Marvell India Private Limited V. National Faceless Assessment Centre Delhi and Deputy Commissioner of Income Tax Circle 4(1)(1), Bangalore

WP/19932/2021

AI Insights

Marvell India Private Limited filed a writ petition challenging the final assessment order and demand notice issued by the National Faceless Assessment Centre and the Deputy Commissioner of Income Tax, Bangalore. The petitioner argued that the assessment order was passed without following the mandatory procedure prescribed under Section 144C of the Income Tax Act, 1961, as the objections to the draft assessment order were submitted to the Dispute Resolution Panel (DRP) within the prescribed period. The respondents contended that the petition lacked merit. The court found that the assessment order was passed without awaiting directions from the DRP, which was arbitrary and without jurisdiction, leading to the quashing of the assessment order and demand notice.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 805832 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 09-12-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: MUKESH BUTANI; SHREYASH SHAH; AKSHARA RAO
• Keywords: Assessment Order; Dispute Resolution Panel; Faceless assessment; Income Tax; Writ petition
• Section: 143(3); 274; 144C; 270A; 144B; 156

Judgement Text

"IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF DECEMBER, 2021 BEFORE THE HON’BLE MR.JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.19932 OF 2021 (T–IT) BETWEEN: MARVELL INDIA PRIVATE LIMITED 10TH AND 11TH FLOOR, TOWER D AND E, GLOBAL TECHNOLOGY PARK MARATHAHALLI-SARJAPUR OUTER RING ROAD, BANGALORE-560103 KARNATAKA. (REPRESENTED BY MR.THAKER PRADIPKUMAR ARUNBHAI) ... PETITIONER (BY SRI.MUKESH BUTANI & SRI SHREYASH SHAH AND MS.AKSHARA RAO, ADVOCATES) AND: 1. NATIONAL FACELESSS ASSESSMENT CENTRE DELHI THROUGH PR. CHIEF COMMISSIONER OF INCOME TAX/DEPUTY COMMISSIONER OF INCOME TAX 2ND FLOOR, JAWAHARLAL NEHRU STADIUM NEW DELHI 110003. EMAIL [e-mail]/ [e-mail] 2. DEPUTY COMMMISSIONER OF INCOME TAX CIRCLE 4(1)(1), BANGALORE EMAIL: [e-mail]. ... RESPONDENTS (BY SRI E I SANMATHI, ADVOCATE) ----- 2 THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE ASSESSMENT ORDER DTD.30.9.2021 (ANENXURE-A) PASSED BY THE R-1 UNDER SECTION 143(3) READ WITH SECTION 144C AND SECTION 144B FOR ASSESSMENT YEAR 2018-19 AND RESTORING THE PROCEEDINGS AT THE LEVEL OF DISPUTE RESOLUTION PANEL(DRP) AS WELL AS SETTING ASIDE THE ACCOMPANYING NOTICE OF DEMAND ANENXURE- B ISSUED UNDER SECTION 156 AND NOTICE FOR INITIATING PENALTY PROCEEDINGS UNDER SECTION 274 READ WITH SECTION 270A OF THE ACT AND ETC. THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING THROUGH VIDEO CONFERENCE : O R D E R In this petition, the petitioner seeks quashing of impugned final assessment order at Annexure-A dated 30.09.2021 and demand notice at Annexure-B dated 30.09.2021 and for other reliefs. 2. Heard learned counsel for petitioner and learned counsel for respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the petition and referring to the documents produced by the petitioner, learned counsel for the petitioner invites my attention to the mandatory provisions of Section 144C of the Income Tax Act, 1961 (for short 'the I.T. Act') in order to 3 point out that the statutory scheme underlying the said provision clearly indicates that under sub-section (2), after the draft assessment order dated 27.08.2021 was issued to the petitioner, the petitioner had two options viz., either to file his acceptance as provided under sub-section (2)(a) or to file objections as per sub-section (2)(b) of the I.T. Act. 4. It is contention of the petitioner that the petitioner submitted his objections on 24.09.2021 to the Dispute Resolution Panel (DRP) within the prescribed period; in view of change in the mechanism of assessment being shifted to the faceless scheme coupled with the Covid-19 pandemic exigency, the petitioner could not intimate the Assessing Officer about filing of the objections before the DRP; however, petitioner intimated the same to the Assessing Officer on 04.10.2021. It is the grievance of the petitioner that the despite the petitioner submitting his objections to the draft assessment order before the DRP as well as intimating the same to the Assessing Officer, the Assessing Officer proceeded to pass the impugned assessment order without following the mandatory procedure prescribed in sub-sections (5) to (13) of Section 144C and without awaiting directions 4 from the DRP as provided in the said provisions. It is also contended that by virtue of Government Notifications, circulars etc., as well as the orders passed by the Apex Court extending the period of limitation, the inability and omission, if any, on the part of the petitioner to file objections with the Assessing Officer ought to be condoned and a lenient view is to be taken and indulgence in this regard is to be shown in favour of the petitioner, particularly when the petitioners had filed their objections before the DRP on 24.09.2021 within the prescribed period. It is therefore contended that the impugned assessment order is violative of the aforesaid mandatory provisions of Section 144C, particularly, since the petitioner had filed his objections to the draft assessment order before the DRP within the prescribed period and intimated the same to the Assessing Officer and consequently, the impugned Assessment Order and consequential notice deserve to be quashed and the DRP be directed to conclude the proceedings after considering the objections of the petitioner pursuant to which the Assessing Officer is to be directed to pass appropriate orders as provided under Section 144C of the IT Act. 5 5. Per contra, learned counsel for the respondents submits that there is no merit in the petition and the same is liable to be dismissed. 6. As rightly contended by the learned counsel for the petitioner, the undisputed material on record clearly indicates that in response to the draft Assessment Order dated 27.08.2021 issued to the petitioner, petitioner submitted objections before the DRP on 24.09.2021, within the prescribed period and intimated the same to the Assessing Officer on 04.10.2021; the explanation offered by the petitioner as regards his inability and omission to file objections with the Assessing Officer also in addition to the DRP merits acceptance, particularly in view of the Government Orders, circulars etc. as well as the orders of the Apex Courts extending the period of limitation. At any rate, the petitioner had chosen to exercise the option of filing objections to the draft Assessment Order warranting the DRP to proceed further before the Assessing Officer takes further steps as provided under sub-sections 5 to 13 to Section 144C. Under these circumstances, I am of the considered opinion that the impugned Assessment Order passed by respondent 6 No.1- Assessing Officer without awaiting directions from the DRP, before whom the matter was pending pursuant to the petitioner filing his objections within the prescribed period is clearly arbitrary, illegal and without jurisdiction or authority of law and the same deserves to be quashed and necessary directions are to be issued to the DRP as well as the Assessing Officer in this regard. 7. In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) The impugned assessment order at Annexure- A bearing No.ITBA/AST/S/143(3)/2021- 22/1036050587(1) dated 30.09.2021 and the demand notice bearing No.ITBA/AST/S/156/ 2021-22/1036050617(1) dated at Annexure-B dated 30.09.2021 are hereby quashed. (iii) The Dispute Resolution Panel (DRP) is directed to conclude the proceedings by considering the objections filed by the petitioner, in accordance with law and Section 144C of the Income Tax Act, 1961. 7 (iv) Upon the DRP concluding the proceedings as provided under Section 144C referred to supra, respondent No.1 – Assessing Officer shall proceed further and pass appropriate orders in accordance with law. SD/- JUDGE Nms/Bmc "