Delhi HC held that failure to issue draft assessment order under Section 144C invalidates assessment of BVI-incorporated foreign company.
Draft Order Mandatory for Foreign Company Under Section 144C
The Delhi High Court held that a BVI-incorporated foreign company was an eligible assessee under Section 144C and that the failure to issue a draft assessment order rendered the final assessment order void.
The court rejected the Revenue’s argument that foreign companies are excluded from Section 144C benefits. It observed that the provision applies to all assessees unless specifically excluded, and no such exclusion exists.
Failure to comply with mandatory consultation process under Section 144C(2) vitiates the assessment proceeding.
This decision strengthens procedural safeguards for foreign taxpayers. It confirms that Section 144C applies regardless of jurisdiction of incorporation. Assessing Officers must follow due process even in complex cross-border cases. Practitioners should scrutinize assessment orders for compliance with pre-assessment consultation mandates.
Citations
- Section 144C, Income Tax Act
