INDIA Law and Practice Contributed by: Deepak Chopra, Harpreet Singh Ajmani, Rohan Khare, Pulkit Pandey and Priyam Bhatnagar, AZB & Partners
Thereafter, in the first instance, the Assessing Officer passes “Draft Assessment Order” whilst incorporating all the transfer pricing adjustments proposed by the TPO. At this stage, two options are available with the taxpayer. • To get the assessment adjudicated by a col - legium of three commissioners, ie, Dispute Resolution Panel (DRP) – in this process, the adjudication by the DRP is considered as continuation of assessment and, therefore, no tax demand is determined or becomes payable. Subsequent to the passing of the directions by the DRP, the Assessing Officer concludes the assessment by passing a Final Assessment Order and computes the tax demand in line with such directions issued by the DRP. Thereafter, in terms of Section 253 of the IT Act, only a taxpayer who is aggrieved by the Final Assessment Order, may directly file an appeal before the Income Tax Appellate Tribunal. • To communicate with the Assessing Officer of his/her acceptance of the Draft Assess - ment Order so that the Assessing Officer can complete the assessment by passing a Final Assessment Order (in terms of finalising the Draft Assessment Order) – thereafter, the taxpayer can challenge the Final Assessment Order by filing an appeal before the Commis - sioner of Income Tax (Appeals) (CIT(A)). The Final Assessment Order is accompanied by a notice of demand and a penalty notice in case the Assessing Officer wishes to initiate penalty proceedings. At this stage, an option is also available to the taxpayer to file an application seeking stay on recovery of tax demand before the Assessing Officer under Section 220(6) of the IT Act. In terms of avail - able judicial precedents, if a taxpayer can jus - tify a strong prima facie case, balance of con - venience and undue hardship, the Assessing
Officer/Principal Commissioner of Income Tax may grant conditional or blanket stay during the pendency of appeal before the CIT(A). Subsequently, post-receipt of the order of the CIT(A), in case of any grievance with the order passed by the CIT(A), an appeal may directly be filed by the taxpayer or the Tax Authorities before the Income Tax Appellate Tribunal. Where an appeal is filed by the taxpayer before the Income Tax Appellate Tribunal, then in terms of Section 254(2A) of the IT Act, subject to the condition that the taxpayer deposits not less than 20% of the amount of tax and interest or fee/penalty, or any other sum payable under the provisions of the IT Act, or furnishes security of equal amount in respect thereof, the Income Tax Appellate Tribunal may grant stay on recovery of tax demand. However, where the taxpayer may establish a strong prima facie case on merits whilst demonstrating that the tax demand is not recoverable on account of the issue/s being cov - ered in its favour, then the Tribunal in its discre - tion may direct payment of a sum which is less than 20% of the outstanding tax demand. Thereafter, the taxpayer or Indian Tax Authorities being aggrieved from the order of the Income Tax Appellate Tribunal may file a statutory appeal before the Hon’ble High Court which would be maintainable only in a case where there is “sub- stantial question of law” . Subsequently, any per - son aggrieved by the order of the Hon’ble High Court has an option to approach the Hon’ble Supreme Court of India under Section 260B of the IT Act or under Article 136 of the Constitution of India (which is a discretionary jurisdiction). Apart from the above-mentioned routes, in terms of Article 226 of the Constitution of India, a taxpayer may also have the remedy of directly approaching the Hon’ble High Court by filing a
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