Delhi High Court
Pepsico India Holdings Private Limited vs Assessment Unit Income Tax Department ... on 1 December, 2023
$~S-45
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 15322/2023 & CM APPL.61469/2023
PEPSICO INDIA HOLDINGS PRIVATE LIMITED ..... Petitioner
Through: Mr.Deepak Chopra, Advocate with
Mr.Anmol Anand and Ms.Priya
Tandon, Advocates.
versus
ASSESSMENT UNIT INCOME TAX DEPARTMENT NATIONAL
FACELESS ASSESSMENT CENTRE & ORS. ..... Respondents
Through: Mr.Aseem Chawla, Sr.Standing
Counsel with Ms.Pratishtha
Chaudhary, Ms.Nivedita and
Mr.Aditya Gupta, Advocates.
% Date of Decision : 01st December, 2023
CORAM:
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MS. JUSTICE MINI PUSHKARNA
JUDGMENT
MANMOHAN, ACJ : (ORAL)
1. Present writ petition has been filed challenging the order dated
21st November, 2023 passed by the Respondent No.1 under Section 143(3)
read with Section 144C(4) of the Income Tax Act, 1961 [hereinafter referred
to as 'the Act'] for Assessment Year 2020-21 as well as the computation
sheet and demand notice issued under Section 156 of the Act. Petitioner also
challenges the notice dated 21st November, 2023 issued under Section 274
read with Section 270A of the Act initiating penalty proceedings against the
Petitioner. Petitioner also seeks directions to the Respondent No.3-Dispute
Resolution Panel ('DRP'), to decide the objections dated 20th October, 2023
in accordance with law.
2. Learned counsel for the Petitioner states that though the Petitioner had
preferred its objections against the draft assessment order dated
26th September, 2023 before the Respondent No.3-DRP within limitation as
provided under Section 144C(2)(b)(i) read with Section 144B(1)(xxiv)(b)(I)
of the Act, yet the Petitioner inadvertently failed to intimate the Respondent
No.1-Assessing Officer regarding the objections in terms of Section
144C(2)(b)(ii) of the Act. He states that due to the inadvertent lapse on
behalf of the Petitioner, Respondent No.1- Assessing Officer passed the
impugned final assessment order dated 21st November, 2023, thereby
closing the assessment for the year under consideration.
3. Learned counsel for the Petitioner states that since the Petitioner had
exercised its statutory remedy of filing its objections before the Respondent
No.3-DRP, the impugned final assessment order should not have been
passed by the Respondent No. 1- Assessing Officer before the Respondent
No. 3-DRP issued its directions for framing of the assessment.
4. In support of his submission, he relies on the judgment dated
19th July, 2023 passed by the High Court of Karnataka in Open Silicon
Research Private limited v. The Assessment Unit [W.P. No. 14541 of 2023]
and the Bombay High Court in Sulzer Pumps India Private Limited v. Dy.
Commissioner of Income Tax [W.P.(L) No. 15811/2021] wherein under
identical facts, the Court had set aside the final assessment order and
consequent notices. He also relies on the decision of this Court in SRF Ltd.
vs. NFAC, [2021] 281 Taxman 574 (Delhi High Court), Anand Nvh
Products (P.) Ltd. vs. NFAC, [2021] 282 Taxman 485 (Delhi High Court)
and Fiberhome India (P.) Ltd. Vs. National E-Assessment Centre,
Additional/Joint/Deputy Assistant Commissioner of Income-tax/Income-
tax Officer, (2022) 132 taxmann.com 118 (Delhi) wherein this Court set
aside the final assessment order and the consequent notices/ computations
that were passed without waiting for the directions issued by the DRP as per
the mandate of Section 144C of the Act.
5. Issue Notice. Mr.Aseem Chawla, Senior Standing Counsel, accepts
notice on behalf of the Respondents.
6. He submits that under Section 144C(2)(b)(ii), the Petitioner on receipt
of the draft assessment order was statutorily required to file its objections
before the Assessing Officer in addition to the DRP. He further submits that
under Section 144C(3)(b) the Assessing Officer was obligated to complete
the assessment on the basis of the draft assessment order if no objections
were received within the time period specified under Section 144C(2) i.e.
within thirty days of the receipt of the draft order. He states that the
Assessing Officer was well within his right to pass the impugned assessment
order dated 21st November, 2023 and he cannot be faulted for finalising the
assessment in accordance with the prescribed procedure.
7. Having heard learned counsel for the parties, this Court is of the view
that the issue at hand is no longer res integra as it has been decided by the
Bombay High Court in Sulzer Pumps (supra) wherein it has been held as
under:-
"6. In our view since petitioner had already filed a reference raising
his objections to the DRP and Section 144C (4) of the Act requires the
Assessing Officer to pass the final order including the view expressed
by the DRP, we will be justified in setting aside the order of the
Assessing Officer dated 28th June, 2021 which is impugned in this
petition. We would also observe that the Assessing Officer cannot be
faulted for passing the impugned order. At the same time, the
Assessing Officer will also have benefit of considering the views of
DRP while passing a fresh Assessment Order."
8. This Court is in agreement with the view expressed by the Bombay
High Court in the aforesaid decision. Once the objections have been filed by
the assessee against a draft assessment order within the time limit prescribed
under Section 144C(2)(b), the rest of the procedure should be followed as
prescribed and the final assessment order ought to be passed by the
Assessing Officer in accordance with the directions issued by the DRP.
9. This Court is further of the view that no prejudice will be caused to
the Respondent-Department if the present petition is allowed and the
impugned assessment order is set aside as Respondent-Department would be
well within its rights to pass a fresh assessment order post the receipt of
direction from the Respondent No. 3-DRP.
10. Accordingly the impugned assessment order dated 21st November,
2023, the computation sheet as well as all the subsequent notices are set
aside and the writ petition is allowed.
ACTING CHIEF JUSTICE
MINI PUSHKARNA, J
DECEMBER 1, 2023/TS
