Assessee Not Informed AO about Income Tax Assessment Objections Pending before DRP: Bombay HC Slaps ₹10,000 Cost on Petitioner [Read Order]

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The petitioner lodged her objections to the draft order before the DRP. However, the petitioner failed to inform the assessing officer about the objections being filed before the DRP and the pendency of such objections.

K. Gopal, counsel for the petitioner, admitted that there was an omission on the petitioner’s part in not informing the AO. However, he relied on the Bombay High Court's decision in Sulzer Pumps India Pvt. Ltd. v. Dy. Commissioner of Income Tax Circle-15(3)(2) & Ors. (WPL/15811/2011) to argue that the lapse should be condoned, as the objections were, in fact, pending before the DRP.

Shilpa Goel, counsel for the respondent, contended that the AO was not entirely at fault, and once the final assessment order was passed, the DRP would become functus officio.

The bench comprising Justice M.S. Sonak and Justice Jitendra Jain noted that, although the AO was not at fault due to the petitioner’s failure to intimate him about the pendency of objections before the DRP, the peculiar facts of the present case, which were similar to those in the Sulzer Pumps India Pvt Ltd case, warranted setting aside the assessment order.

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Consequently, the petitioner was directed to deposit ₹10,000 as costs to the High Court Employees Medical Welfare Fund, Mumbai, for the lapse in procedure.

Subject to payment of such costs, the impugned assessment order shall be set aside, and the matter shall stand remitted to the DRP to proceed in accordance with the law.