HASMUKH DIPCHAND GARDI,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-5(2), MUMBAI

Facts

The assessee, a non-resident individual, challenged assessment orders for AYs 2013-14 to 2020-21 passed under sections 153A/143(3) of the Income Tax Act following search proceedings. The primary contention was that the Assessing Officer failed to issue a draft assessment order as mandated by Section 144C for eligible assessees, thereby rendering the final assessment orders void and without jurisdiction.

Held

The Tribunal held that the requirement to issue a draft assessment order under Section 144C is mandatory for eligible assessees and its non-compliance constitutes an incurable jurisdictional defect, not merely a procedural irregularity. Relying on various High Court judgments, including the jurisdictional Bombay High Court, the Tribunal concluded that Section 292B of the Act cannot save such orders.

Key Issues

1. Whether the final assessment orders passed without a draft assessment order under Section 144C for a non-resident eligible assessee are valid. 2. Whether the failure to adhere to Section 144C is a curable defect or a jurisdictional error.