ASTRO OFFSHORE PTE. LTD.,SINGAPORE vs. DCIT, INT. TAX. CIRCLE-1(1)(1), NEW DELHI

Against the draft assessment order so passed, the assessee raised objections before learned Dispute Resolution Panel (DRP)- 1, New Delhi, on 27.01.2020. While dealing with the objections of the assessee, learned DRP noticed that the draft assessment order was served on the assessee on 18.12.2019 through email. Of course, a copy of the draft assessment order was also dispatched to the assessee through the post. Considering the fact that the objection filed by the assessee against the draft assessment order was beyond the period of limitation prescribed under Section 144C(2) of the Act, learned DRP dismissed the objection in limine.

Drawing our attention to the final assessment order, learned counsel for the assessee submitted, the assessment order passed on 12.01.2021 is beyond the period of limitation prescribed under Section 144C(4) of the Act. He submitted, the final assessment order having been passed beyond the prescribed period of limitation is invalid. In support of his contention, learned counsel relied upon the following decisions:

We have considered rival submissions in the light of decisions relied upon and perused the materials on record. Before deciding the issue at hand, the following chronological dates and events needs to be kept in mind: 18.12.2019 Draft Assessment order passed under Section 147/144/144C(1) of the Act and served on the assessee.

Thus, from the aforesaid chronological dates and events, it is very much clear that the assessee, after receipt of the draft assessment order, did not file the objections before the learned DRP within thirty days, in terms of section 144C(2)(b) of the Act. Therefore, the learned DRP has justifiably dismissed the objections of the assessee in limine, since; there are no provisions under the statute empowering learned DRP to accept the objection of the assessee beyond the period of limitation. Now, the issue arising for consideration before us is, where the assessee has not complied with the provisions of Section 144C(2)(b) of the Act; what is the period of limitation available to the Assessing Officer to complete the final assessment. For better understanding, it is necessary to look into some of the provisions of Section 144C of the Act, relevant for our purpose. They are as under: “Reference to dispute resolution panel. 144C. (1) The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation 95[***] which is prejudicial to the interest of such assessee. (2) On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order,— (a) file his acceptance of the variations to the Assessing Officer; or (b) file his objections, if any, to such variation with,— (i) the Dispute Resolution Panel; and (ii) the Assessing Officer.

Thus, a reading of the aforesaid provisions as a whole, would make it clear that the assessee has thirty days time from the date of receipt of draft assessment order to file objections before the DRP. Whereas, sub-sections (3) and (4) of section 144C make it clear that in case, the Assessing Officer does not receive any objections filed before the DRP within the period prescribed under sub-section (2) of section 144C of the Act, challenging the proposed variation, he has to complete the assessment within a period of one month from the end of the month in which the period of filing of objections under sub-section (2) expires. In the facts of the present appeal, as per Revenue’s own admission the time limit for filing the objections before learned DRP against the draft assessment order was till 17.01.2020.

Whereas, the assessee, admittedly, filed the objections on 27.01.2020, which is beyond the period of limitation. Thus, as per the mandate of sub-section (4)(b) of section 144C, the Assessing Officer was duty-bound to complete the assessment based on the draft assessment order on expiry of thirty days from the date of receipt of draft assessment order, since, by that time the assessee had not filed the objections before learned DRP. Whereas, it is a fact on record that the Assessing Officer passed the final assessment order on 12.01.2021, i.e., much beyond the period of limitation prescribed under section 144C(4)(b) of the Act.

The contention of learned Departmental Representative that before the Assessing Officer could have passed the final assessment order, the assessee filed objections before learned DRP, i.e., on 27.01.2020 and the Assessing Officer had no other option but to wait for the directions of the DRP, in our view, is unacceptable and has to be rejected at the threshold. A combined reading of the provisions contained under Section 144C(1), (2), (3) and (4) makes it abundantly clear that there is no compulsion on the Assessing Officer to wait beyond the period of limitation prescribed under the statute for completing the final assessment, anticipating that the assessee would be filing an objection before the DRP. The period of limitation prescribed under sub-sections (2) and (4) is sacrosanct and has to be strictly followed, both, by the assessee as well as the Revenue. Therefore, the final assessment order having been passed beyond the period of limitation prescribed under Section 144C(4)(b) of the Act, has to be declared invalid. Accordingly, we do so. The decisions relied upon by the learned counsel for the assessee are clearly in support of the view expressed hereinabove. Resultantly, the impugned assessment order dated 12.01.2021 is quashed. 9. In the result, the appeal is allowed as indicated above. Order pronounced in the open court on 9th December, 2021