The Delhi bench of the Income Tax Appellate Tribunal (ITAT) directed the Assessing Officer to finalize the assessment order under Section 144C of the Income Tax Act, 1961 due to the delay in finalizing late objections.
The draft of the Assessment Order in this particular case was issued on March 4, 2022. The assessee submitted objections before the learned Dispute Resolution Panel (DRP) on April 6, 2022, which was after the deadline for filing objections before the DRP. The deadline for issuing the final Assessment Order was May 31, 2022. However, the final Assessment Order was issued on December 27, 2022, which deviates from the deadline prescribed under Section 144C of the Income Tax Act, 1961
The Provisions of Section 144C of the Income Tax Act, 1961, are 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 in the income or loss returned which was prejudicial to the internets of such assessee.
The two member bench of the tribunal comprising C.N. Prasad ( Judicial member) and Dr. B.R.R Kumar ( Accountant member) observed that the assessee , through a letter dated April 11, 2022, informed the Assessing Officer that objections had been filed before the office of DRP-II on April 6, 2022, challenging the draft Assessment Order.
This correspondence unmistakably demonstrates that the objections were submitted to the DRP after the deadline had passed. In such a scenario, the Assessing Officer should have proceeded with finalizing the Assessment Order in accordance with the provisions outlined in Section 144C(4) of the Income Tax Act, 1961
In the result, the appeal of the assessee was allowed.
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