The Bombay High Court has quashed an Assessment order and Directions issued by the Dispute Resolution Panel (DRP). The court’s ruling underscores that the DRP’s authority to issue directions is limited to cases with pending assessments. Section 144C of the Act presupposes an ongoing assessment process, and if the assessing officer prematurely issues an assessment order without adhering to the mandatory timeline specified in the Act, the DRP should refrain from issuing directions.

The court considered the following key points, as presented by Mr. Padvekar:

(a) Section 144C(2) of the Act specifies that eligible assesses must either accept variations or raise objections within 30 days of receiving the draft order.

(b) Section 144C(3) of the Act stipulates that the assessing officer should complete the assessment based on the draft order if no objections are received by the specified deadline. However, the assessing officer in this case issued an assessment order prematurely, which was deemed illegal.

(c) Section 144C(4) provides the assessing officer with a timeline to pass the assessment order, extending until February 28, 2019, in this instance, as objections should have been received by January 2, 2019.

(d) Section 144C(5) outlines the DRP’s role in providing directions to guide the assessing officer during assessment proceedings. This section presupposes ongoing assessment proceedings, making it clear that when an assessment order has already been issued, the DRP lacks the authority to issue directions.

In summary, the High Court ruled that the DRP’s power to give directions is contingent upon the existence of pending assessment proceedings. Once an assessment order is issued, regardless of its correctness, the assessment process concludes, and the DRP no longer possesses the authority to issue directions as outlined in subsection 5 of Section 144C of the Act.