AVL Technical Private Limited Vs DCIT (ITAT Delhi)
No Draft Order, No Assessment: ITAT Quashes TP Order Passed in Remand Without u/s 144C Compliance
Delhi ITAT allowed the appeal of AVL Technical Centre Pvt Ltd for AY 2008-09 holding that the assessment framed u/s 254/143(3) r.w.s. 144C was void ab initio as no draft assessment order was issued despite a fresh transfer pricing adjustment being proposed in the second round of proceedings. Tribunal held that issuance of a draft order u/s 144C(1) is a mandatory jurisdictional requirement whenever a variation prejudicial to the Assessee is proposed, even in remand proceedings pursuant to ITAT directions.
Rejecting the Revenue’s plea that the defect was curable u/s 292B or that a draft order issued in the first round was sufficient, ITAT relied on binding precedents including PCIT vs Sumitomo Corporation, Control Risk India (P) Ltd & Nokia India (P) Ltd to hold that failure to issue a draft order is a fatal defect. Consequently, the final assessment order dated 30.12.2016 was quashed in entirety. The appeal of the Assessee was allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeal)-44, New Delhi [for short, Ld. CIT (A)], in the Appeal No. 03/2019-20/CIT(A)-44, order dated 28.06.2019. The Assessment was framed by Ld. Deputy Commissioner Income Tax [for short, Ld. DCIT], Circle-3(2), New Delhi for the AY 2008-09, u/s 254/143(3) r.w.s 144C of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), vide his order dated 30.12.2016.
