Multiplier Brand Solutions Pvt Ltd. Vs Additional Joint Deputy Assistant Commissioner of Income Tax Officer & Ors (Bombay High Court)
The petitioner challenged the assessment order dated 13.05.2021 on the ground that the respondents had not issued the mandatory draft assessment order required under Section 144B(1)(xvi)(b) of the Income-tax Act, 1961.
In the affidavit in reply affirmed on 02.08.2021, the respondents admitted that no draft assessment order had been issued. They contended that the assessment unit had reported that, since the Risk Unit had not indicated that a show-cause notice or draft assessment order should be issued, the assessment was finalized and served on the petitioner. The respondents further argued that Section 144B(1)(xvi)(b) was not mandatory and that issuance of a draft assessment order fell within the purview of the Risk Unit.
The Bombay High Court observed that it had consistently held the provisions of Section 144B to be mandatory. It noted that under Section 144B(1)(xvi)(b), where any variation prejudicial to the assessee is proposed, a draft assessment order must be issued. Since the respondents had admitted that no draft assessment order was issued, there was non-compliance with the statutory procedure.
The Court further referred to its earlier decisions holding that failure to comply with the procedure prescribed under Section 144B renders the assessment order non est in view of Section 144B(9) of the Act.
