Barentz India Private Limited Vs Assessment Unit (Bombay High Court)
The petitioner challenged the final assessment order dated 28.02.2025 passed under Section 143(3) read with Section 144B of the Income-tax Act, 1961, along with the demand notice issued under Section 156 and penalty notices issued under Section 274 read with Sections 271AA(1) and 270A for Assessment Year 2022-23.
The petitioner’s principal contention was that it was an “eligible assessee” within the meaning of Section 144C(15)(b)(i) because the assessment involved an international transaction. Therefore, before passing any assessment order prejudicial to the petitioner, the Assessing Officer was required to first pass and serve a draft assessment order under Section 144C, thereby enabling the petitioner to file objections before the Dispute Resolution Panel (DRP). Instead, the Faceless Assessing Officer directly passed the final assessment order without issuing any draft assessment order.
The Revenue contended that, in the case of an Indian company, the provisions of Section 144B governed the assessment procedure rather than Section 144C. Relying on Section 144B(1)(xx) and (xxi), the Revenue requested that the matter be remanded to the Assessing Officer for passing a fresh draft assessment order and following the procedure prescribed under Section 144B.
After considering the rival submissions, the High Court held that Sections 144B(1)(xxi) to 144B(1)(xxix) expressly incorporate the procedure prescribed under Section 144C. These provisions mandate that where the assessee is an eligible assessee, the Assessing Officer must first serve a draft assessment order so that the assessee can exercise the statutory right of approaching the Dispute Resolution Panel. In the present case, no draft assessment order had been served before the final assessment order was passed. The Court held that this constituted a clear violation of Section 144C as well as Section 144B(1)(xxi) to (xxix). Consequently, the final assessment order could not be sustained.
