Draft Assessment Order Under Section 144c -Zuari Cement

Draft Assessment Order Under Section 144c -Zuari Cement


Assessment Order Under Section 144c

u/s 144 C of the Act refers to the Dispute Resolution Panel.

  • Section 144C(1) provides that in case of an eligible assessee, the Assessing Officer shall forward a draft of the proposed order of assessment to the assessee if he proposes to make any variation in the income or loss returned which is prejudicial to the interest of the assessee;
  • Section 144C(2) provides that the assessee shall, within thirty days of the receipt of the draft assessment order, file-
  • his acceptance of the variations to the Assessing Officer; or
  • his objection, if any, to such variation with-
  • the Dispute Resolution Panel; and
  • the Assessing Officer;
  • Section 144C(5) provides that the Dispute Resolution Panel  shall issue such directions to the Assessing Officer as it thinks fit for his guidance to enable him to complete the assessment in case the assessee raised an objection;
  • Section 144C(7) provides that the Dispute Resolution Panel, before issuing directions,  may make further inquiries as it thinks fit or cause any further inquiry to be make by any income tax authority and report the result of the same to it.
  • S 144C(8) recognizes wide powers of the Dispute Resolution Panel to confirm, reduce or enhance the variations provided in the draft order subject to the limitation that it shall not set aside any proposed variation or issue any direction for further inquiry;
  • S 144 C(10) provides that every direction issued by the Dispute Resolution Panel would be binding on the Assessing Officer;
  • Section 144C(13) provides that upon receipt of the directions issued by the Dispute Resolution Panel. The Assessing Officer shall in conformity with the directions complete . The assessment without providing any further opportunity of being heard to the assessee.
In ‘Zuari Cement Limited V.  Assistant Commissioner of Income Tax’ – WP(C) No. 5537/2012, DB of AP High Court, the High Court held that the failure to pass a draft assessment order under section 143(1) of the Act would result in rendering the final assessment order ‘without jurisdiction’ null and void and unenforceable’.  In this case the consequent demand notice is also set aside.

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