Madras High Court
The Ramco Cements Limited vs The Income Tax Officer on 7 December, 2023
Author: Krishnan Ramasamy
Bench: Krishnan Ramasamy
WP No.33756 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 07.12.2023
CORAM:
THE HON'BLE MR. JUSTICE KRISHNAN RAMASAMY
W.P No.33756 of 2023
and WMP Nos.33594 & 33595 of 2023
The Ramco Cements Limited
Represented by its authorised signatory
Mr.T.Mathivanan
Ramandiram, Rajapalayam,
Also at No.98A, Dr.Radhakrishnan Salai,
Mylapore, Chennai – 600 004. ... Petitioner
vs.
The Income Tax Officer,
National Faceless Assessment Centre,
Assessment Unit, Income Tax Department,
Ministry of Finance,
Room No.401, 2nd Floor, E-Ramp,
Jawaharlal Nehru Stadium
New Delhi – 110 003. ... Respondent
Prayer : Writ Petition filed under Article 226 of the Constitution of
India, to issue a Writ of certiorari calling for the records of the
respondent related to the impugned assessment order dated 13.11.2023
passed by the respondent in ITBA/AST/S/143(3)/2023-
24/1057907749(1) for Assessment Year 2021-2022 and quash the same.
https://www.mhc.tn.gov.in/judis
1/11
WP No.33756 of 2023
For Petitioner : Mr.P.J.Rishikesh
For Respondent : Dr.B.Ramaswamy,
Senior Standing Counsel
ORDER
This writ petition has been filed to call for the records of the
respondent related to the impugned assessment order dated 13.11.2023
passed by the respondent in ITBA/AST/S/143(3)/2023-
24/1057907749(1) for Assessment Year 2021-2022 and quash the same.
2. The case of the petitioner is that the petitioner filed return of
income on 09.03.2022 and thereafter filed revised returns on 31.03.2022.
As there was variation in the returns filed to the tune of
Rs.43,42,55,948/-, the Assessing Officer had referred to the Transfer
Pricing Officer (TPO) to give their comments on the proposed variation
pertaining to the price variation issue and the TPO had filed his report.
Once the TPO report is filed, the respondent is supposed to have passed a
draft assessment order under Section 144(C) of the GST Act. However,
without passing the draft assessment order, the respondent had directly
passed the final assessment order. Hence, this writ petition.
https://www.mhc.tn.gov.in/judis
3. Mr.P.J.Rishikesh, learned counsel appearing for the
petitioner would submit that, in the present case, as there was a variation
in the returns filed by the petitioner to the tune of Rs.43,42,55,948/-, in
terms of Section 92 C (3), the Assessing Officer had referred the subject
matter to the Transfer Pricing Officer (TPO). On 13.10.2023, the
Transfer Pricing Officer passed an order in terms of Section 92 (C) (A)
(3) of the GST Act. The said order was intimated to the Assessing
Officer on 19.10.2023. Thereafter, the respondent had issued a show
cause notice on 19.10.2023. The petitioner had filed their reply on
24.10.2023 requesting the respondent to pass a draft assessment order in
terms of Section 144 (C) of the GST Act. However, without following
the mandatory procedure of passing a draft assessment order, under
Section 144 (C), the respondent passed a final assessment order on
13.11.2023. Hence, the learned counsel would contend that the
impugned assessment order passed by the respondent is liable to be set
aside.
4. The learned counsel also referred to the following judgments
in support of his contention -
https://www.mhc.tn.gov.in/judis
1. 2017 SCC Online Del 8441 [Turner International India Pvt. Ltd.
vs. Deputy Commissioner of Income Tax Circle]
2. 2018 SCC Online Mad 13752 [Asst. Commissioner of Income
Tax v. Vijay Television Pvt. Ltd.]
3. Order dated 22.12.2021 in W.P.No.1802 of 2021 (Bombay High
Court) [Shell India Market Pvt. Ltd. v. Additional / Assistant
Commissioner of Income Tax].
5. By referring to the above judgments, the learned counsel for
the petitioner submitted that since the mandatory procedure of passing a
draft assessment order under Section 144 (C) has not been followed, the
entire assessment gets abated.
6. Per contra, Dr.B.Ramaswamy, learned Senior Standing
Counsel appearing for the respondent contended that in the present case,
the draft assessment in terms of Section 144 (C) was made by the
respondent and he referred to a portion of the said draft assessment order
which reads as follows -
https://www.mhc.tn.gov.in/judis
“Accordingly, the assessment is being assessed
u/s.143(3)/144C(1) of the Income Tax Act, 1961 at
Rs.746,96,00,420/-. Issue demand notice under Section 156 of the
I.T. Act. Charge interest as per I.T. Act. Allow credit of prepaid
taxes. Initiate penalty proceedings under Section 270A of the I.T.
Act for under reporting of Income separately.”
7. By referring to the above paragraph, the learned Senior
Standing Counsel for the respondent would contend that the present
impugned order is a draft assessment order passed under Section 144 C
(1) of the Income Tax Act. He further referred to the previous orders
passed by the Assessing Officer in similar circumstances on 27.09.2023
wherein in also, the Assessing Officer has passed the following order
which is extracted hereunder -
“Accordingly, the assessment is being assessed
u/s.143(3)/144C(1) of the Income Tax Act, 1961 at
Rs.383,84,32,270/-. Issue demand notice under Section 156 of the
I.T. Act. Charge interest as per I.T. Act. Allow credit of prepaid
taxes. Penalty proceedings initiate separately u/s 270A for under
reporting of Income.”
8. By referring to the above said paragraph and comparing the
https://www.mhc.tn.gov.in/judis
similar paragraph with the impugned order passed by the respondent in
the present case, the learned Senior Standing Counsel would contend that
against the draft order passed on 27.09.2023, the petitioner has
approached the Transfer Pricing Officer by considering the order passed
under Section 144 C (1) as draft assessment. However, in the present
case, though the draft assessment order has been passed in terms of
Section 144C(1) of I.T Act, the petitioner has considered the same as
final assessment order since in the first page, the word “Draft
Assessment Order u/s 144C(1) of the Income Tax Act” has not been
mentioned. Further, he would mainly contend that in the present case, it
is only a draft assessment order passed in terms of Section 144C(1) of the
Income Tax Act and therefore, he prayed for dismissal of the writ
petition.
9. I have given due consideration to the submissions made by
the learned counsel for the petitioner as well as the learned Senior
Standing Counsel appearing for the respondent and perused the materials
on record.
10. In the present case, on 09.03.2022, the petitioner filed
https://www.mhc.tn.gov.in/judis
Income Tax Returns (ITR). Again on 31.03.2022, he filed revised ITR.
The respondent issued intimation and notice under Section 143 (2) of the
Income Tax Act, 1961 on 28.06.2022. Notice under Section 142(1) of
I.T. Act was issued on 16.08.2023. The petitioner submitted their
response on 26.08.2023. Thereafter, on 27.09.2023, the respondent
passed an order referring the matter to Transfer Pricing Officer (TPO) in
terms of Section 92CA of Income Tax Act. The TPO passed an order on
13.10.2023 in terms of Section 92CA(3) of Income Tax Act. On
19.10.2023, Show Cause Notice u/s 143(3) of Income Tax Act was
issued against the petitioner. The petitioner submitted their response on
24.10.2023 and on 13.11.2023, the impugned order u/s 143(3)(1) of the
Income Tax Act was passed.
11. Now the issue for consideration is, whether the said
impugned order passed is a draft assessment order or not?.
12. According to the respondent, they have categorically
mentioned at the end of the assessment order that this assessment order is
passed under Section 144 (C) (1) of the Income Tax Act. Therefore, the
said assessment order is only a draft assessment order against which the
https://www.mhc.tn.gov.in/judis
petitioner can very well file an appeal before the Dispute Resolution
Panel (DRP). However, the petitioner would submit that though
provisions under Section 144 (C)(1) of the Income Tax Act has been
mentioned in the order, in the first page of the said impugned order, they
have not mentioned anything about the order passed under Section
144(C) (1) of the Act. Therefore, it should be construed only as a final
assessment order . However, this Court is not in a position to accept the
contention of the petitioner for the reason that the respondent has
convinced this Court that the present order is only a draft assessment
order. Though the word “draft assessment” is missing, the provision
under Section 144 (C) of the Income Tax Act is very much available and
any order whatsoever in the form, in the event of the provisions by
referring Section 144 (C) (1) of the Act, it should be construed only as a
draft assessment order. No deficiency or discrepancy could be found in
the order for not mentioning the word “draft assessment order” and by
virtue of which, it would not get abated.
13. In view of the above, this Court is of the considered view
that the impugned Assessment Order should be considered as a draft
https://www.mhc.tn.gov.in/judis
assessment order and the petitioner, if so aggrieved, can very well file an
appeal before the Dispute Resolution Panel (DRP) under the provision of
144 (C) of the Income Tax Act. Though the petitioner has referred
various case laws, but those case laws are pertaining to final assessment
order passed without any draft assessment order in which case the
assessment has to be abated. In the present case, this Court arrives at a
conclusion that the impugned assessment order passed by the respondent
is only a draft assessment order in which case, the petitioner has to
approach the appropriate forum and address their grievance in terms of
Section 144 (C) of the Income Tax Act. At this juncture, the learned
counsel appearing for the petitioner would submit that a time frame may
be fixed by this Court for approaching the Dispute Resolution Panel.
14. Considering the submission made by the learned counsel
for the petitioner, this Court is inclined to grant time to the petitioner to
file appeal before the Dispute Resolution Panel against the impugned
assessment order, within a period of thirty (30) days from the date of
receipt of a copy of this order, in terms of Section 144 (C) of the Income
Tax Act. Since this Court considered the impugned assessment order
https://www.mhc.tn.gov.in/judis
passed by the respondent as draft assessment order, no demand can be
raised and accordingly the said demand notice alone needs to be set aside
and it is accordingly set aside. Needless to add that the Dispute
Resolution Panel is entitled to raise fresh demand notice.
15. With the above directions, this Writ Petition is disposed of.
No costs. Consequently, connected Miscellaneous Petitions are closed.
07.12.2023
Index: Yes/No
Speaking/Non-Speaking Order
Neutral Citation: Yes/No.
rgr
To
The Income Tax Officer,
National Faceless Assessment Centre,
Assessment Unit, Income Tax Department,
Ministry of Finance,
Room No.401, 2nd Floor, E-Ramp,
Jawaharlal Nehru Stadium
New Delhi – 110 003.
https://www.mhc.tn.gov.in/judis
KRISHNAN RAMASAMY, J.
rgr
07.12.2023
https://www.mhc.tn.gov.in/judis
