FUJITSU INDIA PVT. LTD. vs. DEPUTY COMMISSIONER OF INCOME TAX 2.1 & ORS.

PDF · subscribers
W.P.(C)/5752/2021HC DelhiDLHC01018663202108 November 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA3 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the final assessment order dated 24.05.2021 was indeed passed before the expiry of the extended time for filing objections, which was 31.05.2021, as per CBDT Circular No. 8/2021. The revenue did not dispute this fact. Consequently, the Court found it appropriate to set aside the impugned final assessment order. The petitioner was granted liberty to file its objections with the Dispute Resolution Panel (DRP) within four weeks of receiving a copy of the Court's order. The DRP was directed to deal with these objections on merits once filed within the stipulated timeframe. The interim order previously granted was vacated, and the writ petition was disposed of in these terms. The Court did not decide on the procedural adherence to Section 144B, as the issue of premature passing of the order was sufficient for setting aside the assessment.

What were the facts?

The petitioner, Fujitsu India Pvt. Ltd., filed a writ petition challenging the final assessment order dated 24.05.2021 for Assessment Year 2017-18, passed under Section 144C(3) read with Section 143(3) and Section 144B of the Income Tax Act, 1961. The petitioner also challenged a Standing Order dated 31.03.2021 issued by the Central Government under Section 250(6C) of the Act. The petitioner contended that the final assessment order was flawed because the statutory procedure under Section 144B was not followed and because it was passed before the expiry of the extended period for filing objections to the draft assessment order dated 23.04.2021. The High Court had previously stayed the operation of the final assessment order and the enforcement of demand. The revenue accepted that the order was passed before the extended deadline.

What were the issues?

1. Whether the final assessment order dated 24.05.2021, passed under Section 144C(3) read with Section 143(3) and Section 144B of the Income Tax Act, 1961, is flawed due to non-adherence to the statutory procedure prescribed under Section 144B of the Act. 2. Whether the final assessment order dated 24.05.2021 was passed prematurely, i.e., before the expiry of the extended period for filing objections to the draft assessment order dated 23.04.2021, as per CBDT Circular No. 8/2021. Assessee's Contentions: The assessee argued that the final assessment order was flawed on two grounds: (i) the revenue failed to adhere to the statutory procedure under Section 144B of the Act, and (ii) the order was passed before the expiry of the extended period for filing objections to the draft assessment order, citing CBDT Circular No. 8/2021. The draft assessment order was passed on 23.04.2021, and the extended period for filing objections was until 31.05.2021, but the final order was passed on 24.05.2021. Revenue's Contentions: The revenue, through its counsel, accepted that the final assessment order was passed before the extended time prescribed under CBDT Circular No. 8/2021 for filing objections had expired.

Which sections of the Income-tax Act were involved?

Section 144C,Section 143(3),Section 144B,Section 250(6C)

AI-generated summary — verify with the full judgment below

W.P.(C)No.5752/2021 Page 1 of 3

$~20 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of Decision: 08.11.2023 + W.P.(C) 5752/2021 & CM APPL. 18066/2021

FUJITSU INDIA PVT. LTD.

..... Petitioner Through: Mr Deepak Chopra and Mr Rohan Khare, Advs.

versus

DEPUTY COMMISSIONER OF INCOME TAX 2.1 & ORS.

..... Respondents Through: Mr Kunal Sharma, Sr Standing Counsel with Ms Zehra Khan, Standing Counsel for Revenue.

Mr Bhagvan Swarup Shukla, CGSC with Mr Sarvan Kumar, Adv. for UOI.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

HON'BLE MR. JUSTICE GIRISH KATHPALIA [Physical Hearing/Hybrid Hearing (as per request)] RAJIV SHAKDHER, J. (ORAL): 1. On 03.06.2021, after hearing the learned counsel for the parties, we had broadly etched out the contours of the controversy which arises between the parties in the matter. For the sake of convenience, the relevant part of the said order is set forth hereafter: “2. Via this writ petition, challenge has been laid to the final assessment order dated 24.05.2021, concerning the assessment year („AY‟) 2017-18, passed under Section 144C(3) read with Section 143(3) and Section 144B of the Income Tax Act, 1961 (in short „the Act‟). 2.1. Besides this, there are other prayers also made in the writ petition, including a prayer for issuing a writ of mandamus, certiorari or any other appropriate writ to quash/set aside the Standing Order No. 1439(E) dated Digitally Signed By:ATUL JAIN Signing Date:28.11.2023 15:16:55 Signature Not Verified

W.P.(C)No.5752/2021 Page 2 of 3

31.03.2021, issued by the Central Government in exercise of its powers conferred under Section 250(6C) of the Act. 3. Mr. Deepak Chopra, who appears on behalf of the petitioner, says that the impugned final assessment order is flawed, broadly, for two reasons: (i) Firstly, the statutory procedure prescribed under Section 144B of the Act was not adhered to, by the respondents/revenue. (ii) Secondly, though, the period prescribed, under Section 144C(b) of the Act for filing objections to the draft assessment order dated 23.04.2021 had been extended, the impugned final assessment order dated 24.05.2021 was passed before the expiry of the said period. 3.1. In support of this plea, reliance is placed on the Central Board of Direct Taxes (in short „CBDT‟) Circular no. 8/2021 dated 30.04.2021. The relevant part of the circular reads as follows:

“b) Objections to Dispute Resolution Panel (DRP) under Section 144C of the Income-tax Act, 1961, for which the last date of filing under that Section is 1" April 2021 or thereafter, may be filed within the time provided under that Section or by 31" May 2021, whichever is later;”

4.

In this case, as indicated above, the draft assessment order under Section 144(C)(1) of the Act was passed on 23.04.2021. 4.1. As correctly submitted by Mr. Chopra, the thirty days provided for filing objections in the ordinary course, expired on 23.05.2021. However, on account of the provision contained in the aforementioned CBDT circular, the petitioner had time available to file its objections till 31.05.2021. As noted above, the final assessment order has been passed on 24.05.2021. 5. In these circumstances, we are inclined to issue notice. It is ordered accordingly. 5.1. Mr. Kunal Sharma accepts service on behalf of the respondents/revenue. 5.2. On steps being taken, notice shall be issued to respondent no. 1/UOI via all permissible modes including e-mail 6. Counter-affidavit(s) will be filed within four weeks. Rejoinder(s) thereto, if any, will be filed before the next date of hearing. 7. List the matter on 31.08.2021. 8. In the meanwhile, there shall be a stay on the operation of the impugned final assessment order, dated 24.05.2021. It is made clear that there shall also be a stay on enforcement of demand till further orders of the Court.”

2.

Mr Kunal Sharma, learned senior standing counsel, who appears on behalf of the respondents/revenue, cannot but accept that the final Digitally Signed By:ATUL JAIN Signing Date:28.11.2023 15:16:55 Signature Not Verified

W.P.(C)No.5752/2021 Page 3 of 3

assessment order was passed before the extended time, as prescribed under the Central Board of Direct Taxes (CBDT) Circular No.8/2021 dated 30.04.2021, for filing objections had expired. 3. As noted above in paragraph 4.1 of the order dated 03.06.2021, the extended time for filing objections was to expire on 31.05.2021, whereas the final assessment order was passed on 24.05.2021. 4. Since these facts are not in dispute, according to us, the best way forward would be to set aside the final assessment order dated 24.05.2021, with liberty to the petitioner to file its objections with the Dispute Resolution Panel (DRP) within four weeks of receipt of a copy of the order passed today. 5. The objections, once filed, as per the timeframe given above, will be dealt with on merits by the DRP. 6. The writ petition is disposed of in the aforesaid terms. 7. Interim order dated 03.06.2021 shall stand vacated. Consequently, the pending application, i.e., CM No.18066/2021 shall stand closed. 8. Parties will act based on the digitally signed copy of the order.

RAJIV SHAKDHER, J

GIRISH KATHPALIA, J

NOVEMBER 8, 2023

Click here to check corrigendum, if any Digitally Signed By:ATUL JAIN Signing Date:28.11.2023 15:16:55 Signature Not Verified

More judgments on Section 144C

All 3,699 judgments and leading authorities on Section 144C →

Recent GST High Court judgments

Search GST case law →