Case Law Details
Marriott International Licensing Company BVV Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that issuance of draft assessment order along with the demand notice is in violation of provisions of section 144C of the Income Tax Act and hence bad in law.
Facts- The assessee has challenged the order of the ld. CIT(A) in holding that the receipts raised pursuant to the International Marketing Program Participation Agreement (IMPPA for short) are taxable in India and taxing IMPAA receipts in India as ‘business income’ on the basis that the assessee has permanent establishment in India as per the provision under Article 5 of the Double Taxation Avoidance Agreement (DTAA for short) between India and Netherland. The assessee has also raised additional ground stating that the draft assessment order dated 29.12.2016 passed by the Assessing Officer (A.O. for short) along with the notice of demand u/s. 156 of the Act is in violation of section 144C of the Act and the same is bad in law.
Conclusion- Co-ordinate bench in the case of Aker Powergas P. Ltd. has held that the issuing of draft assessment order along with the demand notice is said to be not following the mandatory provisions of the Act as per section 144C of the Act, wherein the assessment order was treated as void.
We are of the considered view that the assessment order passed subsequent to the issue of draft assessment order along with the demand notice has been held to be bad in law and not just mere procedural defect.
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