PCIT-7 Vs Sumitomo Corporation India (P) Ltd. (Delhi High Court)
Delhi High Court held that passing of a draft assessment order as mandated under section 144C of the Income Tax Act is mandatory prior to passing of final assessment order. Accordingly, order liable to be set aside.
Facts- Microsoft India (R&D) Pvt. Ltd., the writ petitioner, is stated to have filed its Return of Income pertaining to Assessment Year 2008-09 on 30th September 2008. The said return is stated to have been selected for scrutiny assessment and pursuant to which the AO made a reference to the Transfer Pricing Officer in terms contemplated under Section 92CA of the Act.
On 27th October 2011, the TPO passed an order recommending an upward adjustment to the total income of the petitioner. DRP affirmed the additions which were proposed in the draft assessment order. Pursuant to those directions, a final assessment order came to be framed on 19 November 2012.
Aggrieved by the aforesaid, the petitioner approached the Tribunal. Tribunal allowed the appeal. Pursuant to the aforesaid order of the Tribunal, the TPO is stated to have issued a notice in the second round of proceedings which ensued on 09 November 2016. On 31 October 2018, the TPO passed its final order referable to Section 92CA computing the total upward adjustment of income at INR 106,07,00,458/-. Although the AO is thereafter stated to have issued a notice on 20 November 2018 under Section 142(1) of the Act, it proceeded to frame a final order on 28 December 2018.
