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Case Law Details

Case Name : Urvashi Narain Vs ITO (ITAT Delhi)
Appeal Number : ITA No. 1889/Del/2022
Date of Judgement/Order : 31/05/2023
Related Assessment Year : 2017-18
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Urvashi Narain Vs ITO (ITAT Delhi)

ITAT Delhi held that statue doesn’t empower the Assessing Officer to withdraw or modify or substitute the assessment order passed under Section 143(3) of the Income Tax Act with another assessment order.

Facts-The assessee is a non­resident individual. For the assessment year under dispute, AO completed the assessment u/s. 143(3) of the Act vide order dated 15.09.2021 determining the total income at Rs.6,31,98,895. Immediately thereafter, on 30.09.2021, AO passed a draft assessment order purportedly u/s. 144C(1) of the Act determining the total income at the very same figure of Rs.6,31,98,875. Against the draft assessment order, the assessee raised objections before learned Dispute Resolution Panel (DRP), inter alia, challenging the validity of the draft assessment order.

After considering the submissions of the assessee in the context of facts and material on record, DRP upheld assessee’s objection challenging the validity of the draft assessment order and accordingly issued directions to AO. However, instead of complying with the directions of DRP, AO passed the final assessment order on 27.06.2022 repeating the draft assessment order.

Conclusion- Held that once an assessment order has been passed under Section 143(3) of the Act in respect of any assessment year, the Assessing Officer cannot tinker with that assessment. Of course, he can either reopen the assessment or rectify the assessment order after strictly complying with the conditions of section 147 and 154 respectively. The statue does not confer any powers on the Assessing Officer to either withdraw or modify or substitute the assessment order passed under Section 143(3) of the Act with another assessment order. If the Assessing Officer is allowed to do so, it will lead to disastrous consequences and will give a free hand to the Assessing Officer to pass an assessment order and subsequently withdraw or modify it according to his own whims and caprices. This is not only against the scheme of the Act but against all cannons of law.

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