Sanko Svance JRG Tooling India P. Ltd. Vs ACIT (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, ruled against the assessment order dated 29.09.2021 passed under Section 144C(13) of the Income Tax Act for the assessment year 2016-17 in the case of Sanko Svance JRG Tooling India P. Ltd. The assessee challenged the validity of both the original assessment order dated 12.12.2019 and the subsequent order dated 29.09.2021. A key argument presented by the assessee’s counsel was that the Assessing Officer (AO) had directly issued a final assessment order on 12.12.2019, accompanied by a demand and penalty notice, without first issuing a draft assessment order as mandated under Section 144C(1) of the Act. This procedural lapse, the counsel argued, rendered the final assessment order invalid from its inception, relying on a precedent from the Madras High Court in the case of ACIT vs. Vijay Televisions (P) Ltd.
The ITAT concurred with the assessee’s contention, observing that the initial order was indeed passed under Section 143(3) and not Section 144C(1), further evidenced by the issuance of demand and penalty notices. The Tribunal cited the Madras High Court’s ruling, which held that a final assessment order issued without following the mandatory procedure of a draft assessment order under Section 144C cannot be rectified by a subsequent corrigendum. Consequently, the ITAT deemed the assessment order dated 12.12.2019 as without jurisdiction and quashed it. Additionally, the Tribunal noted that the subsequent assessment order dated 29.09.2021, passed purportedly to give effect to the Dispute Resolution Panel (DRP) directions, was also time-barred, exceeding the stipulated timeframe even after considering the relaxations provided under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Based on these findings, the ITAT ruled both assessment orders invalid and without jurisdiction, allowing the assessee’s appeal on legal grounds.
FULL TEXT OF THE ORDER OF ITAT DELHI
