Sulzer Pumps India Private Limited Vs DCIT (Bombay High Court)
Bombay High Court has set aside an assessment order issued to Sulzer Pumps India Private Limited for the Assessment Year 2017-18. The company had challenged the order, arguing that the Assessing Officer (AO) had proceeded to finalize the assessment despite the company having filed a reference with the Dispute Resolution Panel (DRP).
Sulzer Pumps contended that under Section 144C(2) of the Income Tax Act, 1961, an assessee has 30 days to file objections with the DRP and inform the AO. The company believed that with the advent of faceless assessments, the DRP would automatically communicate the reference to the AO. However, this did not occur, leading the AO to pass the assessment order after the 30-day period expired, unaware of the pending DRP reference.
The High Court acknowledged that while the company failed to directly inform the AO, the reference to the DRP was indeed filed and is still pending. The court emphasized that Section 144C(4) mandates the AO to pass a final order after considering the DRP’s views. Consequently, the court quashed the assessment order, the demand notice, and the penalty notice dated June 28, 2021. The High Court directed the AO to take further action only after the DRP issues its order on Sulzer Pumps’ reference. This ruling highlights the importance of the DRP process in assessment proceedings.
