null V. Mr. H.M. Bhatia, Advocate

WPMS/2098/2011

AI Insights

The case involves a challenge by the petitioner against the decision of the Dispute Resolution Panel (DRP) concerning a provisional assessment under the Income Tax Act. The petitioner sought to quash the DRP's order and requested that the final assessment be made in accordance with the law and applicable decisions. The court had initially stayed the DRP report but later allowed the Assessing Officer to proceed with the assessment, emphasizing the need for a fair hearing and an independent decision-making process.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 693666 (HC-UTTARAKHAND)
• Appeal Type: Others
• Pronouncement Date: 31-05-2019
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Assessee Lawyers: NIRAJ SETHI; CHETAN JOSHI
• Keywords: Assessment; Dispute Resolution Panel; Final Assessment Order; Income Tax
• Section: 148; 153; 144C(13); 144C(1); 153B

Judgement Text

"WPMS No. 2098 of 2011 With WPMS No. 2096 of 2011 With WPMS No. 2097 of 2011 Hon’ble Sharad Kumar Sharma, J. Mr. Niraj D. Sethi, Advocate along with Mr. Chetan Joshi, Advocate for the petitioner. Mr. H.M. Bhatia, Advocate for respondent nos. 2 to 5. The provisions of sub-section (1) & (13) of Section 144C of the Income Tax Act reads as under: “144C. Reference to Dispute Resolution Panel. (1) The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee 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. (13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained [in section 153 or section 153B], the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received.” The language used under sub-section (13) of Section 144C with which we are concerned at the moment, it would provide that after the passing of the directions under sub- section (13) of Section 5 the Assessing Officer will undertake the assessment exercise and would thereafter render an order of final assessment only in conformity with the directions issued by the DRP, i.e. Dispute Resolution Panel. It also contains the non- obstinate clause to the effect that anything to the contrary contained under Section 153 & 153 B, the Assessing Officer thereafter the report of DRP dated 06.09.2011 without providing any further opportunity of hearing to the assessee may take a decision within a period of one month thereafter the report of DRP dated 06.09.2011. In the case at hand the petitioner in the writ petition had challenged the decision of the DRP as against the provisional assessment, and he has formulated the relief in the writ petition to the following effect: “(a) Issue appropriate writ, order or direction to quash the impugned order dated 06.09.2011 passed by the respondent no. 2. (b) direct the respondent no. 3 and 4 to pass the final assessment order in accordance with law and after following the applicable decisions in the case of the petitioner. (c) to grant costs of this Petition. (d) dispense with the service of advance notice to the respondents. (e) dispense with the filing of typed and certified copies of Annexures, and (f) pass such other order or orders as deemed fit and proper in the facts and circumstances of the case.” Initially, this Court has passed an interim order on 30.09.2011 and for the reason given therein, the order was from the view point that on the issuance of notice under Section 148 of the Income Tax Act was a change of opinion pertaining to the aspects effecting the assessment. Consequently, the Court had stayed the DRP report dated 06.09.2011, this interim order continued to operate, but later on it could not be extended. Consequently, the effect of non-extension of the interim order which would follow is that the Assessing Officer has to undertake the further process contemplated under sub-section (13) of Section 144C of the Income Tax Act. The apprehension, which has been expressed by the learned counsel for the petitioner, is to the effect that in view of the language used under sub-section (13) of Section 144 C, where it contemplates that the Assessing Officer would render an order in, ‘conformity’, with the directions issued by the DRP that would be absolutely a farce exercise as it would be a pre-determination of the assessment even without letting an opportunity of hearing to the petitioner, who was likely to be harness with tax liability as consequence of assessment made under Section 144C(13), to be availed by the petitioner to place his case before the Assessing Officer, which obviously will have a civil consequence. Having considered the arguments of the counsels for the parties and the circumstances, which prevails in the instant case, these writ petitions are disposed of and in the peculiar circumstances which prevails and as argued by the learned counsel for the petitioner raising his grievance against the orders of the DRP to the affect that the Assessing Officer would be considering the matter with the pre-determined and based on the report of DRP, considering the rival arguments of the counsels, it is hereby directed that all interim applications filed by the petitioner, which have been preferred by the petitioner during the pendency of the writ petition, would stand rejected. However, it is open to the Assessing Officer to proceed in accordance of sub-section (13) of Section 144 C for assessing the tax payable. However, it is clarified that at the time when the Assessing Officer proceeds to make the assessment he would provide an absolute complete and effective opportunity of hearing to the petitioner and the decision would be taken by the Assessing Officer independently without being influenced by the decision of the DRP. Having said so, it is only an isolated case where this exception is being carved out by this Court, in a peculiar circumstances of the case and it will not act as an precedent in future in any other case. The Assessing Officer would initiate the process of assessment and complete the same within 30 days from the date of production of the certified copy of this order. Subject to above observations, writ petitions are disposed of. However, there would be no order as to cost. (Sharad Kumar Sharma, J.) 31.05.2019 Pooja "