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Facts
The assessee's appeal is against an assessment order passed u/sec.147 r.w.s.144C(3) for AY 2015-2016. The assessee's objections before the Disputes Resolution Panel (DRP) were dismissed as not maintainable and time-barred.
Held
The Tribunal held that the assessee's appeal was not maintainable as the assessee had already filed an appeal against the assessment order before the CIT(A), which was pending. The Tribunal also condoned a delay of 202 days in filing the present appeal.
Key Issues
Whether the appeal filed by the assessee is maintainable when a parallel appeal is pending before the CIT(A) and the objections before the DRP were dismissed as time-barred.
Sections Cited
147, 144C, 156
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA
PER VIJAY PAL RAO, VICE PRESIDENT :
This appeal by the Assessee is directed against the assessment order of the Assessing Officer dated 06.05.2022 passed u/sec.147 r.w.s.144C(3) of the Income Tax Act [in short "the Act"], 1961, for the assessment year 2015-2016.
2 ITA.No.65/Hyd./2023 2. At the time of hearing, learned Authorised Representative of the Assessee submitted that the Disputes Resolution Panel [in short “the DRP”] has dismissed the objections of the assessee as not maintainable and also on the ground of limitation. He has thus pleaded that the delay in filing the objections before the DRP may be condoned and the matter may be remanded to the record of the DRP for deciding the objections against the Draft Assessment Order on merits.
On the other hand, the learned DR has submitted that this appeal is not against he Final Assessment Order passed by the Assessing Officer in pursuance to the directions of the DRP, but, since the assessee did not file the objections before the DRP, therefore, the Assessing Officer passed the Final Assessment Order which is also challenged by the assessee before the learned CIT(A) which is pending adjudication. Thus, the learned DR has submitted that the appeal filed by the assessee is not maintainable as the assessment order passed by the Assessing Officer is already challenged before the learned CIT(A) and further the 3 ITA.No.65/Hyd./2023 Assessing Officer already passed the Final Assessment Order prior to the objections filed by the assessee before the DRP. The learned DR has further submitted that the DRP called for a remand report from the Assessing Officer and noted the fact that the Draft Assessment Order u/sec.144C of the Act was passed on 13.03.2022 which was also delivered to the assessee on the same date. Therefore, the objections before the DRP were required to be filed on or before 22.04.2022. Therefore, the objections of the assessee filed on 01.06.2022 were barred by limitation and before that the Final Assessment Order was passed by the Assessing Officer and consequently, the DRP could not entertain the objections when the Final Assessment Order was already passed by the Assessing Officer. The learned DR has relied upon the directions of the DRP and submitted that the DRP has rightly dismissed the objections of the assessee having no jurisdiction to adjudicate on the final order.
In the rejoinder, the learned Authorised Representative of the Assessee has submitted that since the Assessing Officer passed the Final Assessment Order,
4 ITA.No.65/Hyd./2023 therefore, the assessee also filed an appeal before the learned CIT(A) which is pending adjudication. He has further submitted that the assessee is facing pressing circumstances of recovery of the demand based on the assessment order, whereas the appeal of the assessee is pending adjudication before the learned CIT(A). The learned Authorised Representative of the Assessee has pleaded that the learned CIT(A) may be directed to decide the appeal of the assessee expeditiously.
We have considered the rival submissions and carefully perused the directions of the DRP dated 15.12.2022 as well as the assessment order passed by the Assessing Officer dated 06.05.2022. The DRP has called for a remand report from the Assessing Officer which is reproduced in Para-2.2.2 of the DRP order as under :
“2.2.2. The AO has submitted remand report which is summarised hereunder : (i) Draft order u/s.144C dated: 23.03.2022 was issued to the assessee which was delivered to the email of the assessee on the same day, i.e., 23.03.2022. (ii) In response, the assessee on 09.04.2022 while not accepting proposed the addition reiterated the same submissions as 5 ITA.No.65/Hyd./2023 made by him during assessment proceedings. This implies that the assessee was in receipt of the draft order but failed to file objections before the DRP on or before 22.04.2022 ; (iii) The time limit for passing the final order was 31.05.2022, if no objections filed within specified time: (iv) As the assessee had not filed objections final order u/s. 147 r.w.s. 144C(3) was passed and demand notice u/s. 156 issued on 06.05.2022; (v) The assessee filed submission manually on 01.06.2022 that the assessee has filed objections before the DRP on 31.05.2022 against the assessment order u/s. 147 r.w.s. 144C dated: 06.05.2022; (vi) In the Index of the paper book the assessee has enclosed Draft assessment order dt: 23-3-2022 which supports the submission of the AO that the assessee was in receipt of the draft asst. order but was misleading the DRP that he had not received the draft asst. order and due procedure not followed as the assessee was a NRI.”
5.1. Thus, it is clear that the Draft Assessment Order u/sec.144C of the Act was prepared by the Assessing Officer on 23.03.2022 and in response to the said Draft Assessment Order, the assessee filed objections before the Assessing Officer on 09.04.2022. Therefore, it is clear that instead of exercising the option to file the objection before the DRP the assessee filed objections before the Assessing Officer for 6 ITA.No.65/Hyd./2023 passing the Final Assessment Order for challenging the same by filing an appeal before the learned CIT(A). The Assessing Officer accordingly passed the Final Assessment Order dated 06.05.2022 which is challenged by the assessee before the learned CIT(A). After considering the remand report, the DRP has observed in para 2.2.3 as under :
“2.2.3. In view of the Remand Report of the AO that the final assessment order has been passed and the fact that the DRP has no jurisdiction to adjudicate on final order, the objections filed by the assessee are not maintainable and dismissed.”
The assessee has not disputed the facts as recorded by the DRP and accordingly, we do not find any merit or substance in the present appeal of the assessee whereby the assessee is rather challenging the directions of the DRP dated 15.12.2022 and not the assessment order already passed by the Assessing Officer on 06.05.2022. Accordingly, the present appeal of the assessee is not maintainable and liable to be dismissed. Since the assessee has already filed an appeal against the assessment order which is pending adjudication before the learned CIT(A) and assessee is facing an imminent coercive action of recovery,
7 ITA.No.65/Hyd./2023 therefore, in the interest of justice, the learned CIT(A) is directed to dispose of the appeal of the assessee expeditiously, preferably within three months from the date of this order.
There is a delay in filing the appeal before the Tribunal. We have heard the learned Authorised Representative of the Assessee as well as the learned DR. The assessee has filed this appeal after the order of the DRP dated 15.12.2022. However, the appeal lies only against the assessment order dated 06.05.2022 and, therefore, there is a delay in filing the present appeal. Since the assessee was pursuing the objections before the DRP which were finally dismissed being not maintainable, therefore, the time consumed in the proceedings before the DRP is excluded for the purpose of counting limitation and hence, in the facts and circumstances of the case, the delay of 202 days in filing the present appeal is condoned.
In the result, appeal of the Assessee is dismissed.