The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the Assessing Officer (AO) could not withdraw or modify or substitute assessment order passed under Section 143(3) of the Income Tax Act, 1961 with another assessment order.
The assessee, Urvashi Narain was a non-resident individual. For the assessment year under dispute, the assessee filed her return of income on 23.10.2017. The return of income filed by the assessee was selected for scrutiny.
In compliance to the statutory notices issued under Section 142(1) and 143(2) of the Income-Tax Act 1961 assessee appeared before the Assessing Officer from time to time and ultimately the Assessing Officer completed the assessment under Section 143(3) of the Income Tax Act vide order dated 15.09.2021 determining the total income.
Immediately thereafter, the Assessing Officer passed a draft assessment order purportedly under Section 144C(1) of the Income Tax Act determining the total income at the very same figure.
Ved Jain, on behalf of the assessee submitted that the final assessment order was a nullity in the eyes of law as it had been passed without complying with the directions of Dispute Resolution Panel (DRP). Thus, he submitted that the final assessment order had to be declared as invalid and set aside.
Vizay Vasanta, on behalf of the department submitted that the final assessment order could not be declared as invalid as the Assessing Officer had passed it complying with the directions of learned DRP.
The two-member Bench of G.S. Pannu (President) and Saktijit Dey, (Judicial Membef) observed that as per the scheme of the Act, once an assessment order had been passed under Section 143(3) of the Income Tax Act in respect of any assessment year, the Assessing Officer could not tinker with that assessment. He could either reopen the assessment or rectify the assessment order after strictly complying with the conditions of section 147 and 154 of the Income Tax Act respectively.
The Bench allowed the appeal holding that the statute had not conferred any powers on the Assessing Officer to either withdraw or modify or substitute the assessment order passed under Section 143(3) of the Income Tax Act with another assessment order.
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