Big Relief
HC junks tax assessment orders against Microsoft, JCB India, others
This story was originally published at 20:37 IST on 2 September 2024
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NEW DELHI – In relief to various companies, including Microsoft India (R&D) Pvt Ltd and JCB India Ltd, the Delhi High Court today quashed the tax assessing officer's final assessment orders against them. The petitioners had said the final assessment orders were passed against them without draft assessment orders, as mandated under Section 144C of the Income Tax Act, 1961.
"We, on an independent analysis, find ourselves equally unable to view or accept Section 144C when mandating a draft assessment order being framed as being a mere procedural requirement," the court said. The draft assessment order creates a right to challenge a decision at multiple levels, be it before the Dispute Resolution Panel, Commissioner of Income TaxI (Appeals) or the Income Tax Appellate Tribunal, it said.
"A failure to frame a draft order of assessment not only curtails the right of the assessee to adopt corrective measures, it also deprives it of a salutary right to challenge the draft in terms of the statutory mechanism laid in place," said a Bench of Justice Yahwant Varma and Justice Ravinder Dudeja.
In Microsoft's case, the transfer pricing officer had passed an order computing total upward adjustment of its income at 1.06 bln rupees for assessment year 2008-09. Thereafter, the assessing officer proceeded to frame a final assessment order against Microsoft without passing a draft assessment order.
Similarly, in JCB India's case, it had filed the return of income for assessment year 2020 declaring a total income of 13.95 bln rupees. In 2021, the transfer pricing officer proposed an upward transfer pricing adjustment of 59.35 mln rupees. Thereafter, the assessing officer directly passed the final assessment order without any draft assessment order. End
Reported by Surya Tripathi
Edited by Avishek Dutta
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