Almatis Alumina Private Limited Vs A/DCIT (Calcutta High Court)
The writ petition concerned the statutory scheme under Section 144C of the Income-tax Act, 1961, particularly the role of the Dispute Resolution Panel (DRP) and the enforceability of a tax demand raised without completion of final assessment. The petitioner challenged the action of the Income Tax Authorities in attempting to enforce a demand arising from a notice dated March 16, 2021 issued under Section 156, which accompanied a draft assessment order under Section 144C(1) for the assessment year 2017–18. The petitioner contended that although objections were duly filed before the DRP, no final assessment order was passed within the statutory time limit prescribed under Section 144C(13), and therefore no enforceable demand existed in law.
The petitioner had filed its return declaring nil income under normal provisions and reported a book loss under Section 115JB. Since international transactions were undertaken with associated enterprises, a reference was made to the Transfer Pricing Officer (TPO), who proposed an adjustment of Rs. 41.13 crore. Consequently, the draft assessment order incorporating the variation was issued along with a notice of demand and penalty notice. The petitioner filed objections before the DRP within the prescribed time, and the authorities were informed accordingly.
