SUZUKI MOTOR CORPORATION vs. ASSISTANT COMMISSIONER OF INCOME TAX

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W.P.(C)/16244/2024HC DelhiDLHC01084135202422 November 2024Bench: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE DR. JUSTICE SWARANA KANTA SHARMA3 pages
AI SummaryAllowed

What did the High Court hold?

The Delhi High Court held that it was not necessary to delve into the controversy of whether the Assessee had informed the AO about the pending objections before the DRP. The Court found it undisputed that if an objection has been filed and is pending before the DRP, any assessment order passed in ignorance of such objection is required to be set aside. Consequently, the Court allowed the petition, setting aside the notice under Section 221(1) of the Act, the impugned assessment order dated May 22, 2024, and the impugned notice under Section 156 of the Act for AY 2022-23. The ratio decidendi is that an assessment order passed without considering pending objections before the DRP is invalid.

What were the facts?

The petitioner, Suzuki Motor Corporation (Assessee), filed a writ petition before the Delhi High Court challenging an assessment order dated May 22, 2024, passed under Section 143(3) read with 144C(3) of the Income Tax Act, 1961, and a notice dated May 22, 2024, under Section 156 of the Act. The assessment year in question is 2022-23. The Assessee had filed its return declaring an income of ₹46,37,40,26,590/-. A draft assessment order was issued on March 19, 2024, proposing to tax sales of spare parts and capital goods to associate entities in India as attributable to the Assessee's Permanent Establishment (PE) in India. The Assessee filed objections before the Dispute Resolution Panel (DRP) on April 18, 2024. Despite the objections being pending before the DRP, the Assessing Officer (AO) issued a notice on July 18, 2024, indicating a demand of ₹98,50,41,470/-. The Assessee contended that no demand could be raised as the final assessment order was not passed, but later discovered the impugned order and notice had been passed and uploaded.

What were the issues?

1. Whether the assessment order passed by the Assessing Officer (AO) is liable to be set aside when objections filed by the Assessee were pending before the Dispute Resolution Panel (DRP)? (Question of law and fact, turning on Section 144C of the Income Tax Act, 1961). Assessee's Contention: The Assessee argued that the AO passed the assessment order and issued a demand notice despite its objections being pending before the DRP. The Assessee claimed to have informed the AO about filing the objections, though this was contested by the Revenue. Revenue's Contention: The Revenue submitted that the AO passed the assessment order because the Assessee had not furnished information regarding the filing of objections before the DRP to the AO.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(3),Section 156,Section 143(2),Section 142(1),Section 144C(1),Section 221(1)

AI-generated summary — verify with the full judgment below

W.P.(C) 16244/2024 Page 1 of 3

$~45 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 16244/2024 & CM APPL. 68356-57/2024

SUZUKI MOTOR CORPORATION .....Petitioner Through: Mr Ajay Vohra, Sr Advocate with Mr Neeraj Jain, Mr Anshul Sachar and Mr Tavish Verma, Advocates.

versus

ASSISTANT COMMISSIONER OF INCOME TAX .....Respondent Through: Mr Sunil Aggarwal, SSC, Mr Shivansh B Pandya, Mr Viplav Acharya, JSCs and Mr Utkarsh Tiwari, Advocate.

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

HON'BLE MS. JUSTICE SWARANA KANTA SHARMA

O R D E R %

22.11.2024 1. Issue notice. 2. The learned counsel for the Revenue accepts notice. 3. The petitioner –Suzuki Motor Corporation (hereafter Assessee) – has filed the present petition, inter alia, impugning the assessment order dated 22.05.2024 (hereafter the impugned order) passed under Section 143(3) read with 144C(3) of the Income Tax Act, 1961 (hereafter the Act) as well as the notice dated 22.05.2024 (hereafter the impugned notice) issued under Section 156 of the Act. 4. The Assessee had filed its Income Tax Return (ITR) for the assessment year (AY) 2022-23 declaring an income of ₹46,37,40,26,590/-. The Assessee received a notice dated 31.05.2023 issued under Section This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 03/07/2025 at 08:19:36

W.P.(C) 16244/2024 Page 2 of 3

143(2) of the Act for the purposes of assessing the petitioner’s taxable income. Thereafter, a notice under Section 142(1) of the Act was issued along with a questionnaire. 5. The Assessing Officer (hereafter AO) issued the draft assessment order dated 19.03.2024 under Section 144C(1) of the Act whereby the sales of spare parts and capital goods by the Assessee to its associate entities in India, were sought to be brought in the net of tax as being attributable to the Assessee’s permanent establishment (PE) in India. 6. The Assessee filed its objection in the Form No. 35A dated 18.04.2024 before the Dispute Resolution Panel (hereafter DRP). The Assessee claims that on the same date, the Assession also filed a copy of the objections in the office of the AO. 7. Notwithstanding, the Assessee’s objection were pending before the DRP, the AO issued a notice dated 18.07.2024 under Section 221(1) of the Act indicating that a total demand of ₹98,50,41,470/- was pending for the AY 2022-23. According to the Assessee, no such demand could be raised as the final assessment order was not passed. However, on making further enquiries, it was found that the impugned order was passed by the AO and was uploaded on the portal along with the copy of the impugned notice under Section 156 of the Act. The Assessee also contends that no real time alert was sent to its registered email ID. 8. Mr Aggarwal, the learned counsel appearing for the Revenue submits that the previous AO has passed the assessment order as the information regarding filing of the objections before the DRP was not furnished by the Assessee to the AO. 9. This is stoutly contested by Mr Vohra, the learned senior counsel This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 03/07/2025 at 08:19:36

W.P.(C) 16244/2024 Page 3 of 3

appearing on behalf of the Assessee. He also points out that in fact the Assessee had informed the AO regarding filing the objections before the DRP but he had not acknowledged the same. 10. It is not necessary for this court to examine this controversy in further detail as it is not disputed that notwithstanding, the lack of information with the AO, if an objection has been filed and is pending before the DRP, the assessment order passed in ignorance of the said objection is required to be set aside. 11. In view of the above, the present petition is allowed. The notice under Section 221(1) of the Act in respect of the AY 2022-23; the impugned order dated 22.05.2024; and the impugned notice under Section 156 of the Act, are set aside. 12. The petition is allowed in the aforesaid terms. Pending applications also stands disposed of.

VIBHU BAKHRU, J

SWARANA KANTA SHARMA, J NOVEMBER 22, 2024 M

Click here to check corrigendum, if any This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 03/07/2025 at 08:19:36

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