The Assessing Officer must await directions from the Dispute Resolution Panel before finalizing assessments after taxpayer objections, as mandated by the Income Tax Act, ensuring compliance with statutory procedures.

ORDER :

S.R.KRISHNA KUMAR, J.

In this petition, petitioner seeks for the following reliefs:-

“1. Issue a writ of Certiorari, or any other order or direction of like nature, calling for records on the file of the First Respondent comprised in the impugned order bearing DIN: ITBA/AST/S/143(3)/2023- 24/1060582725(1) dated 06.02.2024 under section 143(3) r.w.s. 144C(3) read with section 144B of the Income Tax Act, 1961, for the AY 2021-22 [attached as Annexure-A], quash the same and pass such further or other orders as may be deemed fit and proper in the circumstances of this case, and render justice.”

2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.

3. A perusal of the material on record will indicate that pursuant to the Income Tax returns filed by the petitioner, the case of the petitioner was selected for scrutiny and referred to the Transfer Pricing Officer, who made a transfer pricing adjustment of Rs.8,59,57,142/- vide order dated 17.10.2023. In pursuance of the same, respondent No.2 passed draft Assessment Order dated 04.12.2023, to which the petitioner filed its objection dated 03.01.2024 before the Dispute Resolution Panel (DRP). Inspite of the petitioner filing objections before the DRP and communicating the same to the Assessing Officer, who proceeded further and passed final Assessment Order without awaiting directions from the DRP and as such, the petitioner is before this Court by way of the present petition.

4. Under identical circumstances, in the case of INFRRD Private Limited Vs. Assessment Unit and others - W.P.No.11367/2025 dated 16.04.2025, this Court held as under:

“In this petition, petitioner seeks the following reliefs:

"The Petitioner, therefore, prays that this Hon'ble Court be pleased to issue a writ, order, or direction:

(a) quashing the order dated 20.03.2025 (Annexure -'D') bearing DIN ITBA/AST/S/143(3)/2024-25/1074765838(1) issued by the 1st Respondent for the assessment year 2022-23;

(b) quashing the notice dated 20.03.2025 (Annexure -'E') bearing DIN ITBA/AST/S/156/2024-25/1074765947(1) issued by the 1st Respondent for the assessment year 2022-23;

(c) quashing the notice dated 20.03.2025 (Annexure -'F') bearing DIN ITBA/PNL/S/270A/2024-25/1074766070(1) issued by the 1st Respondent for the assessment year 2022-23;

(d) pass such other or further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity."

2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record

3. In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner submits that in relation to assessment year 2022-2023, returns of the income filed by the petitioner was selected for scrutiny assessment and in the course of proceedings, Transfer Pricing Officer (TPO) passed an order under Section 92CA(3) of the Income Tax Act (for short 'IT Act'), determining a transfer pricing adjustment. It is contended that under Section 144C of the IT Act, in a case where variation is proposed to the income as a consequence of the order of TPO, the person is treated as an 'eligible assessee' in the first instance and a draft assessment order under Section 144C is required to be passed, against which, the 'eligible assessee' has the option to file objections to the same before the Dispute Resolution Professional (DRP) within 30 days from the date of receipt of the order and if the same is done, the Assessing Officer is required to finalise the assessment in line with the directions of DRP. It is further contended that the petitioner is 'eligible assessee' and the draft assessment order having been passed by respondent No.1, the petitioner filed his objections before the DRP, but filing of objections could not be intimated to respondent No.1 on account of technical glitches