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Bombay High Court Clarifies Scope of ‘Eligible Assessee’ under Section 144C of the Income Tax Act November 7, 2025
Published in: Alerts
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The Bombay High Court, in Classic Legends (P.) Ltd. v. ACIT, held that an assessee cannot be treated as an “eligible assessee” under Section 144C(15)(b) of the Income Tax Act, 1961, where no variation in income arises pursuant to a Transfer Pricing Officer’s (TPO) order.
Upholding the Gujarat High Court’s ruling in Pankaj Extrusion Ltd., the Court clarified that the draft assessment procedure under Section 144C applies only when there is an actual variation in income resulting from the TPO’s findings. The High Court held that I n the absence of any such variation, the Assessing Officer was not empowered to issue a draft assessment order under Section 144C(1).
The final assessment order was also quashed holding that as a consequence to the above, there was no occasion to pass the same by invoking the provisions of Section 144C(3).
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