M/s. Oracle India Private Limited, New Delhi V. Addl. CIT, New Delhi

ITA 6741/DEL/2013

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5543 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I2
• Next Hearing Date: 19-07-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 24-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NAVEEN DHAMISA
• Keywords: Rectification of order; Period of limitation; Initiation of penalty proceedings
• Section: 143(3); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I-2 NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER & SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.AS. NO.6288/DEL/2013 ASSESSMENT YEARS: 2006-07 ADDL. CIT, RANGE-13, NEW DELHI. V. ORACLE INDIA PVT. LTD., F-01/02, 1 ST FLOOR, SALCON RAS VILAS, D-1, DISTRICT CENTRE, SAKET, NEW DELHI. TAN/PAN: AAACO 0158L (APPELLANT) (RESPONDENT) I.T.AS. NO.6741/DEL/2013 ASSESSMENT YEARS: 2006-07 ORACLE INDIA PVT. LTD., F-01/02, 1 ST FLOOR, SALCON RAS VILAS, D-1, DISTRICT CENTRE, SAKET, NEW DELHI V. ADDL. CIT, RANGE-13, NEW DELHI. TAN/PAN: AAACO 0158L (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI TARANDEEP SINGH, ADV & SHRI NAVEEN DHAMISA, CA. RESPONDENT BY: SHRI H.K. CHOUDHARY, CIT-D.R. DATE OF HEARING: 18 01 2018 DATE OF PRONOUNCEMENT: 13 04 2018 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID CROSS APPEALS HAVE BEEN FILED BY THE ASSESSEE AS WELL AS BY THE REVENUE AGAINST FINAL AS SESSMENT I.T.AS. NO.6288 & 6741/DEL/2013 2 ORDER DATED 30 TH OCTOBER, 2013, PASSED BY LEARNED ASSESSING OFFICER U/S.143(3) R.W.S. 144C, IN PURSUANCE OF DIR ECTION GIVEN BY THE DISPUTE RESOLUTION PANEL-II, NEW DELHI (DRP) U/S.144C(5), VIDE ORDER DATED 16.08.2013 FOR THE AS SESSMENT YEAR 2006-07. 2. WE WILL FIRST TAKE UP THE ASSESSEES APPEAL WHE REIN ASSESSEE HAS RAISED AS MANY AS 29 GROUNDS WITH VARI OUS SUB- GROUNDS CHALLENGING THE MERITS OF THE ADDITIONS MAD E BY THE ASSESSING OFFICER, WHEREAS IN REVENUES APPEAL ALSO AS MANY AS 11 GROUNDS HAVE BEEN RAISED CHALLENGING THE ISSU ES WHICH HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE D RP. 3. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE, M R. TARANDEEP SINGH, SUBMITTED THAT ASSESSEE HAS ALSO F ILED AN ADDITIONAL GROUND WHICH IN FACT IS CLARIFICATION OF GROUND NO.2 RAISED BY THE ASSESSEE IN THE ORIGINAL APPEAL MEMO, WHEREBY ASSESSEE IS CHALLENGING THE IMPUGNED ORDERS THAT IT IS VOID AB INITIO PASSED IN CONTRAVENTION OF THE PROVISION OF SECTION 144C. IN THE SAID GROUND IT HAS BEEN HIGHLI GHTED THAT IN THIS CASE THE ASSESSING OFFICER INSTEAD OF PASSI NG A DRAFT ASSESSMENT ORDER AS REQUIRED U/S 144C HAS PASSED F INAL ASSESSMENT ORDER U/S 143(3) ON 2 ND NOVEMBER, 2012 WHICH WAS NOT IN ACCORDANCE WITH THE PROVISION OF SECTION 144C(1) R.W.S. SUB-SECTION (2) AND (3) THERETO, AND THEREFO RE, IN VIEW OF THE VARIOUS JUDGMENTS OF HON'BLE JURISDICTIONAL HIGH COURT, THE SAID ORDER IS UNSUSTAINABLE IN LAW AND CONSEQUE NTIALLY THE ENTIRE PROCEEDINGS AND ORDER NEEDS TO BE QUASHE D. I.T.AS. NO.6288 & 6741/DEL/2013 3 4. HIGHLIGHTING THE BRIEF FACTS AND BACKGROUND OF THE CASE, HE SUBMITTED THAT ASSESSEE IS WHOLLY OWNED SUBSIDIA RY OF ORACLE SYSTEM CORPORATION, USA. IT HAS FILED ITS RE TURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 27.11.20 06 AT AN INCOME OF RS.1,59,40,87,230/-. THE SAID RETURN W AS SELECTED FOR SCRUTINY AND LATER ON THE MATTER WAS R EFERRED TO SPECIAL AUDITOR FOR CARRYING OUT AUDIT U/S.142(2A) VIDE DIRECTION DATED 29.12.2009. LATER ON, IN PURSUANCE OF DIRECTION GIVEN BY THE HON'BLE HIGH COURT IN A WRIT PETITION SPECIAL AUDITOR WAS GRANTED EXTENSION OF TIME FOR C OMPLETION OF AUDIT AND FINALLY THE REPORT WAS SUBMITTED ON 4. 9.2012 WHICH WAS FILED BEFORE THE ASSESSING OFFICER ON 12. 10.2012. AFTER RECEIVING OF THE SPECIAL AUDIT REPORT ON 04.0 9.2012, THE TIME PERIOD FOR COMPLETION OF ASSESSMENT AS PER SEC TION 153 WAS UP TILL 3 RD NOVEMBER, 2012. THIS IS ALSO ACCEPTED BY ASSESSING OFFICER, WHICH IS EVIDENT FROM LETTER DAT ED 27.09.2012 ISSUED BY ADDL. CIT, RANGE-13 TO THE ASS ESSEE, THE RELEVANT EXTRACT OF WHICH IS REPRODUCED HEREUND ER: TO, THE PRINCIPAL OFFICER, M/S. ORACLE INDIA PVT. LTD., F-01/02, 1 ST FLOOR, SALCON RAS VILLAS, D-1, DISTRICT CENTRE, SAKET, NEW DELHI-17 SIR, SUB: ADJOURNMENT OF HEARING DATED. 26.09.2012 FOR A .Y. 2006- 07- REG. REF: YOUR LETTER DATED. 26.09.2012, ASKING FOR ADJO URNMENT OF HEARING. WITH REFERENCE TO THE SUBJECT CITED ABOVE. I.T.AS. NO.6288 & 6741/DEL/2013 4 TOUR LETTER DATED. 26.09.2012, ASKING FOR ADJOURNME NT OF THE HEARING FIXED ON 26.09.2012, WAS RECEIVED WHERE IN YOU HAVE MENTIONED THAT YOU ARE IN THE PROCESS OF COLLECTING DETAILS AND IN DRAFTING A REPLY. YOU HAVE ALSO MENTIONED THAT YOU ARE IN THE PROCESS OF OBTAINING A SOFT COPY OF THE SPECIAL AUD IT REPORT AND ITS ANNEXURES FORM THE SPECIAL AUDITOR TO ANALYZE T HE DATA THEREIN. AS YOU ARE UNABLE TO GIVE A REPLY TO ANY OF THE QUE RIES THAT YOU WERE REQUIRED TO SUBMIT ON 26.09.2012, YOU ARE AGAIN GIVEN ANOTHER OPPORTUNITY TO SUBMIT THE SAME ON 01.10.201 2 AT 3PM AT MY OFFICE. HOWEVER, YOU ARE REQUIRED TO NOTE THAT T HE SPL. AUDIT REPORT WAS SUBMITTED TO YOU ON 04.09.2012 AND THAT THE ASSESSMENT IS REQUIRED TO BE COMPLETED WITHIN 60 DA YS OF THE AUDIT. IT MUST BE NOTED THAT OPPORTUNITY THAT CAN B E GIVEN TO YOU FOR REPRESENTING YOUR POSITION AND CLAIMS, AND THE VERIFICATION OF THE SAME IS GOVERNED BY THIS LIMITATION. 5. THE ASSESSING OFFICER HAD IN FACT PASSED THE ASSESSMENT ORDER ON 2 ND NOVEMBER, 2012, WHICH READ AS ORDER U/S. 143(3), (THE COPY OF WHICH HAS BEEN PLAC ED FROM PAGES 71 ONWARDS IN THE PAPER BOOK FILED ON 30.01.2 017). FROM THE SAID ORDER, LD. COUNSEL POINTED OUT THAT T HIS WAS A FINAL ASSESSMENT ORDER DULY ACCOMPANIED WITH NOTICE OF DEMAND U/S.156 AND ALSO A SHOW CAUSE NOTICE U/S. 27 4 R.W.S. 271 OF THE INCOME TAX ACT. THE SAID ORDER HOWEVER C ANNOT BE RECKONED AS LEGALLY SUSTAINABLE ORDER AS IT HAS NOT BEEN PASSED IN TERMS OF PROCEDURES ENSHRINED IN SECTION 144C. AS PER THE SAID PROVISION, THE ASSESSING OFFICER HAS T O FIRST PASS A PROPOSED DRAFT ASSESSMENT ORDER IF HE PROPOSES TO M AKE ANY VARIATION IN THE INCOME OR LOSS RETURN; AND IT IS A FTER THE RECEIPT OF SUCH ORDER THE ASSESSEE IS ELIGIBLE TO F ILE EITHER HIS I.T.AS. NO.6288 & 6741/DEL/2013 5 ACCEPTANCE FOR THE VARIATION TO THE ASSESSING OFFIC ER OR FILE OBJECTION TO SUCH VARIATION BEFORE THE DRP WITHIN 3 0 DAYS OF RECEIPT OF THE DRAFT ASSESSMENT ORDER. ONCE, THE AS SESSEE HAS INTIMATED TO THE ASSESSING OFFICER EITHER THE ACCEP TANCE OR MAKES NO OBJECTION WITHIN THE SPECIFIED PERIOD THEN ASSESSING OFFICER COMPLETES ASSESSMENT ON THE BASIS OF THE DR AFT ASSESSMENT ORDER. THUS, HERE IN THIS CASE, THERE IS A CLEAR VIOLATION OF SECTION 144C (1); (2) AND (3). AFTER H AVING PASSED THE FINAL ASSESSMENT ORDER ON 2-11-2012, IMMEDIATEL Y AFTER FIVE DAYS OF COMPLETION OF FINAL ASSESSMENT ORDER, THE ASSESSING OFFICER ON 07.11.2012 HAD PASSED CORRIGEN DUM ORDER DATED 07.11.2012, WHICH READS AS UNDER: TO, THE PRINCIPAL OFFICER, M/S. ORACLE INDIA PRIVATE LIMITED, F-01/02, 1 ST FLOOR, SALCON RAS VILLAS, D-1, DISTRICT CENTRE, SAKET, NEW DELHI-110017 SIR/MADAM, SUB: ORDER DATED.02.11.2012 FOR THE ASSESSMENT YEAR 2006-07 REG. THE ORDER DATED 02.11.2012 FOR ASSESSMENT YEAR MAY BE READ AS, A DRAFT ORDER U/S.144C READ WITH SECTION 143(3) OF THE INCOME TAX ACT, 1961. THEREFORE, THE DEMAND NOTICE/PENALTY NOT ICE, STANDS WITHDRAWN AND NOT ENFORCEABLE. YOU HAVE THE OPTION TO APPLY BEFORE DRP OR CIT (A) FOR RESOLUTION OF DISPUTE. 6. MR. TARANDEEP SINGH SUBMITTED THAT SUCH A CORRIGENDUM ORDER CAN NEITHER BE RECKONED AS DRAFT ASSESSMENT ORDER NOR ORDER PASSED U/S.154; AND OTHE RWISE I.T.AS. NO.6288 & 6741/DEL/2013 6 ALSO SUCH A CORRIGENDUM ORDER IS BEYOND THE LIMITAT ION PERIOD AS PRESCRIBED UNDER SECTION 153, BECAUSE THE OUTER LIMIT FOR PASSING THE ASSESSMENT ORDER WAS 03.11.2012. ACCORD INGLY, HE SUBMITTED THAT ONCE THE ASSESSMENT ORDER WAS PAS SED ON 02.11.2012 WHICH WAS A FINAL ASSESSMENT ORDER, THEN NO ORDER COULD HAVE BEEN PASSED BY THE ASSESSING OFFIC ER EITHER RECTIFYING THE SAME OR BY WAY OF A CORRIGENDUM SO A S TO SAY THAT SUCH AN ORDER PASSED BY HIM WAS A DRAFT ASSESS MENT ORDER. IN SUPPORT, HE STRONGLY RELIED UPON THE JUDG MENT OF HON'BLE MADRAS HIGH COURT IN THE CASE OF VIJAY TELEVISION PVT. LTD. VS. DRP AND ORS, REPORTED IN (2014) 369 I TR 113 (MAD.), WHEREIN THE HON'BLE HIGH COURT HAS HELD THAT IF ASSESSING OFFICER HAS PASSED A FINAL ASSESSMENT ORD ER U/S.143(3) INSTEAD OF PASSING THE DRAFT ASSESSMENT ORDER U/S.144C, THEN THERE IS A CLEAR CUT VIOLATION OF PR OCEDURE LAID DOWN UNDER THE ACT, AND THEREFORE, SUCH AN ORDER NE EDS TO BE SET ASIDE/CANCELLED, HIS LORDSHIP IN THE SAID JUDGM ENT HAS CLARIFIED THAT A SUBSEQUENT CORRIGENDUM ISSUED BY T HE ASSESSING OFFICER MODIFYING THE FINAL ORDER OF THE ASSESSMENT TO BE READ AS DRAFT ASSESSMENT ORDER AFTER THE LIMI TATION PERIOD, WOULD NOT CURE THE DEFECT IN THE EXISTING O RIGINAL ORDER. THIS JUDGMENT OF MADRAS HIGH COURT CLEARLY CL INCHES THE ISSUE IN FAVOUR OF THE ASSESSEE AND HENCE THE I MPUGNED FINAL ASSESSMENT ORDER PASSED BY THE ASSESSING OFFI CER ON 30 TH OCTOBER, 2013 IS UNSUSTAINABLE. HE FURTHER SUBMITT ED THAT THIS JUDGMENT OF HON'BLE MADRAS HIGH COURT HAS BEEN FOLLOWED BY THE HON'BLE JURISDICTIONAL HIGH COURT B Y THE DIVISION BENCH IN THE CASE OF TURNER INTERNATIONAL PVT. LTD. VS. DCIT, REPORTED IN (2017) 82 TAXMANN.COM 125 (DE L), I.T.AS. NO.6288 & 6741/DEL/2013 7 WHEREIN THEIR LORDSHIPS WHILE INTERPRETING THE PROV ISION OF SECTION 144C(1) HELD THAT; FAILURE OF ASSESSING OFF ICER TO ADHERE TO THE MANDATORY REQUIREMENT OF SECTION 144C (1) WOULD RESULT IN INVALIDATION OF THE FINAL ASSESSMEN T ORDER AND CONSEQUENTLY THE ENTIRE DEMAND AND PENALTY PROCEEDI NGS. AGAIN SIMILAR PRINCIPLE HAS BEEN REITERATED IN A VE RY DETAILED MANNER BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF JCB INDIA LTD. VS. DCIT, IN WP(C) NO.3399/2016 VIDE JUDGMENT AND ORDER DATED 17.09.2017, WHEREIN AGAIN T HEIR LORDSHIPS HAVE HELD THAT SUCH A DEFECT IS NOT CURAB LE EVEN U/S.292B. THUS, IN THE WAKE OF SUCH BINDING PRECEDE NCE OF HON'BLE JURISDICTIONAL HIGH COURT, THE IMPUGNED FIN AL ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER HA S TO BE DECLARED AS INVALID BEING BARRED BY LIMITATION. 7. ON THE OTHER HAND, LEARNED DR, APPEARING ON BE HALF OF THE REVENUE SUBMITTED THAT HERE IN THIS CASE THOUGH THE FINAL ASSESSMENT ORDER WAS PASSED ON 02.11.2012, BUT IMMEDIATELY THEREAFTER THE ASSESSING OFFICER REALIZ ED HIS MISTAKE AND RECTIFIED THE SAME BY ISSUING A CORRIGE NDUM ON 07.11.2012, WHEREBY HE HAS CLEARLY CLARIFIED THAT T HE EARLIER ORDER SHOULD BE READ AS DRAFT ASSESSMENT ORDER U/S. 144C R.W.S. 143(3) AND THE ENTIRE DEMAND AND PENALTY NOT ICES STAND WITHDRAWN AND SHALL NOT BE ENFORCEABLE. SUCH A CORRIGENDUM HAS BEEN PASSED MUCH BEFORE THE TIME LI MIT PRESCRIBED IN THE DEMAND NOTICE, I.E., LESS THAN 30 DAYS. DISTINGUISHING THE JUDGMENT OF HON'BLE MADRAS HIGH COURT IN THE CASE OF VIJAY TELEVISION (SUPRA) , HE SUBMITTED THAT THERE IS AN OBSERVATION BY THE COURT THAT THE ASSESSING O FFICER HAD I.T.AS. NO.6288 & 6741/DEL/2013 8 CALLED FOR PETITIONER TO PAY THE TAX AMOUNT AND ALS O LEVY PENALTY U/S.271 WHICH IS ABSENT HERE IN THIS CASE, BECAUSE THE GRACE PERIOD OF 30 DAYS HAD NOT EXPIRED IN THE CASE OF THE ASSESSEE AND WITHIN 5 DAYS OF PASSING OF THE ORDER, CORRIGENDUM WAS ISSUED. HENCE IN SUCH CIRCUMSTANCES , IT CANNOT BE HELD THAT DEMAND STILL EXISTED. HERE IN T HIS CASE BY VIRTUE OF THIS CORRIGENDUM ISSUED BY THE ASSESSING OFFICER ON 07.11.2012, IT IS ARDENTLY CLEAR THAT THE ORDER PAS SED BY THE ASSESSING OFFICER ON 02.11.2012 WAS ONLY A DRAFT AS SESSMENT ORDER WHICH WAS PASSED WITHIN THE TIME LIMIT PRESCR IBED UNDER THE ACT. HE FURTHER SUBMITTED THAT HERE IN TH IS CASE, THE DRP HAS ENTERTAINED THE DRAFT ASSESSMENT ORDER AND THIS ISSUE WAS NOT RAISED BEFORE THE DRP THAT SUCH AN OR DER IS NOT A DRAFT ASSESSMENT ORDER OR IT SUFFERS ANY LEGAL IN FIRMITY. THIS ONLY GOES TO SHOW THAT ASSESSEE ITSELF TREATED IT A S DRAFT ASSESSMENT ORDER. HENCE, IT CANNOT BE HELD THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS TIME BARRED AND THE LETTER ISSUED BY THE ASSESSING OFFICER IS ONLY CLARIFICATO RY THAT EARLIER ORDER SHOULD BE READ AS DRAFT ASSESSMENT ORDER AND THE ENTIRE DEMAND NOTICE WAS WITHDRAWN. THUS, HE SUBMITTED THA T THE ORDER DATED 02.11.2012 IS A DRAFT ASSESSMENT ORDER PASSED WITHIN THE LIMITATION TIME AND CONSEQUENTLY THE FIN AL ASSESSMENT ORDER IS CORRECT IN LAW. 8. BY WAY OF REJOINDER, MR. TARANDEEP SINGH, POINT ED OUT THAT THIS PRECISE ISSUE AND FACTS WERE ALSO INVOLVE D IN THE CASE BEFORE THE HON'BLE MADRAS HIGH COURT WHEREIN WITHIN THE PERIOD OF 30 DAYS AS GIVEN IN THE DEMAND NOTICE COR RIGENDUM ORDER WAS PASSED WITHDRAWING THE SAID DEMAND NOTICE AS WELL I.T.AS. NO.6288 & 6741/DEL/2013 9 AS THE PENALTY NOTICE AND ALSO THE ASSESSING OFFICE R HAD MENTIONED THAT EARLIER ORDER SHOULD BE READ AS DRAF T ASSESSMENT ORDER. IN THAT CASE ALSO, THERE WAS AN A RGUMENT BY THE DEPARTMENT THAT THE DRP HAS ENTERTAINED THE SAID ORDER AS DRAFT ASSESSMENT ORDER, AND THEREFORE, ONC E THE PETITIONER COMPANY HAD APPROACHED THE DRP TREATING THE ORDER PASSED BY THE ASSESSING OFFICER AS DRAFT ASSE SSMENT ORDER THEN PETITIONER COMPANY IS ESTOPPED FROM QUES TIONING THE SAME VERY ORDER THOUGH IT IS A FINAL ORDER. THI S PARTICULAR ARGUMENT HAS SPECIFICALLY BEEN REJECTED BY THE HON' BLE HIGH COURT. HE FURTHER RELIED UPON THE DECISION OF ITAT MUMBAI BENCH IN THE CASE OF LIONBRIDGE TECHNOLOGIES PVT. LTD. VS. DCIT, REPORTED IN (2015) 171 TTJ 684 (MUM.), WHEREIN IN THAT CASE WHERE THE ASSESSMENT WAS RESTORED BACK BY THE TRIBUNAL TO THE STAGE OF PASSING OF THE DRAFT ASSES SMENT ORDER AND THEREAFTER THE ASSESSING OFFICER HAD PASSED A F RESH ASSESSMENT ORDER WITHOUT ADHERING TO PROVISION OF S ECTION 144C (1), WITHIN THE TIME LIMIT PRESCRIBED, THEN SU CH AN ASSESSMENT ORDER IS NOT ENFORCEABLE IN LAW. THUS, I N THE LIGHT OF THE JUDICIAL PRECEDENCE AND WITHOUT THERE BEING A NY CONTRARY DECISION OF JURISDICTIONAL HIGH COURT ON T HIS POINT, THE IMPUGNED FINAL ASSESSMENT ORDER NEEDS TO BE QUA SHED ON THE GROUND THAT THE EARLIER ORDER PASSED BY THE ASS ESSING OFFICER ON 02.11.2012 WAS THE FINAL ASSESSMENT ORDE R, WITHOUT FOLLOWING THE PROCEDURE LAID DOWN U/S.144C( 1) AND CONSEQUENTLY, THE IMPUGNED ORDER IS BAD IN LAW AS T HE CORRIGENDUM PASSED BY THE ASSESSING OFFICER RECTIFY ING THE EARLIER ORDER IS CLEARLY BARRED BY LIMITATION AND W OULD NOT CURE THE LEGAL DEFECT CREPT IN THE SAID ORDER. I.T.AS. NO.6288 & 6741/DEL/2013 10 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT FACTS QUA THE ISSUE OF LIMITATION RAISED BY THE ASSESSEE BY WAY OF ADDITIONAL GROUND. FIRST OF ALL, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS MERELY A CLARIFICATION OF ISSUE RAISED BY THE ASSESSEE IN OR IGINAL GROUND NO.2 AND IN ANY CASE BEING AN ISSUE OF LIMITATION A ND JURISDICTIONAL ISSUE, THE SAME CAN BE RAISED AT ANY STAGE IF ALL THE MATERIAL ON RECORD ARE AVAILABLE TO DECIDE SUCH AN ISSUE AND DOES NOT REQUIRE ANY INVESTIGATION OF FACT. HEN CE IN VIEW OF THE HONBLE SUPREME COURT JUDGMENT IN THE CASE O F NATIONAL THERMAL POWER COMPANY LTD. VS. CIT, REPORTED IN (1998) 229 ITR 383 ; AND IN THE LIGHT OF THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY, REPORTED IN 397 ITR 37 4 , WE ARE ADMITTING THE ADDITIONAL GROUND RAISED BY TH E ASSESSEE. 10. FROM THE FACTS AS DISCUSSED ABOVE, FOLLOWING CHRONOLOGY OF EVENTS CAN BE CULLED OUT: PARTICULARS DATE DATE OF COMMENCEMENT OF SPECIAL AUDIT 09-MAR-2012 SPECIAL AUDIT REPORT ISSUED BY AUDITOR 04-SEP-2012 TIME PERIOD FOR COMPLETION OF ASSESSMENT AS PER SEC TION 153 OF THE INCOME TAX ACT - ALSO ACKNOWLEDGED BY AO VIDE LETTER DATED 27 TH SEPTEMBER 2012 03 - NOV - 2012 ASSESSMENT ORDER PASSED BY AO U/S 143(3) OF THE INC OME TAX ACT - DEMAND NOTICE U/S 156, SHOW CAUSE NOTICE U/S 274 AND ITNS-150 ISSUED 02 - NOV - 2012 I.T.AS. NO.6288 & 6741/DEL/2013 11 CORRIGENDUM ISSUED BY AO - DEMAND NOTICE, PENALTY NOTICE WITHDRAWN 07 - NOV - 2012 OBJECTIONS FILED BEFORE DRP AS PER SECTION 144C OF THE ACT 04-DEC-2012 DRP DIRECTIONS ISSUED ON 16 - AUG - 2013 ASSESSMENT ORDER U/S 143(3) R.W.S. 144C PASSED BY T HE AO 30-0CT-2013 HERE IN THIS CASE, IT IS AN UNDISPUTED FACT THAT LI MITATION FOR PASSING THE DRAFT ASSESSMENT ORDER IN TERMS OF SECT ION 153 WAS EXPIRING ON 03.11.2012. THE ASSESSING OFFICER H AD IN FACT PASSED THE ASSESSMENT ORDER ON 02.11.2012, BUT IT W AS PASSED U/S. 143(3) AS FINAL ASSESSMENT AND SAID ASS ESSMENT ORDER ALSO ACCOMPANIED WITH DEMAND NOTICE U/S.156 A ND A SHOW CAUSE NOTICE U/S. 274. THE SAID ASSESSMENT ORD ER CLEARLY WAS A FINAL ASSESSMENT ORDER AND WAS NOT IN ACCORDANCE WITH PROCEDURE LAID DOWN IN SECTION 144C SUB SECTION (1), (2) & (3), WHICH FOR THE SAKE OF READY REFERENCE IS REPRODUCED HEREUNDER: 144C (1) THE ASSESSING OFFICER SHALL, NOTWITHSTANDING A NYTHING TO THE CONTRARY CONTAINED IN THIS ACT, IN THE FIRST INSTAN CE, FORWARD A DRAFT OF THE PROPOSED ORDER OF ASSESSMENT (HEREAFTER IN T HIS SECTION REFERRED TO AS THE DRAFT ORDER) TO THE ELIGIBLE ASS ESSEE IF HE PROPOSES TO MAKE, ON OR AFTER THE 1ST DAY OF OCTOBER, 2009, ANY VARIATION IN THE INCOME OR LOSS RETURNED WHICH IS PREJUDICIAL TO THE INTEREST OF SUCH ASSESSEE. (2) ON RECEIPT OF THE DRAFT ORDER, THE ELIGIBLE ASS ESSEE SHALL, WITHIN THIRTY DAYS OF THE RECEIPT BY HIM OF THE DRAFT ORDE R, (A ) FILE HIS ACCEPTANCE OF THE VARIATION S TO THE ASSESSING OFFICER; OR I.T.AS. NO.6288 & 6741/DEL/2013 12 (B ) FILE HIS OBJECTIONS, IF ANY, TO SUCH VARIATION WITH, (I) THE DISPUTE RESOLUTION PANEL; AND (II) THE ASSESSING OFFICER. (3) THE ASSESSING OFFICER SHALL COMPLETE THE ASSESS MENT ON THE BASIS OF THE DRAFT ORDER, IF (A ) THE ASSESSEE INTIMATES TO THE ASSESS ING OFFICER THE ACCEPTANCE OF THE VARIATION; OR (B ) NO OBJECTIONS ARE RECEIVED WITHIN TH E PERIOD SPECIFIED IN SUB- SECTION (2). 11. FROM THE PLAIN READING OF THE AFORESAID PROVI SION, IT IS CLEAR THAT THE ASSESSING OFFICER HAS TO FORWARD A D RAFT ASSESSMENT ORDER TO THE ASSESSEE IF HE PROPOSES TO MAKE ANY VARIATION IN THE INCOME OR LOSS RETURN WHICH IS PRE JUDICIAL TO THE INTEREST OF THE ASSESSEE. ON RECEIPT OF THE SAI D DRAFT ASSESSMENT ORDER, THE ASSESSEE IS ELIGIBLE WITHIN T HE TIME PERIOD OF 30 DAYS OF RECEIPT OF SUCH ORDER EITHER T O FILE ITS ACCEPTANCE ON SUCH VARIATION BEFORE THE ASSESSING O FFICER; OR CAN FILE HIS OBJECTION TO SUCH VARIATION WITH THE D RP. IT WAS ONLY WHEN THE ASSESSEE INTIMATES TO THE ASSESSING O FFICER THAT HE HAS ACCEPTED THE VARIATION OR RAISES NO OBJECTIO N WITHIN 30 DAYS, THEN HE HAS TO COMPLETE THE ASSESSMENT ON THE BASIS OF THE DRAFT ASSESSMENT ORDER. HERE IN THIS CASE, CLEA RLY THE ASSESSING OFFICER HAS NOT ADHERED TO THE PROCEDURE LAID DOWN U/S.144C AS THE ASSESSMENT ORDER DATED 02.11.2012 W HICH THOUGH WAS PASSED UNDER THE PERIOD OF LIMITATION, B UT WAS PASSED AS FINAL ASSESSMENT ORDER INSTEAD OF DRAFT ASSESSMENT ORDER WHICH HE COULD NOT HAVE PASSED UNDER THE EXP RESSED PROVISION OF THE LAW AS STATED ABOVE. SUCH AN ASSES SMENT ORDER LATER ON HAS BEEN STATED BY THE ASSESSING OFF ICER THAT IT I.T.AS. NO.6288 & 6741/DEL/2013 13 SHOULD BE READ AS DRAFT ASSESSMENT ORDER U/S.144C R.W.S. 143(3) AND ALSO STATED THAT DEMAND NOTICE/PENALTY NOTICE STAND WITHDRAWN AND WILL NOT BE ENFORCEABLE. BY WAY OF SUCH CORRIGENDUM LETTER DATED 07.11.2012, THE ASSESSING OFFICER IS NOW SEEKING TO VALIDATE THE FINAL ASSESSMENT ORDER BY STATING THAT IT SHOULD BE TREATED AND READ AS DRAFT ASSESS MENT ORDER. NOW WHETHER SUCH SUBSEQUENT CORRIGENDUM LETTER ISSU ED AFTER PERIOD OF LIMITATION CAN VALIDATE THE EARLIER ASSES SMENT ORDER, WHICH ADMITTEDLY HAS BEEN PASSED IN COMPLETE VIOLAT ION OF PROCEDURE LAYS DOWN IN SECTION 144C. THIS PRECISE I SSUE AS POINTED OUT BY THE LEARNED COUNSEL HAD BEEN DISCUSS ED THREADBARE BY THE SINGLE JUDGE OF HONBLE MADRAS HI GH COURT IN THE CASE OF VIJAY TELEVISION (SUPRA), THE RELEVAN T OBSERVATION AND THE FINDINGS OF THE HON'BLE HIGH CO URT READS AS UNDER: 21. AS RIGHTLY POINTED OUT BY THE LEARNED SENIOR C OUNSEL FOR THE PETITIONERS, IN THE ORDER PASSED ON 26.03.2013, THE SECOND RESPONDENT EVEN RAISED A DEMAND AS ALSO IMPOSED PEN ALTY. SUCH DEMAND HAS TO BE RAISED ONLY AFTER A FINAL ORDER HA S BEEN PASSED DETERMINING THE TAX LIABILITY. THE VERY FACT THAT T HE TAXABLE AMOUNT HAS BEEN DETERMINED ITSELF WOULD SHOW THAT IT WAS P ASSED AS A FINAL ORDER. IN FACT, A NOTICE FOR DEMAND UNDER SEC TION 156 OF THE ACT WAS ISSUED PURSUANT TO SUCH ORDER DATED 26.03.2013 OF THE SECOND RESPONDENT. BOTH THE ORDER DATED 26.03.2013 AND THE NOTICE FOR DEMAND THEREOF HAVE BEEN SERVED SIMULTANEOUSLY ON T HE PETITIONER. THEREFORE, NOT ONLY THE ASSESSMENT IS COMPLETE, BUT ALSO A NOTICE DATED 28.03.2013 WAS ISSUED THEREON CALLING UPON TH E PETITIONER TO PAY THE TAX AMOUNT AS ALSO PENALTY UNDER SECTION 27 1 OF THE ACT. THEREAFTER, THE PETITIONER WAS GIVEN AN OPPORTUNITY OF HEARING ON 12.04.2013. SUBSEQUENTLY, THE SECOND RESPONDENT REA LISED THE I.T.AS. NO.6288 & 6741/DEL/2013 14 MISTAKE IN PASSING A FINAL ORDER INSTEAD OF A DRAFT ASSESSMENT ORDER WHICH RESULTED IN ISSUING A CORRIGENDUM ON 15 .04.2013. IN THE CORRIGENDUM IT WAS ONLY STATED THAT THE ORDER P ASSED ON 26.03.2013 UNDER SECTION 143C OF THE ACT HAS TO BE READ AND TREATED AS A DRAFT ASSESSMENT ORDER AS PER SECTION 143C READ WITH SECTION 93CA (4) READ WITH SECTION 143(3) OF T HE ACT. IN AND BY THE ORDER DATED 15.04.2013, THE SECOND RESPONDENT G RANTED THIRTY DAYS TIME TO ENABLE THE ASSESSEE TO FILE THEIR OBJE CTIONS. ON RECEIPT OF THE CORRIGENDUM DATED 15.04.2013, THE PETITIONER COMPANY APPROACHED THE FIRST RESPONDENT, BUT THE FIRST RESP ONDENT DECLINED TO ISSUE ANY DIRECTION TO THE ASSESSMENT OFFICER ON THE GROUND THAT THE FIRST RESPONDENT HAS GOT JURISDICTION ONLY TO E NTERTAIN SUCH AN APPEAL IF THE ORDER PASSED BY THE SECOND RESPONDENT IS A PRE- ASSESSMENT ORDER. THEREFORE, IT IS EVIDENT THAT THE FIRST RESPONDENT DECLINED TO ENTERTAIN THE OBJECTIONS RAISED BY THE PETITIONER COMPANY ON THE GROUND THAT THE ORDER PASSED BY THE SECOND RESPONDENT IS NOT A DRAFT ASSESSMENT ORDER, RATHER IT IS A FINAL ORDER. THUS, THE FIRST RESPONDENT HAD TREATED THE O RDER DATED 26.03.2013 OF THE SECOND RESPONDENT AS A FINAL ORDE R AND THEREFORE IT REFUSED TO ENTERTAIN THE OBJECTIONS FILED ON BEH ALF OF THE PETITIONER COMPANY. 22. AS MENTIONED SUPRA, AS PER SECTION 144C(1) OF T HE ACT, THE SECOND RESPONDENT-ASSESSING OFFICER HAS NO RIGHT TO PASS A FINAL ORDER PURSUANT TO THE RECOMMENDATIONS MADE BY THE T PO. IN FACT, THE SECOND RESPONDENT-ASSESSING OFFICER HIMSELF HAS ADMITTED BY VIRTUE OF THE CORRIGENDUM DATED 15.04.2013, THAT TH E ORDER DATED 26.03.2013 IS ONLY A FINAL ORDER AND IT WAS DIRECTE D TO BE TREATED AS A DRAFT ASSESSMENT ORDER. IN THIS CONTEXT, IT IS WO RTHWHILE TO REFER TO THE DECISION OF THE HONOURABLE SUPREME COURT IN THE DECISION REPORTED IN (DEEPAK AGRO FOODS VS. STATE OF RAJASTH AN AND OTHERS) REPORTED IN (2008) 16 VST 454 (SC) WHEREIN IN PARA NO.10, THE I.T.AS. NO.6288 & 6741/DEL/2013 15 HONOURABLE SUPREME COURT DISCUSSED AS TO WHEN AN OR DER COULD BE CONSTRUED AS A FINAL ORDER:- 10. SHRI RAJIV DUTTA, LEARNED SENIOR COUNSEL APPEA RING ON BEHALF OF THE APPELLANT, SUBMITTED THAT IN THE LIGH T OF ITS AFORE- EXTRACTED OBSERVATIONS AND A CLEAR FINDING THAT THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 1995-96 HAD BEEN ANTI -DATED, THE ORDER WAS NULL AND VOID. IT WAS URGED THAT ASSE SSMENT PROCEEDINGS AFTER THE EXPIRY OF THE PERIOD OF LIMIT ATION BEING A NULLITY IN LAW, THE HIGH COURT SHOULD HAVE ANNULLED THE ASSESSMENT AND THERE WAS NO QUESTION OF A FRESH ASS ESSMENT. THUS, THE NUB OF THE GRIEVANCE OF THE APPELLANT IS THAT IN REMANDING THE MATTER BACK TO THE ASSESSING OFFICER, THE HIGH COURT HAS NOT ONLY EXTENDED THE STATUTORY PERIOD PR ESCRIBED FOR COMPLETION OF ASSESSMENT, IT HAS ALSO CONFERRED JUR ISDICTION UPON THE ASSESSING OFFICER, WHICH HE OTHERWISE LACK ED ON THE EXPIRY OF THE SAID PERIOD. 23. IT IS EVIDENT FROM THE ABOVE DECISION OF THE H ONOURABLE SUPREME COURT THAT IF AN ORDER IS PASSED BEYOND THE STATUTORY PERIOD PRESCRIBED, SUCH ORDER IS A NULLITY AND HAS NO FORCE OF LAW. IN THAT CASE BEFORE THE HONOURABLE SUPREME COURT, THE PERIOD FOR ASSESSMENT PROCEEDINGS EXPIRED AND THEREAFTER, FRES H ASSESSMENT ORDERS HAVE BEEN ISSUED BY ANTI-DATING IT. IN THOSE CIRCUMSTANCES, IT WAS HELD THAT THE HIGH COURT OUGHT NOT TO HAVE REMA NDED THE MATTER BACK TO THE ASSESSMENT OFFICER AND BY DOING SO, THE STATUTORY PERIOD PRESCRIBED FOR COMPLETION OF ASSES SMENT HAS BEEN EXTENDED BY CONFERRING JURISDICTION UPON THE ASSESS ING OFFICER, WHICH HE OTHERWISE LACKED ON THE EXPIRY OF THE SAID PERIOD. IN THAT CASE, THE HONOURABLE SUPREME COURT ALSO HELD THAT T HERE IS A DISTINCTION BETWEEN AN ORDER WHICH IS A NULLITY AND AN ORDER WHICH IS IRREGULAR AND ILLEGAL. WHERE AN AUTHORITY MAKING ORDER LACKS INHERENT JURISDICTION, SUCH AN ORDER WILL BE NULL A ND VOID AB INITIO, I.T.AS. NO.6288 & 6741/DEL/2013 16 AS THE DEFECT OF JURISDICTION GOES TO THE ROOT OF T HE MATTER AND STRIKES AT HIS VERY AUTHORITY TO PASS ANY ORDER AND SUCH A DEFECT CANNOT BE CURED EVEN BY CONSENT OF THE PARTIES. 24. THIS DECISION SQUARELY APPLIES TO THE FACTS OF THIS CASE. IN THIS CASE, THE ORDER PASSED BY THE SECOND RESPONDENT LAC KS JURISDICTION ESPECIALLY WHEN IT IS BEYOND THE PERIOD OF LIMITATI ON PRESCRIBED BY THE STATUTE. WHEN THERE IS A STATUTORY VIOLATION IN NOT FOLLOWING THE PROCEDURES PRESCRIBED, SUCH AN ORDER CANNOT BE CURE D BY MERELY ISSUING A CORRIGENDUM. XXX XXX XXX XXX XXX XXX XXX 33. THE DECISION OF THE DIVISION BENCH OF THE ANDH RA PRADESH HIGH COURT DEALS WITH AN IDENTICAL ISSUE AS THAT OF THE PRESENT CASE. IN THIS CASE, AGAINST THE ORDER PASSED BY THE SECOND R ESPONDENT ON 26.03.2013, THE PETITIONER FILED OBJECTIONS BEFORE THE DRP, THE FIRST RESPONDENT HEREIN AND THE FIRST RESPONDENT REFUSED TO ENTERTAIN IT BY STATING THAT THE ORDER PASSED BY THE SECOND RESP ONDENT IS A FINAL ORDER AND IT HAD JURISDICTION TO ENTERTAIN OBJECTIO NS ONLY IF IT IS A DRAFT ASSESSMENT ORDER. WHILE SO, THE ORDER DATED 2 6.03.2013 OF THE SECOND RESPONDENT CAN ONLY BE TERMED AS A FINAL ORDER AND IN SUCH EVENT IT IS CONTRARY TO SECTION 144C OF THE AC T. AS MENTIONED SUPRA, IN AND BY THE ORDER DATED 26.03.2013, THE SE COND RESPONDENT DETERMINED THE TAXABLE AMOUNT AND ALSO I MPOSED PENALTY PAYABLE BY THE PETITIONER. ACCORDING TO THE LEARNED SENIOR COUNSEL FOR THE PETITIONERS, EVEN AS ON THIS DATE, THE WEBSITE OF THE DEPARTMENT INDICATE THE AMOUNT DETERMINED BY THE SE COND RESPONDENT PAYABLE BY THE COMPANY INSPITE OF ISSUAN CE OF THE CORRIGENDUM ON 15.04.2013 AS A TAX DUE AMOUNT. THUS , WHILE ISSUING THE CORRIGENDUM, THE SECOND RESPONDENT DID NOT EVEN WITHDRAW THE TAXABLE AMOUNT DETERMINED BY HIM OR UP DATED THE STATUS IN THE WEBSITE. IN ANY EVENT, SUCH AN ORDER DATED I.T.AS. NO.6288 & 6741/DEL/2013 17 26.03.2013 PASSED BY THE SECOND RESPONDENT CAN ONLY BE CONSTRUED AS A FINAL ORDER PASSED IN VIOLATION OF T HE STATUTORY PROVISIONS OF THE ACT. THE CORRIGENDUM DATED 15.04. 2013 IS ALSO BEYOND THE PERIOD PRESCRIBED FOR LIMITATION. SUCH A DEFECT OR FAILURE ON THE PART OF THE SECOND RESPONDENT TO ADHERE TO T HE STATUTORY PROVISIONS IS NOT A CURABLE DEFECT BY VIRTUE OF THE CORRIGENDUM DATED 15.04.2013. BY ISSUING THE CORRIGENDUM, THE RESPOND ENTS CANNOT BE ALLOWED TO DEVELOP THEIR OWN CASE. THEREFORE, FOLLO WING THE ORDER PASSED BY THE DIVISION BENCH OF THE ANDHRA PRADESH HIGH COURT, WHICH WAS ALSO AFFIRMED BY THE HONOURABLE SUPREME C OURT BY DISMISSING THE SPECIAL LEAVE PETITION FILED THEREOF , ON 27.09.2013, THE ORDERS, WHICH ARE IMPUGNED IN THESE WRIT PETITI ONS ARE LIABLE TO BE SET ASIDE. 12. IN THE AFORESAID JUDGMENT, THE HON'BLE HIGH COU RT HAD DEALT WITH PRECISELY THE SAME SITUATION, WHEREIN TH E ASSESSING OFFICER HAD PASSED THE ASSESSMENT ORDER ON 26.03.20 13 WHICH WAS A FINAL ASSESSMENT ORDER AND LATER ON THE ASSESSING OFFICER HAD ISSUED A CORRIGENDUM ON 15.04 .2013, I.E., WITHIN THE PERIOD OF 30 DAYS AS GIVEN IN THE DEMAND NOTICE STATING THAT THE FINAL ASSESSMENT ORDER DATE D 26.03.2013 SHOULD BE READ AS DRAFT ASSESSMENT ORDER . IN THE SAID JUDGMENT, ONE OF THE ARGUMENT TAKEN BY THE REVE NUE BEFORE THE HON'BLE HIGH COURT WHICH HAS BEEN TAKEN BY THE LEARNED DR ALSO BEFORE US, THAT ONCE THE ASSESSEE H AS APPROACHED THE DRP, THEN ASSESSEE IS ESTOPPED FROM QUESTIONING THE SAME ORDER EVEN THOUGH IT WAS FINAL ASSESSMENT ORDER. THE HON'BLE HIGH COURT HAS TURNED DOWN SUCH A PLEA OF THE REVENUE. FURTHER THE HON'BLE HIG H COURT REFERRING TO THE JUDGMENT OF HON'BLE SUPREME COURT IN THE I.T.AS. NO.6288 & 6741/DEL/2013 18 CASE OF DEEPAK AGRO FOODS VS. STATE OF RAJASTHAN AND OTHERS, REPORTED IN (2008) 16 VST 454 (SC) , HELD THAT IF AN ORDER HAS BEEN PASSED BEYOND THE STATUTORY PERIOD P RESCRIBED THEN SUCH AN ORDER IS NULLITY AND HAS NO FORCE IN L AW AND CONSEQUENTLY THE CORRIGENDUM ISSUED BY THE ASSESSIN G OFFICER CANNOT NULLIFY THE PERIOD OF LIMITATION. FURTHER HO N'BLE COURT ALSO OBSERVED THAT THE ASSESSMENT ORDER DATED 26.03 .2013 HAS TO BE RECKONED AS THE FINAL ASSESSMENT ORDER WH ICH WAS IN CONTRAVENTION OF SECTION 144C AND ANY SUBSEQUENT CORRIGENDUM BEYOND THE PERIOD OF LIMITATION WILL NO T CURE THE DEFECT AND WILL NOT REVIVE THE LIMITATION. THUS, FR OM THE AFORESAID JUDGMENT FOLLOWING COROLLORY OR PROPOSITI ON CAN BE CULLED OUT:- FIRSTLY, THE PROCEDURE LAID DOWN U/S.144C IS TO BE STRICTLY ADHERED TOO AND SUCH A NON ADHERENCE CANNO T BE CURED; SECONDLY, WHEN THERE IS A VIOLATION OF THE STATUTE AND JURISDICTION/LIMITATION CEASES TO EXIST, THE ORDER C ANNOT BE CURED MERELY BY ISSUING A CORRIGENDUM AND; LASTLY, CORRIGENDUM ISSUED AFTER A PERIOD OF LIMITA TION FOR WHICH JURISDICTION TO PASS ORDER CEASES THEN IT CANNOT REVIVE LIMITATION. THE DEFECT IS FATAL WHICH CANNOT BE CURED EVEN BY CONSENT. 13. THE AFORESAID PROPOSITION OF THE HON'BLE MADRA S HIGH COURT HAD BEEN REFERRED AND FOLLOWED BY THE DIVISIO N BENCH OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE O F TURNER I.T.AS. NO.6288 & 6741/DEL/2013 19 INDIA PVT. LTD., WHEREIN THEIR LORDSHIPS HAD OBSERVED AND HELD AS UNDER: 10. THE SHORT GROUND ON WHICH THE AFOREMENTIONED F INAL ASSESSMENT ORDERS AND THE CONSEQUENT DEMAND NOTICES HAVE BEEN CHALLENGED IS THAT THERE WAS NON-COMPLIANCE WITH TH E MANDATORY PROVISION CONTAINED IN SECTION 144C(1) OF THE ACT R EQUIRING THE AO TO FIRST FRAME DRAFT ASSESSMENT ORDERS. 11. THE QUESTION WHETHER THE FINAL ASSESSMENT ORDER STANDS VITIATED FOR FAILURE TO ADHERE TO THE MANDATORY REQ UIREMENTS OF FIRST PASSING DRAFT ASSESSMENT ORDER IN TERMS OF SECTION 144C(1) OF THE ACT IS NO LONGER RES INTREGRA. THERE IS A LONG SERI ES OF DECISIONS TO WHICH REFERENCE WOULD BE MADE PRESENTLY. 12. IN ZUARI CEMENT LTD. VS. ACIT (DECISION DATED 2 1ST FEBRUARY, 2013 IN WP(C) NO.5557/2012), THE DIVISION BENCH (DB ) OF THE ANDHRA PRADESH HIGH COURT CATEGORICALLY HELD THAT T HE FAILURE TO PASS A DRAFT ASSESSMENT ORDER UNDER SECTION 144C(1) OF THE ACT WOULD RESULT IN RENDERING THE FINAL ASSESSMENT ORDE R 'WITHOUT JURISDICTION, NULL AND VOID AND UNENFORCEABLE.' IN THAT CASE, THE CONSEQUENT DEMAND NOTICE WAS ALSO SET ASIDE. THE DE CISION OF THE ANDHRA PRADESH HIGH COURT WAS AFFIRMED BY THE SUPRE ME COURT BY THE DISMISSAL OF THE REVENUE'S SLP (C) [CC NO. 1669 4/2013] ON 27TH SEPTEMBER, 2013. 13. IN VIJAY TELEVISION (P) LTD. V. DISPUTE RESOLUTION PANEL [2014] 369 ITR 113 (MAD.), A SIMILAR QUESTION AROSE . THERE, THE REVENUE SOUGHT TO RECTIFY A MISTAKE BY ISSUING A CORRIGENDUM AFTER THE FINAL ASSESSMENT ORDER WAS PA SSED. CONSEQUENTLY, NOT ONLY THE FINAL ASSESSMENT ORDER B UT ALSO THE CORRIGENDUM ISSUED THEREAFTER WAS CHALLENGED. FOLLOWING THE DECISION OF THE ANDHRA PRADESH HIGH COURT IN ZU ARI CEMENT LTD. V. ACIT (SUPRA) AND A NUMBER OF OTHER DECISIONS, TH E MADRAS HIGH COURT IN VIJAY TELEVISION (P) LTD. V. DISPUTE RESOL UTION PANEL (SUPRA) I.T.AS. NO.6288 & 6741/DEL/2013 20 QUASHED THE FINAL ORDER OF THE AO AND THE DEMAND NO TICE. INTERESTINGLY, EVEN AS REGARDS THE CORRIGENDUM ISSU ED, THE MADRAS HIGH COURT HELD THAT IT WAS BEYOND THE TIME PERMISS IBLE FOR ISSUANCE OF SUCH CORRIGENDUM AND, THEREFORE, IT COU LD NOT BE SUSTAINED IN LAW. 14. RECENTLY, THIS COURT IN ESPN STAR SPORTS MAURIT IUS S.N.C. ET COMPAGNIE V. UNION OF INDIA [2016] 388 ITR 383 (DEL .), FOLLOWING THE DECISION OF THE ANDHRA PRADESH HIGH COURT IN ZU ARI CEMENT LTD. V. ACIT (SUPRA) , THE MADRAS HIGH COURT IN VIJAY TE LEVISION (P) LTD. V. DISPUTE RESOLUTION PANEL (SUPRA) AS WELL AS THE BOMBAY HIGH COURT IN INTERNATIONAL AIR TRANSPORT ASSOCIATION V. DCIT (2016) 290 CTR (BOM) 46, CAME TO THE SAME CONCLUSION. 15. MR. DILEEP SHIVPURI, LEARNED COUNSEL FOR THE RE VENUE SOUGHT TO CONTEND THAT THE FAILURE TO ADHERE TO THE MANDATORY REQUIREMENT OF ISSUING A DRAFT ASSESSMENT ORDER UNDER SECTION 144C (1) OF THE ACT WOULD, AT BEST, BE A CURABLE DEFECT. ACCORDING TO H IM THE MATTER MUST BE RESTORED TO THE AO TO PASS A DRAFT ASSESSME NT ORDER AND FOR THE PETITIONER, THEREAFTER, TO PURSUE THE MATTE R BEFORE THE DRP. 16. THE COURT IS UNABLE TO ACCEPT THE ABOVE SUBMIS SION. THE LEGAL POSITION AS EXPLAINED IN THE ABOVE DECISIONS IN UNA MBIGUOUS. THE FAILURE BY THE AO TO ADHERE TO THE MANDATORY REQUIREMENT OF SECTION 144C (1) OF THE ACT AND FIRS T PASS A DRAFT ASSESSMENT ORDER WOULD RESULT IN INVALIDATION OF THE FINAL ASSESSMENT ORDER AND THE CONSEQUENT DEMAND NO TICES AND PENALTY PROCEEDINGS. 17. FOR THE AFOREMENTIONED REASONS, THE FINAL ASSES SMENT ORDERS DATED 31ST MARCH, 2015 PASSED BY THE AO FOR AYS 200 7-08 AND 2008-09, THE CONSEQUENTIAL DEMAND NOTICES ISSUED BY THE AO AND THE INITIATION OF PENALTY PROCEEDINGS ARE HEREBY SE T ASIDE. [EMPHASIS IN BOLD IS OURS] I.T.AS. NO.6288 & 6741/DEL/2013 21 14. THUS, THE HON'BLE JURISDICTIONAL HIGH COURT HA S CLEARLY HELD THAT IF THE ASSESSING OFFICER HAS NOT MANDATOR ILY ADHERED TO THE REQUIREMENTS OF FIRST PASSING THE DRAFT ASS ESSMENT ORDER IN TERMS OF SECTION 144C (1), THEN IT WOULD RESULT IN VALIDATION OF FINAL ASSESSMENT ORDER AND CONSEQUENT LY THE ENTIRE DEMAND AND PENALTY PROCEEDINGS ENSUED IS ILL EGAL. THIS JUDGMENT WAS AGAIN DISCUSSED IN DETAIL BY THE SUBSE QUENT JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF JCB INDIA LTD. (SUPRA), WHEREIN THE HON'BLE HIGH COURT AFTER EXTENSIVELY QUOTING THE CASE OF TURNER INTERN ATIONAL INDIA PVT. LTD. VS. DCIT, REPORTED IN (2017) 82 TAX MANN.COM 125 (DEL.), HAD OBSERVED AND HELD AS UNDER: 19. AS ALREADY NOTED, THE FINAL ASSESSMENT ORDER O F THE AO STOOD VITIATED NOT ON ACCOUNT OF MERE IRREGULARITY BUT SI NCE IT WAS AN INCURABLE ILLEGALITY. SECTION 292B OF THE ACT WOULD NOT PROTECT SUCH AN ORDER. THIS HAS BEEN EXPLAINED BY THIS COURT IN ITS DECISION DATED 17 TH JULY 2015 PASSED IN ITA NO. 275/2015 (PR. COMMISSIONER OF INCOME TAX, DELHI-2, NEW DELHI V. C ITI FINANCIAL CONSUMER FINANCE INDIA PVT. LTD.) WHERE IT WAS HELD: SECTION 292B OF THE ACT CANNOT BE READ TO CONFER J URISDICTION ON THE AO WHERE NONE EXISTS. THE SAID SECTION ONLY PRO TECTS RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PRO CEEDINGS FROM ANY MISTAKE IN SUCH RETURN OF INCOME, ASSESSME NT NOTICES, SUMMONS OR OTHER PROCEEDINGS, PROVIDED THE SAME ARE IN SUBSTANCE AND IN EFFECT IN CONFORMITY WITH THE INTE NT OF PURPOSES OF THE ACT. THE COURT FURTHER OBSERVED THAT SECTION 292B OF THE ACT CANNOT SAVE AN ORDER NOT PASSED IN ACCORDANCE WITH THE PROVISIO NS OF THE ACT. AS THE COURT EXPLAINED, THE ISSUE INVOLVED IS NOT ABO UT A MISTAKE IN I.T.AS. NO.6288 & 6741/DEL/2013 22 THE SAID ORDER BUT THE POWER OF THE AO TO PASS THE ORDER. 15. THE SEQUITUR OF THE AFORESAID JUDGMENTS OF THE HON'BLE JURISDICTIONAL HIGH COURT, WHICH CAN BE CULLED OUT ARE AS UNDER:- FIRSTLY , ASSESSING OFFICER HAS TO FOLLOW THE MANDATORY PROCEDURE OF SECTION 144C (1), I.E., TO PASS A DRAF T ASSESSMENT ORDER AND IF SUCH A DRAFT ASSESSMENT ORD ER HAS NOT BEEN PASSED AND INSTEAD FINAL ASSESSMENT OR DER HAS BEEN PASSED, THEN SUCH A FINAL ASSESSMENT ORDER IS NULL AND VOID; SECONDLY , MERELY BY ISSUING A CORRIGENDUM, FINAL ASSESSMENT ORDER PASSED CANNOT BE CONVERTED INTO A DRAFT ASSESSMENT ORDER ESPECIALLY WHEN SUCH CORRIGENDUM HAS BEEN PASSED BEYOND THE PERIOD OF LIMITATION; AND LASTLY , IF THE DRAFT ASSESSMENT ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH THE PROCEDURE LAID DOWN I N SECTION 144C (1) AND INSTEAD FINAL ASSESSMENT ORDER HAS BEEN PASSED THOUGH WITHIN THE LIMITATION TIME, THEN SUCH AN ORDER CANNOT BE CURED AFTER THE LIMITATION HAS EXPIRED BY ANY SUBSEQUENT RECTIFICATION PROCEEDINGS OR CORRIGENDUM AND IN SUCH A SITUATION ALL THE SUBSEQU ENT PROCEEDINGS AND FINAL ASSESSMENT ORDER WILL GET INVALIDATED. IT IS A TRITE PROPOSITION THAT ERRORS WHICH CAN BE RECTIFIED EITHER U/S.154 OR SOME ERROR IN THE PRINTING WORK F OR WHICH A CORRIGENDUM HAS BEEN ISSUED, CANNOT BE RESORTED FOR CURING I.T.AS. NO.6288 & 6741/DEL/2013 23 THE DEFECT OF JURISDICTIONAL NATURE AND IF THERE IS AN ERROR OF JURISDICTION OR LIMITATION, THEN SAME CANNOT BE VALI DATED BY SUCH AN ORDER. RECTIFICATION ORDERS CAN ONLY BE EXE RCISED IN RESPECT OF AN ORDER WHICH IS VALID ON THE DATE OF P ROPOSED RECTIFICATION AND IF THE ORDER ITSELF WAS VOID AB INITIO FOR WANT OF FOLLOWING THE CORRECT PROCEDURE OF LAW THEN SUCH A RECTIFICATION CANNOT REVIVE ITS LEGALITY. 16. ACCORDINGLY, WE HOLD THAT THE PROPOSED CORRI GENDUM ISSUED BY THE ASSESSING OFFICER SO AS TO CURE THE D EFECT OF THE ORIGINAL FINAL ASSESSMENT ORDER IS BAD IN LAW AND S AME COULD NOT HAVE BEEN DONE AND CONSEQUENTLY ENTIRE SUBSEQUE NT PROCEEDINGS AND FINAL ASSESSMENT ORDER DATED 30.10. 2013 IS HELD TO BE INVALID BEING BARRED BY LIMITATION AND I S HEREBY QUASHED. 17. IN VIEW OF THE AFORESAID FINDINGS, THE ASSESSEE S APPEAL IS TREATED AS ALLOWED WHEREAS THE REVENUES APPEAL IS TREATED AS DISMISSED. SINCE IMPUGNED ASSESSMENT ORDER ITSELF H AS BEEN HELD INVALID, ALL THE GROUNDS RAISED ON MERITS BECO ME PURELY ACADEMIC AND SAME IS TREATED AS INFRUCTUOUS. 18. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH APRIL, 2018. SD/- SD/- [R.K. PANDA] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 TH APRIL, 2018 I.T.AS. NO.6288 & 6741/DEL/2013 24 PKK: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR