SRF Ltd. Vs National Faceless Assessment Centre (Delhi High Court)
The Delhi High Court, in SRF Ltd. Vs National Faceless Assessment Centre, quashed the final assessment order dated 30 June 2021 and the consequential demand notice of ₹56,76,09,018 for Assessment Year 2017–18, holding that the assessment could not be finalised without considering the objections filed before the Dispute Resolution Panel (DRP) within the extended statutory deadline. The petitioner challenged the assessment made under Section 143(3) read with Sections 144C(3) and 144B of the Income-tax Act, 1961, contending that the Assessing Officer had disregarded the extension granted by the Central Board of Direct Taxes (CBDT).
The petitioner submitted that a draft assessment order dated 5 May 2021 had proposed total income of ₹450,02,37,902. Under Section 144C(2), objections were ordinarily required to be filed within thirty days, by 4 June 2021. However, due to the lockdown in Delhi, the petitioner’s office remained closed, and objections were filed before the DRP on 21 June 2021. The petitioner relied on CBDT Circular No. 12/2021 and Notification No. 74/2021, both dated 25 June 2021, which extended the deadline for filing DRP objections falling due on or after 1 June 2021 to 31 August 2021 and extended the assessment completion deadline to 30 September 2021.
Despite the objections being filed within the extended period, the National Faceless Assessment Centre passed the final assessment order on 30 June 2021, treating the petitioner as having opted not to file objections. The petitioner argued that this action violated Section 144C(13), which requires the Assessing Officer to complete the assessment in conformity with the directions issued by the DRP under Section 144C(5). Since the objections remained pending, the Assessing Officer could not validly finalise the assessment.
During the hearing, counsel for the Revenue stated that she had no objection to remitting the matter to the DRP. Taking note of the circumstances, the Delhi High Court quashed the final assessment order and the demand notice of ₹56.76 crore. It remitted the matter to the DRP for consideration under Section 144C and directed that the subsequent assessment be completed in accordance with Sections 144B(1)(xxix) to (xxxi) and 144C. The writ petition and pending application were accordingly disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Allowed, subject to all just exceptions.
2. Accordingly, the application stands disposed of. W.P.(C) 6484/2021 & CM APPL. 20375/2021
3. Present petition has been heard by way of video conferencing. 4. order dated 30 Present writ petition has been filed challenging the final assessment th June, 2021 passed under Section 14 3(3) read with Sections 144C(3) and 144B of the Income Tax Act, 1961 [‘the Act’] and the demand notice of Rs. 56,76,09,018/-
Act for the Assessment Year 2017-18. Petitioner also seeks directions to the Respondents not to take any action or initiate further proceedings in furtherance of the impugned assessment order and demand notice.
5. Learned counsel for the Petitioner states that vide draft assessment order dated 05th May, 2021 issued under Section 144C(1) of the Act, the total income of the Petitioner was proposed at Rs. 450,02,37,902/-. He points out that under section 144C(2), the Petitioner had thirty days (30 days) to file objections to Dispute Resolution Panel [DRP] against the draft order, i.e. by 04th
6. He emphasises that since the office of Petitioner was closed due to lockdown in Delhi, therefore, objections to the draft order could not be filed within thirty days (30 days) of receipt of the draft order, i.e. by 04 June 2021. th June, 2021 and were filed on 21st
7. He points out that the CBDT by Circular No.12 of 2021 and Notification No.74/2021 dated 25 June, 2021. th June 2021 provided relaxation in respect of time limits of certain compliances and vide para 1 of the circular, time limit to file objections to DRP, where the same were to be filed by 01st June 2021 or thereafter were extended to 31st August, 2021 and the time limit for completion of assessment was extended to 30th September 2021.
8. He states that in view of Circular No.12 of 2021 dated 25 September 2021. th June 2021, the objections under section 144(2) of the Act to the draft order dated 05th May 2021, filed on 21st June 2021 were within time.
9. He points out that the Respondent No.1 erred in considering that the Petitioner had opted not to file objections to the draft order dated 05 June 2021 were within time. th May, 2021 and in complete ignorance of the time limits extended by Circular No. 12/2021 and Notification No.74/2021 both dated th 021, passed the impugned assessment order dated 30 June 2dated 05 June 2021 under section 143(3) read with sections 144C(3) and 144B of the Act and thereby, assessed the total income at Rs.450,02,37,902/- and raised a demand of Rs.56,76,09,018/- vide demand notice issued under section 156 of the Act.
10. He contends that since the objections to draft assessment order May 2021 were filed and the same were pending disposal with the DRP, the Respondent No.1 had no jurisdiction to pass the impugned assessment under Section 143(3) read with section 144C (3). He emphasises that the mandate of Section 144C(13) of the Act is t hat on receipt of the directions of DRP under section 144C(5) of the Act, the Assessing Officer (Respondent No.1 herein) shall complete the assessment in conformity with the directions of the DRP which was not done in the present case.
11. Issue notice. Ms, Vi bhooti Malhotra accepts notice on behalf of respondents. She states that in view of the facts of the present case, she has no objection if the present matter is remitted to the DRP. Keeping in view the aforesaid, the final assessment order dated 30
12. th June, 2021 as well as the demand notice of Rs. 56,76,09,018/- (Rupees Fifty Six Crores Seventy Six Lakhs Nine Thousand and Eighteen only) issued under Section 156 of the Act for the assessment year 2017- 18 is quashed and the matter is remitted to the DRP for considerati on under Section 144(C) of the A ct. Thereafter, the assessment order shall be passed in accordance with the procedure stipulated under Section 144B(1) (xxix) to (xxxi) as well as Section 144(C) of the Act.
13. Accordingly, the present writ petition al ong with pending application stands disposed of.
14. The order be uploaded on the website forthwith. Copy of the order be also forwarded to the learned counsel through e-mail.
