Honda Cars India Limited … vs Deputy Comm. Of Income Tax & Anr. on 17 February, 2016


WP(C) 4262/2015 & CM No.7736/2015(stay)

1. A short question arises for consideration in the present writ
petition, i.e., whether the Assessing Officer was competent to pass a
draft assessment order under Section 144C(1) of the Income-tax Act,
1961 (hereinafter referred to as “the Act”)? The question arises in
view of the contention of the petitioner that the petitioner does not fall

WP(C)No.4262/2015 Page 1 of 8
in the category of an “eligible assessee”, as defined under Section
144C(15)(b) of the Act.
2. The contention of the petitioner is that firstly the petitioner is
not an eligible assessee, as defined under Section 144C(15)(b) of the
Act as the Transfer Pricing Officer (TPO) had not proposed any
variation in the income or loss return which was to the prejudice of
the petitioner. Secondly, while framing the draft assessment order,
the Assessing Officer was also required to give effect to the Circular
issued by the Central Board of Direct Taxes (CBDT) while making
disallowances under Section 40(a)(i) of the Act whereby the
Assessing Officer could make disallowance of only the net amount
and not the gross amount of purchases made by the petitioner from its
associated enterprise. Thirdly, it is contended that in terms of Section
153(1) third proviso, the assessment could be completed by
31.03.2015 and since only a draft assessment order was passed, which
suffers from jurisdictional defect, the assessment proceedings have
now become time barred.

Source: Indian Kanoon

Leave a Reply