Facts of the Case

The petitioner, Fujitsu India Pvt. Ltd., challenged the validity of the final assessment order dated 24.05.2021 for Assessment Year 2017–18. The order was passed under Sections 144C(3), 143(3), and 144B of the Act.

The petitioner contended that:

  • The statutory procedure under Section 144B was not followed.
  • The final assessment order was passed before expiry of the extended time limit for filing objections before the Dispute Resolution Panel (DRP).

The extension of time was granted through Circular No. 8/2021 issued by the Central Board of Direct Taxes.

Issues Involved

  1. Whether the final assessment order passed before expiry of the extended limitation period is legally sustainable?
  2. Whether non-adherence to procedure under Section 144B vitiates the assessment order?
  3. Whether the assessee’s right to file objections before DRP was violated?

Petitioner’s Arguments

  • The assessment order was passed prematurely, violating the extended timeline granted by CBDT Circular No. 8/2021.
  • The petitioner had time till 31.05.2021 to file objections, but the order was passed on 24.05.2021.
  • This action deprived the petitioner of a statutory remedy under Section 144C.
  • The faceless assessment procedure under Section 144B was not properly followed.

Respondent’s Arguments

  • The Revenue, through its counsel, acknowledged that the assessment order was passed before expiry of the extended deadline.
  • No substantial dispute was raised regarding the factual timeline.

Court’s Findings / Order

  • The extended deadline for filing objections was 31.05.2021, whereas the final order was passed on 24.05.2021.
  • This constituted a clear violation of procedural law and principles of natural justice.
  • The premature order deprived the petitioner of the statutory right to approach the DRP.

Final Order

  • The impugned final assessment order dated 24.05.2021 was set aside.
  • Liberty was granted to the petitioner to file objections before the DRP within four weeks.
  • DRP was directed to decide the objections on merits.

Important Clarification

  • The Court emphasized that statutory timelines, especially when extended by circulars, must be strictly adhered to.
  • Any assessment order passed before expiry of such timelines is invalid and unsustainable.
  • The ruling reinforces procedural safeguards in faceless assessments under Section 144B.

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS08112023CW57522021_151914.pdf

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