The Court exercised its discretion in setting aside the assessment order due to the Petitioner’s procedural lapse, emphasizing that such indulgence would not set a precedent for future cases without comparable factual circumstances. (Paras: 3, 6, 7, 10, 12, 13)

The Court set aside the impugned assessment order and remitted the matter to the DRP for reconsideration, provided the Petitioner paid costs of Rs. 10,000 to the High Court Employees Medical Welfare Fund within two weeks of the order’s upload date.

Acts and Sections Discussed:

1. Income Tax Act, 1961 – Section 143(3) – Final Assessment Order

2. Income Tax Act, 1961 – Section 144C(3) – Draft Assessment Order

3. Income Tax Act, 1961 – Section 143(2) – Scrutiny Assessment

4. Income Tax Act, 1961 – Section 156 – Notice of Demand

5. Income Tax Act, 1961 – Section 270A – Penalty for Under-Reporting of Income

6. Income Tax Act, 1961 – Section 274 – Procedure for Imposing Penalties

Subjects:
Income Tax – Dispute Resolution Panel – Assessment Order – Scrutiny Assessment – Costs Imposed – Remission of Matter – Procedural Lapse

Nature of Litigation:
Writ Petition seeking the setting aside of the final assessment order and remission of the matter to the Dispute Resolution Panel (DRP) for reconsideration.

Petitioner’s Relief Sought:
The Petitioner requested the setting aside of the final assessment order dated 28 May 2024 and the consequential notices of demand, seeking remission to the DRP for reconsideration in accordance with the law.

Reason for Filing the Case:
The Petitioner’s objections to the draft order were not communicated to the Assessing Officer, leading to the issuance of the impugned final assessment order without considering the pending objections before the DRP.

Previous Decisions:
The draft assessment order under Section 144C(1) was passed on 29 March 2024, and the Petitioner filed objections on 24 April 2024. The final assessment order was issued on 28 May 2024 without acknowledging the pending objections.

Issues:
Whether the final assessment order issued without considering the pending objections before the DRP should be set aside and the matter remitted.

Submissions/Arguments:
(a) Petitioner’s Counsel: Admitted the lapse in communication but requested remission based on pending objections, citing Sulzer Pumps India Private Limited v. Deputy Commissioner of Income Tax and OmniActive Health Technologies Limited v. Assessment Unit.
(b) Respondent’s Counsel: Argued that the Assessing Officer was not at fault due to the lack of intimation from the Petitioner and claimed that the DRP would be functus officio after the final assessment order.