Case Law Details
M/s Ess Distribution (Mauritius) S.N.C.ET Compagnis Vs. ACIT (Delhi High Court)
Court is of the view that the both the Writ Petition (Civil) Nos. 11968 and 11971 of 2016 pertaining to AYs 2010-11 by ESS Distribution and ESS Advertising respectively deserve to be allowed.
In respect of these very Assessees and for the same AY 2010-11, the earlier draft assessment order passed by the AO under Section 144C of the Act has already been set aside by its judgment dated 23rd March 2016. That judgment referred to the order of the DRP which had held that both the Assessees were not eligible Assessee under Section 144C (15) of the Act and that order of the DRP was binding on the AO. It was further held by this Court that the AO could not have disregarded the finding directions of the DRP and passed the final assessment order. This was an issue of jurisdiction of the AO to proceed under Section 144C of the Act against an entity which is a partnership firm incorporated outside India.
The fact that is undeniable is that the AO continues to be bound by the order of the DRP which was by this Court by its decision dated 23rd March 2016 in respect of the same Assessees for the same AY 2010-11. Since the Revenue has not challenged that judgment, the AO had no option but follow the DRP’s order. Further, the AO was aware that the earlier attempt at disobeying the DRP’s order led to invalidation of the draft and the final assessment order.
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