Case Law Details
FedEx Express Transportation and Supply Chain Services (India) Private Limited Vs DCIT (ITAT Mumbai)
The case of FedEx Express Transportation and Supply Chain Services (India) Private Limited Vs DCIT (ITAT Mumbai) revolves around the validity of a Transfer Pricing order, draft assessment order, and the consequent final assessment order. The key contention is whether the mistake of passing the draft assessment order in the name of a non-existent entity constitutes a jurisdictional defect that renders the entire assessment proceedings void.
In this case, FedEx Express Transportation and Supply Chain Services (India) Private Limited (FEIPL) amalgamated with another company, and the assessment proceedings were being carried out in the name of FEIPL. The Transfer Pricing Officer (TPO) passed an order under Section 92CA(3) of the Act and the Assessing Officer passed the draft assessment order under Section 143(3) r.w.s. 144C(1) of the Act in the name of FEIPL. However, on the date of these orders, FEIPL had ceased to exist due to the amalgamation. This scenario presented a jurisdictional issue.
The core question was whether a legally valid draft assessment order is mandatory to establish jurisdiction under Section 144C of the Act. The draft assessment order plays a crucial role as it affects the assessment of the income or loss of the assessee. The draft assessment order is considered a final order from the perspective of the Department. The draft order provides the foundation for the commencement of DRP proceedings and the subsequent final assessment order. Therefore, it is mandatory for the Assessing Officer to pass a valid draft assessment order before proceeding with the assessment under Section 144C of the Act.
The legal position is supported by the judgments of the Hon’ble Bombay High Court and other High Courts, emphasizing the necessity of a valid draft assessment order. These judgments have clarified that a draft assessment order is not merely a procedural step but holds jurisdictional significance. Failure to issue a valid draft assessment order, especially in the case of an “eligible assessee,” renders the subsequent proceedings void.
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