“draft assessment order”

Assessment ProceduresSection 144CSection 144C4,773 judgments

The decision most relied on for draft assessment order is ACIT v. Serajuddin & Co. (454 ITR 312), cited in 580 judgments on BharatTax.

Leading authorities on draft assessment order

ACIT v. Serajuddin & Co.

454 ITR 312 · 2023 · High Court

580

citing judgments

Approval under Section 153D of the Income Tax Act is mandatory for assessment orders in search cases. While elaborate reasons for approval are not required, the approving authority must provide some indication that it has examined the draft orders and found them to meet the requirements of law.

Principal Commissioner of Income-tax v. Subodh Agarwal

149 Taxmann.com 373 · 2023 · High Court

194

citing judgments

Approval of draft assessment orders under Section 153D must be granted with due application of mind, not mechanically. Approving multiple cases, such as 38 in a single day, without proper scrutiny amounts to mechanical approval, rendering the assessment invalid.

Vijay Television (P.) Ltd. v. DRP

369 ITR 113 · 2014 · High Court

140

citing judgments

Passing a final assessment order under Section 143(3) directly, without first issuing a draft assessment order under Section 144C(1) for an eligible assessee, constitutes a fundamental jurisdictional defect. This defect cannot be cured by a subsequent corrigendum, especially if issued beyond the prescribed period of limitation.

ESPN Star Sports Mauritius S.N.C. ET Compagnie v. Union of India

388 ITR 383 · 2016 · High Court

citing judgments

Failure to issue a draft assessment order under Section 144C(1) makes the final assessment order illegal and beyond jurisdiction. Non-compliance with Dispute Resolution Panel (DRP) directions renders the final assessment order bad in law.

JCB India Ltd. v. DCIT

398 ITR 189 · 2017 · High Court

citing judgments

The requirement to pass a draft assessment order under Section 144C of the Act is mandatory. A final assessment order issued without such a draft order is a nullity, constituting an incurable jurisdictional error that cannot be saved by Section 292B, even in set-aside proceedings following an ITAT remand.

Aggarwal v. NFAC

127 Taxmann.com 637 · High Court

citing judgments

Denying a personal hearing when specifically requested, especially after a search and during a pandemic, violates the principles of natural justice. The assessment and appellate proceedings themselves were conducted during the COVID-19 pandemic.

Hire Purchase (P.) Ltd. v. NFAC

128 Taxmann.com 190 · High Court

citing judgments

Failure to grant a personal hearing to an assessee when income is likely to be varied based on submitted evidence violates the principles of natural justice and renders the assessment order invalid.

Chandrakant Dharia v. ITO

469 ITR 262 · Reported

citing judgments

An adverse assessment order cannot be passed without granting an opportunity of personal hearing to the taxpayer. Where income is to be varied based on evidence, a personal hearing is mandatory.

Judgments citing draft assessment order

Sri. Krishna Diamonds, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bangalore

In the result, the appeal of the assessee is partly allowed for statistical purpose

ITA 232/BANG/2022[2014-15]Status: DisposedITAT Bangalore13 Sept 2022AY 2014-15

Bench: Shri George George K & Shri Laxmi Prasad Sahu

For Appellant: Shri Rohit Goutham, C.AFor Respondent: Dr. Manjunath Karkihalli, CIT (DR)

Section 234BSection 92B

ld.TPO applied TNMM method and proposed make adjustment u/s 92CA of Rs.1,84,66,332/-. The AO passed draft assessment order on 23/04/2021 making the same adjustment as suggested by the TPO u/s 92CA of the Act. 4. Feeling aggrieved from the draft assessment order, the assessee filed objections before

Nxp India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-5(1)(1), Bangalore

In the result, the appeal by the assessee is partly allowed

ITA 264/BANG/2021[2016-17]Status: DisposedITAT Bangalore13 Sept 2022AY 2016-17

Bench: Shri N.V. Vasudevan & Ms. Padmavathy S

For Appellant: Shri Vikram Vijayaraghavan, AdvocateFor Respondent: Shri V S Chakrapani, CIT(DR)(ITAT), Bengaluru

Section 143(2)Section 143(3)Section 234BSection 271(1)(c)Section 92C

made an adjustment to the ALP for an amount of Rs. 36,37,43,477. The AO passed the draft assessment order incorporating the TP adjustment and further made disallowance towards depreciation on networking equipments and mismatch in income as per Form 26AS and ITR. Aggrieved the assessee raised

Levi Strauss (India) Private Limited, Bengaluru vs. Income Tax Officer, Ward-4(1)(1), Bangalore

In the result, ground 10(c) is allowed for statistical purposes

ITA 223/BANG/2021[2016-17]Status: DisposedITAT Bangalore13 Sept 2022AY 2016-17

For Appellant: Smt.Shreya Loyalka, CAFor Respondent: Sri.Bijoy Kumar Panda, CIT-DR

Section 143(2)Section 143(3)Section 288ASection 37Section 92C

Services 88,67,335 2. AMP Expenses 148,46,00,000 Total adjustment proposed 149,34,67,335 3. The Assessing Officer passed draft assessment order on 30.12.2019 incorporating the above additions proposed by the TPO. Further, the A.O. made certain corporate tax additions / disallowances. Aggrieved, the assessee filed objections ... including consequential interest) in the notice of demand issued under section 156 of the Act by erroneously considering the adjustment as per draft assessment order of INR 151,58,13,762 in the computation sheet issued along with final assessment order (instead of adjustment

M/S Conduent Business Services India LLP, Bangalore vs. Assistant Commissioner of Income Tax Circle-4(2)(1), Bangalore

In the result, ground No.1 to 3 is allowed for statistical purposes

ITA 3346/BANG/2018[2014-15]Status: DisposedITAT Bangalore13 Sept 2022AY 2014-15

Bench: Shri N.V. Vasudevan & Shri Laxmi Prasad Sahu

For Appellant: Shri Nageswar Rao, AdvocateFor Respondent: Shri Praveen Karanth, CIT (DR)

Section 133(6)Section 143(3)Section 920

comparable companies, thereafter he computed the adjustments on 31/10/2017, which is as under:- 7. After receipt of the TP order, the AO passed draft assessment order on 11/12/2017. He considered the revised return of income filed by the assessee declaring income of Rs.77,73,37,230/- and making adjustments ... determined the taxable income at Rs.178,55,06,455/-. IT(TP)A No.3346/Bang/2018 Page 10 of 22 8. Aggrieved from the draft assessment order, the assessee field objections before the DRP. The DRP passed his order on 11/09/2018 after receipt of the DRP directions, the AO passed the final assessment

Titan Industries Limited, Hosur vs. JCIT, Chennai

The appeal stands partly allowed in terms of our above order

ITA 2239/CHNY/2012[2008-09]Status: DisposedITAT Chennai09 Sept 2022AY 2008-09

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri T. Suryanarayana (Sr. Advocate) for Ms. Manasa Ananthan (Advocate) - Ld. ARFor Respondent: Dr. S. Palani Kumar (CIT) –Ld. DR

Section 143(3)Section 14ASection 92A(1)

order by Ld. Transfer Pricing Officer (TPO) was passed on 31.10.2011, the proposal of which was incorporated in the draft assessment order dated 27.12.2011. The grounds raised by the assessee read as under: A. Transfer Pricing (Ground 1): The learned Assessing Officer ("AO") has grossly erred in facts

Toyota Tsusho India Private Limited, Ramanagara vs. The Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal is allowed in favour of the assessee

ITA 175/BANG/2022[2017-18]Status: DisposedITAT Bangalore09 Sept 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri Darpan Kriplani, CAFor Respondent: Shri V S Chakrapani, CIT(DR)(ITAT), Bengaluru

Section 143(2)Section 143(3)Section 14A

transaction. The TPO passed an order proposing TP adjustment of Rs.43,03,79,111. Consequently the AO passed the draft assessment order dated 13.4.2021 incorporating the TP adjustment and also made disallowance u/s. 14A of the Act for an amount of Rs.1,03,81,258 and disallowance towards ... final assessment order dated 11.2.2022, the AO retained the TP adjustment at Rs.43,03,79,111 as in the draft assessment order by stating that the DRP has confirmed the addition made by the TPO. The assessee is in appeal before the Tribunal against the final order

Spencer Stuart International B.V., Mumbai vs. The Asstt. CIT (International Taxation)-4(2)(2), Mumbai

In the result, appeals filed by the assessee are allowed

ITA 1148/MUM/2021[2016-17]Status: DisposedITAT Mumbai06 Sept 2022AY 2016-17

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 143(3)Section 144CSection 144C(5)Section 195Section 9(1)(vii)

issued by the DRP under section 144C(5) of the Act, without judiciously and independently considering the factual and legal objections to the draft assessment order, is illegal and bad in law. 3. The learned DRP/Assessing Officer erred in holding that a sum of Rs.6,29,16,235 received ... that the search fee was not taxable as FTS in view of Article 12(5) of the DTAA, that the AO in his draft assessment order proposed to tax the search fees under Article 12(5)(a) of the DTAA, that the DRP upheld the draft assessment order

Cerner Healthcare Solutions India Private Limited (Earlier Known As Cerner India Health Services Private Limited), Bangalore vs. Deputy Commissioner of Income Tax, Circle-2(1)(1), Bangalore

In the result, the appeal by the assessee is allowed

ITA 274/BANG/2022[2017-18]Status: DisposedITAT Bangalore06 Sept 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri Sumeet Khurana, CAFor Respondent: Shri V S Chakrapani, CIT(DR)(ITAT), Bengaluru

Section 37Section 43B

made to the TPO. The Transfer Pricing Officer [TPO] arrived at a TP adjustment of Rs.24,82,36,841. The AO passed the draft assessment order incorporating the TP adjustment and also made disallowance towards the Employee Stock Option Plan [ESOP] expenditure incurred by the assessee and disallowed customs duty ... disallowance u/s. 43B of the Act. Aggrieved, the assessee filed its objections before the DRP, who upheld the draft assessment order. In accordance with the directions of the DRP, the AO passed the final assessment order against which the assessee is in appeal before the Tribunal. Page

Schneider Electric It Business India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Ltu, Circle-2, Bangalore

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 185/BANG/2022[2017-18]Status: DisposedITAT Bangalore01 Sept 2022AY 2017-18

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariit(Tp)A No.185/Bang/2022 Assessment Year: 2017-18

For Appellant: Shri Rohit Tiwari, A.RFor Respondent: Shri Manjunath Karkihalli, D.R

Section 143(3)Section 144BSection 144C(13)Section 92D

contract manufacturing segment as 1.79% as against the actual margin of 7.70%.  Summary of Dispute Resolution Panel ("DRP")Proceedings 2.6 Aggrieved by the draft assessment order (incorporating the transfer pricing adjustment proposed by the Ld. TPO), the assessee filed its objections before

Brocade Communications Systems Private Limited, Bengluru vs. Principal Commissioner of Income Tax-1, Bengaluru

In the result, the appeal filed by the assessee stands partly allowed

ITA 656/BANG/2021[2013-14]Status: DisposedITAT Bangalore30 Aug 2022AY 2013-14

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year : 2013-14 M/S. Brocade Communications Systems Pvt. Ltd., Floor 3, B & C Wing & The Principal Floor 8, D Wing, S1 Commissioner Of Wipro Electronic City Income Tax – 1, Sez, Doddathogur Bengaluru. Vs. Village, Bengaluru – 560 100. Pan: Aaccb4490N Appellant Respondent : Smt. Tanmayee Rajkumar, Assessee By Advocate : Smt. Priyadarshini Revenue By Baseganni, Addl. Cit (Dr) Date Of Hearing : 28-07-2022 Date Of Pronouncement : 30-08-2022 Order Per Beena Pillaipresent Appeal Is Filed By The Assessee Against Order Dated 18/03/2020 Passed By The Ld.Pr.Cit For A.Y. 2013-14 On Following Grounds Of Appeal: “1. The Order Of The Principal Commissioner Of Income Tax ('Pr.Cit') Passed Under Section 263 Of The Income-Tax Act, 1961 ('The Act'), Is Bad In Law & Liable To Be Quashed. 2. The Learned Pr.Cit Erred In Law & Facts In Concluding That The Order Of The Assessing Officer ('Ao') Is "Erroneous

For Respondent: Smt. Tanmayee Rajkumar

Section 10ASection 143(3)Section 144C(5)Section 263Section 28Section 92C

arms length price to the tune of Rs.14,88,72,773/-. The said order was received by the Ld.AO on 24/10/2016 and a draft assessment order was passed that was sent to the assessee on 30/11/2016. 2.2 The assessee thereafter raised objections before the DRP and the DRP after considering ... PCIT (supra) has observed as under: “9. The next contention of the learned Counsel for the assessee was that the draft Assessment Order was passed by the AO on 21.11.2016 and the assessee filed objections before the DRP and the DRP gave its directions under section 144C

Arm Embedded Technologies Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 1(1)(1), Bengaluru

In the result, appeal of the assessee stands partly allowed

ITA 235/BANG/2021[2016-17]Status: DisposedITAT Bangalore30 Aug 2022AY 2016-17

For Appellant: 2.1 Rejecting the value of international transaction of provision of SWD and proFor Respondent: Shri T. Suryanarayana

Section 133(6)Section 143(3)Section 144C(13)Section 92D

receipt of the order passed under section 92CA by the Ld.AO, the proposed transfer pricing adjustment is the addition proposed in the draft assessment order. 2.9 Aggrieved by the Draft assessment order, the assessee raised objection before the DRP. The directions by the DRP are as follows

M/S. Edunxt Global Sdn. Bhd., Malaysia vs. Assistant Commissioner of Income Tax (International Taxation), Circle- 1(1), Bangalore

In the result the appeal of the assessee is partly allowed for statistical purposes

ITA 2529/BANG/2019[2016-17]Status: DisposedITAT Bangalore30 Aug 2022AY 2016-17

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Smt. Vandana Sagar, CIT-DR

Section 143(3)Section 144Section 9(1)(vi)

Ld.AO passed the final assessment order by making the addition in the hands of the assessee as proposed by the Ld.AO in the draft assessment order. Aggrieved by the order of Ld.AO, the non-resident assessee is in appeal before this Tribunal. 4.1 The Ld.AR submitted that the subscription

DCIT Cent. Cir. 5(2), Mumbai vs. Ipca Laboratories Ltd., Mumbai

In the result, appeal filed by the learned assessing officer is dismissed

ITA 5227/MUM/2016[2010-11]Status: DisposedITAT Mumbai29 Aug 2022AY 2010-11

Bench: Shri Prashant Maharishi, Am & Shri Pavan Kumar Gadale, Jm

For Appellant: Shri F.V. Irani, ARFor Respondent: Shri Sumit Kumar, DR

Section 801BSection 801CSection 80ISection 92C

made. Accordingly, the order under Section 92CA(3) of the Act was passed on 30th October, 2009. Consequently, a draft assessment order was passed on 25th November, 2009. The learned Assessing Officer disallowed the deduction under Section 35(2AB) of the Act of ₹4,22,000/- on the basis