- Case
- ZARAH RAFIQUE MALIK v. INCOME TAX OFFICER IT WARD 3 2 1 MUMBAI AND 1 ORS (Bombay High Court, 03-03-2025)
- Law
- Income-tax Act.
Facts: The petitioner, Zarah Rafique Malik, challenged a final assessment order dated 28 May 2024 under Section 143(3) read with Section 144C(3) of the Income Tax Act, 1961, along with consequential notices of demand. The petitioner had filed objections to the draft order before the Dispute Resolution Panel (DRP) but inadvertently failed to inform the Assessing Officer about the pendency of these objections.
Procedural Posture: The case came before the High Court of Judicature at Bombay as a writ petition, challenging the final assessment order and seeking remission of the matter to the DRP for reconsideration.
Issue: Whether the final assessment order should be set aside and the matter remitted to the DRP for consideration, despite the petitioner's failure to inform the Assessing Officer about the pendency of objections before the DRP. Also, whether the DRP becomes functus officio once a final assessment order is made and the matter is subject to appeal before the Commissioner of Income Tax (Appeals).
Holding: The High Court set aside the impugned order and remitted the matter to the DRP, subject to the petitioner paying costs of Rs. 10,000/- to the High Court employees' medical welfare fund at Mumbai.
Reasoning: The Court noted that the facts were comparable to those in Sulzer Pumps India Private Limited, where a similar lapse was condoned and an additional opportunity was granted to the assessee. The Court distinguished the case from Undercarriage and Tractor Parts (P) Ltd vs. Dispute Resolution Panel-3, where the assessee had already challenged the final assessment order before the Commissioner of Income Tax (Appeals), rendering the DRP functus officio. The Court emphasized that the assessing officer was not at fault due to the lack of intimation regarding the pending DRP objections, but still deemed it appropriate to indulge the petitioner, subject to payment of costs. The court clarified that its decision was based on the specific facts of the case and should not be considered a precedent for exercising discretion in every similar matter.
