High Court of Punjab and Haryana · Judgments and reasoned final orders
UCWeb Mobile Private Ltd. v. Assessment Unit, Income Tax Department, National Faceless Assessment Centre, New Delhi and others
Civil Writ Petition No. 4329 of 2024 ·
Final assessment order passed under section 144C(3) because the eligible assessee inadvertently failed to intimate the AO of timely filed DRP objections set aside where the DRP subsequently issued directions under section 144C(5) and the TPO revised the transfer-pricing order.
1. FACTS OF THE CASE
For AY 2021-22, the TPO passed an order dated 29.10.2023 under section 92CA(3) proposing a transfer-pricing adjustment of Rs. 60,09,84,289, based on which the AO served a draft assessment order dated 06.11.2023 under section 144C(1). Being an 'eligible assessee' under section 144C(15)(b), UCWeb Mobile Pvt. Ltd. filed timely objections before the Dispute Resolution Panel (DRP) on 06.12.2023 within the 30-day statutory window under section 144C(2), but inadvertently omitted to upload/intimate the objections to the AO under section 144C(2)(b)(ii). Consequently, the AO passed a final assessment order, demand notice, and section 270A penalty notice on 15.12.2023 under section 143(3) read with sections 144B and 144C(3). During the pendency of CWP No. 4329 of 2024 (in which the High Court stayed the final order on 26.02.2024), the DRP issued directions on 27.08.2024 under section 144C(5) partially accepting the assessee's objections, and the TPO passed a revised order dated 17.09.2024 modifying the original TP addition.
2. DISCUSSION BY THE COURT
Analyzing the scheme of section 144C and agreeing with the Delhi High Court in Pepsico India Holdings Pvt. Ltd. v. Assessment Unit, NFAC, 2023 SCC OnLine Del 7661, the Bombay High Court in Sulzer Pumps India Pvt. Ltd., and the Karnataka High Court in Open Silicon Research Pvt. Ltd. v. Assessment Unit, NFAC, 2023 SCC OnLine Kar 80, the Division Bench held that once an eligible assessee files objections before the DRP within the 30-day period prescribed by section 144C(2), directions issued by the DRP under section 144C(5) are statutorily binding on the AO under section 144C(10) and must be given effect under section 144C(13). Moreover, once the TPO's original order dated 29.10.2023 — which was the sole foundation of the final assessment order dated 15.12.2023 — stood substituted by the TPO's revised order dated 17.09.2024 giving effect to the DRP's directions, allowing the premature final assessment order dated 15.12.2023 to stand would be absurd. The assessee gained nothing from its bona fide lapse in not intimating the AO and could not be prejudiced on that account.
3. JUDICIAL DECISION
The Punjab and Haryana High Court set aside the final assessment order, notice of demand under section 156, and penalty notice under section 274 read with section 270A, all dated 15.12.2023, restored the matter to the stage of section 144C(13), and directed the Assessing Officer to pass a fresh final assessment order in conformity with the DRP's directions dated 27.08.2024 and the TPO's order dated 17.09.2024.
4. OUTCOME
In favour of the assessee (UCWeb Mobile Private Ltd.); final assessment order, demand notice, and penalty notice dated 15.12.2023 set aside with direction to pass fresh order under section 144C(13) in line with DRP/TPO orders.
5. AKHB REVIEW POINT
AKHB analysis: Aligning the Punjab and Haryana High Court with the Delhi, Bombay, and Karnataka High Courts (Pepsico India, Sulzer Pumps, Open Silicon), this judgment confirms that an inadvertent omission to intimate the AO under section 144C(2)(b)(ii) when DRP objections were timely filed before the DRP does not defeat the mandatory binding force of DRP directions under sections 144C(10) and 144C(13).
Source and verification
Reviewed from the complete 14-page official High Court judgment PDF (20260807_PHHC010231812024.pdf, SHA-256: 727abec7944cb5849282da01603f8d8d35d126c958899507efc1f555d2d3e9d2).
Original PDF: 14 pages · SHA-256: 727abec7944cb5849282da01603f8d8d35d126c958899507efc1f555d2d3e9d2
Supplied source-reviewed note retained; original bytes and identity validation checked in this release. Substantive re-review is not claimed for this record.
Refers to the Income-tax Act, 1961 and allied statutory rules/circulars as applicable to the relevant assessment years.
No subsequent Supreme Court reversal or stay is recorded in the source judgment text.
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