct 2026
- M/S Asian Aura vs. Government Of Nct Of Delhi And Ors.Delhi · 27 Oct 2026
