SIEMENS LTD, MUMBAI V. DCIT 8(2)(1), MUMBAI

ITA 1954/MUM/2016

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Siemens Limited, the successor in interest to Siemens VAI Metals Technologies Pvt. Ltd., challenged the final assessment order for the assessment year 2011-12, which was based on a draft assessment order issued in the name of a non-existing entity post-amalgamation. The Tribunal examined the jurisdictional validity of the assessment proceedings, focusing on whether the draft assessment order, issued in the name of the non-existing company, rendered the subsequent proceedings invalid. The Tribunal noted that the assessee had duly informed the tax authorities about the amalgamation, yet the draft assessment order was not corrected to reflect the new entity. Citing precedents and legal provisions, the Tribunal concluded that the draft assessment order was invalid, leading to the setting aside of the final assessment order and all related proceedings.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 299635 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 13-09-2022
• Assessment Year: misc
• Appeal Filed On: 28-05-2022
• Other Referred Cases: PCIT vs Mahagun Realtors (P.) Ltd., CIT vs NTPC Ltd, Pr. CIT v. Maruti Suzuki India Ltd., FedEx Express Transportation and Supply Chain Services (India) (P.) Ltd. vs DCIT, BOEING India (P.) Ltd. Vs ACIT, Dimension Data Asia Pacific PTE Ltd. v. Dy. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing; International transaction; Scheme of amalgamation; Set aside
• Section: 271(1)(c); 143(3); 92B; 142(1); 153A; 143(1); 144C; 143(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “J” BENCH, MUMBAI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER IT(TP)A no.1954/Mum./2016 (Assessment Year : 2011–12) Siemens Limited (Successor in Interest to Siemens VAI Metals Technologies Pvt. Ltd.) Building no.1, 3 rd Floor, Behind Lift 130, Pandurang Budhkar Marg Worli, Mumbai 400 018 PAN – AABCV8348L ................ Appellant v/s Dy. Commissioner of Income Tax Circle–8(2)(1), Mumbai ................Respondent Assessee by : Shri Nitesh Joshi Revenue by : Ms. Vatsalaa Jha Date of Hearing – 14/09/2022 Date of Order – 12/12/2022 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee challenging the impugned final assessment order dated 25/01/2016, passed under section 143(3) r/w section 144C(13) of the Income Tax Act, 1961 ("the Act"), pursuant to the directions issued by the learned Dispute Resolution Panel–2, Mumbai, (―learned DRP‖), for the assessment year 2011–12. 2. In its appeal, the assessee has raised following grounds:– Siemens Limited (Successor in Interest to Siemens VAI Metals Technologies Pvt. Ltd.) Page | 2 ―1. On the facts and in the circumstances of the case and in law, the learned Transfer Pricing Officer (the learned TPO) and the learned Assessing Officer (the learned AO) erred and the Hon'ble Dispute Resolution Panel (DRP) further erred in upholding / confirming an addition of Rs. 4,52.41.176/- to the Appellant's total income. 2. On the facts and in the circumstances of the case and in law, the learned AO/TPO erred and the Hon ble DRP further erred in upholding / confirming the action of the learned AO/TPO in in not stating any reasons to show that either of the conditions mentioned in clauses (a) to (d) of Section 92C(3) of the Act were satisfied before making an adjustment to the total income of the Appellant. Turnkey project function: 3. On the facts and in the circumstances of the case and in law, the learned AO/TPO erred and the Hon'ble DRP further erred in upholding / confirming the action of the learned AO/TPO in making an adjustment of Rs. 91,27.199/- to the total income of the Appellant in respect of the international transactions pertaining to turnkey project function. 4. On the facts and in the circumstances of the case and in law, the learned AO/TPO erred and the Hon'ble DRP further erred in upholding / confirming the action of the learned AO/TPO in rejecting segmental profit and loss account prepared by the Appellant and adopting the entity-level margin for the purpose of benchmarking analysis following inconsistent approach vis-à-vis previous year and without providing cogent reasons. 5. On the facts and in the circumstances of the case and in law, the learned AO/TPO erred and the Hon'ble DRP further erred in upholding / confirming the action of the learned AO/TPO in rejecting the Appellant's claim for adjustment on account of extra-ordinary items, without providing cogent reasons and without appreciating the detailed evidences filed by the Appellant in support of the aforesaid claim. 6. On the facts and in the circumstances of the case and in law, the learned AO/TPO erred and the Hon'ble DRP further erred in upholding / confirming the action of the learned AO/TPO in cherry picking four additional companies and summarily rejecting the Appellant's contention against the said companies, even though the said companies were rejected by the Appellant while carrying out the benchmarking analysis and thereby adopting ad-hoc, arbitrary and inconsistent approach with a pre-determined mind set of making an adjustment to the income of the Appellant. 7. On the facts and in the circumstances of the case and in law, the leamed AO/TPO erred and the Hon'ble DRP further erred in upholding / confirming the action of the learned AO/TPO in rejecting the without prejudice contention of the Appellant to compute the margin of alleged comparable companies based on multiple year financial data, without appreciating the facts of the case and without providing cogent reasons. Intra-group administrative services: Siemens Limited (Successor in Interest to Siemens VAI Metals Technologies Pvt. Ltd.) Page | 3 8. On the facts and in the circumstances of the case and in law, the learned AO TPO erred and the Hon'ble DRP further erred in upholding confirming the action of the learned AO/TPO in making an adjustment of Rs. 3,61.13,977 to the total income of the Appellant in respect of the international transactions pertaining to availing of intra-group administrative services 9. On the facts and in the circumstances of the case and in law, the learned AO TPO erred and the Hon'ble DRP further erred in upholding / confirming the action of the learned AO/TPO in adopting an arbitrary approach by disallowing the expenses relating to certain services without providing cogent reasons and without appreciating the detailed evidences filed by the Appellant in support of such services, with a pre-determined mind set of making an adjustment to the income of the Appellant. 10. On the facts and in the circumstances of the case and in law, the learned AO/TPO erred and the Hon'ble DRP further erred in upholding/ confirming the action of the learned AO/TPO in making an adjustment without appreciating the facts of the case and without considering the detailed benchmarking analysis conducted and detailed submissions made by the Appellant before the learned AO/TPO Other grounds: 11. The learned AO erred in passing the impugned order under the Permanent Account Number of Siemens VAI Metals Technologies Pvt. Ltd. which has ceased to exist on the date of the impagned order on account of its merger with Siemens Limited with effect from 1 October 2011, thereby the entire assessment proceedings be regarded to be void ab initio as the same has been passed in the case of non-existent entity. 12. On the facts and in the circumstances of the case and in law, the learned AO erred in initiating penalty proceedings under section 271(1)(c) of the Act. The Appellant prays that the penalty proceedings may please be dropped. 13. The Appellant submits that the above grounds are independent and without prejudice to one another. 14. The Appellant craves leave to add, alter, amend or withdraw all or any of the grounds of appeal herein above and to submit such statements, documents and papers as may be considered necessary either at or before the hearing of this appeal as per the law.‖ 3. The assessee, vide application dated 18/01/2021, raised the following additional grounds of appeal: ―1. The learned Assessing Officer (AO) has exceeded his jurisdiction by passing the impugned Assessment Order under section 143(3) read with section 144C(13) of the Income Tax Act, 1961. (the Act) dated 25 January 2016, beyond the mandatorily prescribed time limit as per section 153C(1) of the Act, which is 31 March 2014, [in case where there is no valid reference made under Siemens Limited (Successor in Interest to Siemens VAI Metals Technologies Pvt. Ltd.) Page | 4 section 92CA(1)] and thereby rendering the said Assessment Order bad in law, without jurisdiction, barred by limitation and void ab initio; hence the same is liable to be quashed. 2. Without prejudice to the above ground, the draft assessment order under section 143(3) read with 144C(1) of the Act, in name of Siemens VAI Metals Technologies Private Limited being a non-existent entity is void-ab-initio rendering all subsequent proceedings thereafter to be illegal and bad in law. 3. Without prejudice to the above ground, directions issued by the leamed Dispute Resolution Panel (DRP) under section 144C(5) of the Act in the name of a non-existent entity is void-ab- initio also rendering the final assessment order dated 25 January 2016 to be illegal and bad in law. The Appellant craves leave to add, alter, amend, substitute and/or modify in any manner whatsoever all any of the foregoing grounds of appeal at or before the hearing of the appeal.‖ 4. In the aforesaid additional grounds of appeal, the assessee has raised jurisdictional issues challenging the validity of the assessment, which goes to the root of the matter, therefore the parties were heard on the jurisdictional issue at the outset. In additional grounds No. 2 and 3, the assessee has challenged the validity of the draft assessment order and directions issued by the learned DRP on a non-existing entity. While, in additional ground No. 1, the assessee has challenged that the final assessment order is barred by limitation. Since the validity of the draft assessment order is vital for finalising the assessment, therefore, we proceed to first deal with additional grounds No. 2 and 3. 5. The brief facts of the case pertaining to this issue are: For the year under consideration, Siemens VAI Metals Technologies Pvt. Ltd. filed its return of income on 29/11/2011, declaring a total income of Rs. 4,39,26,124. The return of income filed was processed under section 143(1) of the Act. Subsequently, the case was selected for scrutiny, and notice dated 08/08/2012, under section 143(2) was issued on Siemens VAI Metals Siemens Limited (Successor in Interest to Siemens VAI Metals Technologies Pvt. Ltd.) Page | 5 Technologies Pvt. Ltd by the ITO, Kolkata. Pursuant to the order dated 17/08/2012, passed by the Hon’ble Bombay High Court, Siemens VAI Metals Technologies Pvt. Ltd, inter-alia, was amalgamated with Siemens Ltd. with effect from 01/10/2011. As a consequence, Siemens Ltd was the resultant amalgamated company, and Siemens VAI Metals Technologies Pvt. Ltd., i.e. the erstwhile company, ceased to exist subsequent to the approval of the scheme of amalgamation by the Hon’ble Bombay High Court. The assessee vide letter dated 18/10/2012, intimated the DCIT, Kolkata about the aforesaid amalgamation. Thereafter, vide another letter dated 06/05/2013, the assessee again intimated the DCIT, Kolkata about the aforesaid amalgamation and informed that Siemens VAI Metals Technologies Pvt. Ltd. has ceased to exist as an independent legal entity from the date of order passed by the Hon’ble Bombay High Court approving the scheme of amalgamation. In the said letter, the assessee also requested DCIT, Kolkata to transfer the case from its jurisdiction to the jurisdiction of the amalgamated company i.e., Siemens Ltd, which is assessed under the charge of CIT, Range-7, Mumbai. The copy of the aforesaid letter dated 06/05/2013 was also filed with the office of CIT, Range- 7, Mumbai on 22/05/2013. Thereafter, on 16/12/2013, DCIT–7(2), Mumbai issued notice under section 142(1) r/w section 129 of the Act seeking details and documents for the purpose of scrutiny assessment for the year under consideration. As international transactions within the meaning of section 92B of the Act were entered into by the erstwhile company, reference was made to the Transfer Pricing Officer (‘TPO’) under section 92CA(1) of the Act on 13/06/2013. At this stage, it is pertinent to note that the aforesaid reference to the TPO, as noted in order passed under section 92CA(3) of the Act, was in Siemens Limited (Successor in Interest to Siemens VAI Metals Technologies Pvt. Ltd.) Page | 6 the name of both the erstwhile company as well as the existing amalgamated company. Pursuant to the transfer of jurisdiction to TPO, Mumbai, various notices under section 92CA(2) of the Act were issued though in the name of the erstwhile company. The TPO vide order dated 21/01/2015, passed in the name of Siemens Ltd (Siemens VAI Metals Technologies Pvt. Ltd.) made a total transfer pricing adjustment of Rs. 4,61,53,675. In conformity with the order passed by the TPO, the Assessing Officer (‘AO’) vide draft assessment order dated 20/02/2015, passed under section 143(3) r/w section 144C(1) of the Act computed the total income of the assessee at Rs. 9,00,79,800. It is pertinent to note that the aforesaid draft assessment order was passed in the name of the erstwhile company. Siemens Ltd filed detailed objections before the learned DRP against the additions made by the AO/TPO. Vide its directions issued under section 144C(5) of the Act, passed in the name of Siemens VAI Metals Technologies Pvt. Ltd. (through their successors Siemens Ltd), the DRP, inter-alia, rejected the objections. The AO passed the final assessment order under section 143(3) read with section 144C(13) of the Act in the name of Siemens Ltd (successor in interest to Siemens VAI Metals Technologies Pvt. Ltd.), assessing the total income at Rs. 5,30,53,320. 6. During the hearing, the learned Authorised Representative (‘learned AR’) submitted that despite due intimation by the assessee regarding the amalgamation, the draft assessment order was passed in the name of a non- existing entity and therefore the same cannot be said to be valid draft assessment order in existence. Thus, all the subsequent proceedings are bad in law and void ab initio. The learned AR also submitted that notice under Siemens Limited (Successor in Interest to Siemens VAI Metals Technologies Pvt. Ltd.) Page | 7 section 143(2) was issued on the erstwhile company before amalgamation and no new notice pursuant to amalgamation was issued in the name of the existing amalgamated company. In support of his submission, the learned AR placed reliance upon various decisions. 7. On the contrary, the learned Departmental Representative (‘learned DR’) objected to the admission of additional grounds of appeal and submitted that this issue was not raised before the lower authorities. The learned DR by referring to the cover letter to the draft assessment order submitted that names of both entities are mentioned in the same. The learned DR submitted that the final assessment order has been passed in the correct name and therefore the assessment has rightly been made in the name of the existing amalgamated company. The learned DR placed reliance upon the decision of the Hon’ble Supreme Court in PCIT vs Mahagun Realtors (P.) Ltd., [2022] 443 ITR 194 (SC). 8. We have considered the rival submissions in respect of additional grounds of appeal No. 2 and 3, and perused the material available on record. In the present case, the Revenue has objected to the admission of additional grounds of appeal on the basis that no such ground was raised before the lower authorities and this issue has been raised for the first time before the Tribunal. We find that the Hon’ble Supreme Court in CIT vs NTPC Ltd, [1998] 229 ITR 383 (SC) held that legal issues can be raised for the first time before the Tribunal, so long as the relevant facts are on record in the assessment proceedings for that issue. As the letters filed by the assessee intimating the amalgamation of the erstwhile company with the existing amalgamated Siemens Limited (Successor in Interest to Siemens VAI Metals Technologies Pvt. Ltd.) Page | 8 company as well as all the orders passed by the lower authorities form part of the assessment record, therefore an investigation into fresh facts is not required. Since the issue raised by way of additional grounds of appeal is a legal issue, which can be decided on the basis of facts available on record, the additional grounds of appeal are admitted for adjudication. 9. As per the assessee, the draft assessment order passed in the name of the non-existing entity, despite intimation of amalgamation of the erstwhile company with the existing amalgamated company, is bad in law and therefore void ab initio. It is evident from the record that immediately after the approval of the scheme of amalgamation by the Hon’ble Bombay High Court vide order dated 17/08/2012, the assessee intimated the AO, Kolkata about the amalgamation. As per the letter dated 06/05/2013, filed by the assessee before the AO, Kolkata as well as before CIT–7, Mumbai, forming part of the paper book from pages 39 – 41, we find that the assessee again intimated about the amalgamation and the fact that the erstwhile entity has ceased to exist as an independent legal entity. We find that the Hon’ble Supreme Court in Pr. CIT v. Maruti Suzuki India Ltd. [2019] 416 ITR 613 (SC) held that where the assessee company was amalgamated with another company and thereby lost its existence, assessment order passed subsequently in name of the said non-existing entity, is without jurisdiction and is liable to be set aside. The Hon’ble Supreme Court further held that participation in the assessment proceedings cannot operate as an estoppel against the law. Insofar as the decision of the Hon’ble Supreme Court in Mahagun Realtors Pvt. Ltd. (supra), on which reliance has been placed by the learned DR, we find that in the facts Siemens Limited (Successor in Interest to Siemens VAI Metals Technologies Pvt. Ltd.) Page | 9 of that case no intimation regarding the fact of amalgamation was filed before the Revenue and the taxpayer in that case also suppressed the fact of amalgamation in the return filed under section 153A of the Act post amalgamation. The Hon’ble Supreme Court further notes that the conduct of the taxpayer, commencing from the date of the search took place, and before all forums, reflects that it consistently held itself out as the assessee. Thus, in its peculiar facts, the Hon’ble Supreme Court decided the issue against the assessee. In the present case, as noted above, immediately after the approval of the scheme of amalgamation by the Hon’ble Bombay High Court, the assessee intimated the concerned AO regarding the fact of amalgamation. The assessee not only intimated the erstwhile AO but also intimated the current AO about the amalgamation of the erstwhile company with the existing amalgamated company and requested for transfer of jurisdiction from Kolkata to Mumbai. Further, we find from the record that the assessee filed all its submissions before the lower authorities in the name of the existing amalgamated company. Thus, we are of the considered view that the decision of the Hon’ble Supreme Court in Mahagun Realtors Pvt. Ltd. (supra) is distinguishable on facts and therefore, is not applicable to the present case. 10. It is the plea of the Revenue that the final assessment order has been passed in the correct name and therefore the assessment has culminated in the hands of the existing entity. Now, the issue arises whether the passing of a draft assessment order under section 143(3) r/w section 144C(1) of the Act in the name of a non-existing company renders all the subsequent proceedings null and void. We find that the very same issue came up for consideration Siemens Limited (Successor in Interest to Siemens VAI Metals Technologies Pvt. Ltd.) Page | 10 before the coordinate bench of the Tribunal in FedEx Express Transportation and Supply Chain Services (India) (P.) Ltd. vs DCIT, [2019] 108 taxmann.com 542 (Mum.) (Trib.), wherein it was held that where draft assessment order under section 144C was passed in name of amalgamating company, which was a non-existent entity in eyes of law on the date of passing of such order, it became an illegal order and, thus, entire assessment proceedings based on such an invalid draft assessment order is void ab initio and deserve to be quashed. The relevant findings of the Co–ordinate Bench of the Tribunal are as under: ―20. The next question which we are required to examine now is as to whether a valid draft assessment order is mandatory to assume jurisdiction under Section 144C of the Act. In other words, it would be appropriate to examine as to whether an invalid draft assessment order, as noted above in the earlier paras, can be construed as a jurisdictional defect meaning thereby that the same is incurable thereby making the subsequent assessment proceedings null and void in the eyes of law. The phraseology of Sec. 144C(1) of the Act itself shows that the Assessing Officer is required to forward a draft of the proposed order of assessment if he proposes to make a variation in the returned income or loss which is prejudicial to the interests of the assessee. Undoubtedly, the draft assessment order has legal connotations as it lays the foundation of any prospective reduction in the income of the assessee or creates a tax liability over and above the returned income. Thus, in that sense, it is not merely a procedural step in the assessment proceedings. Further, if we go a little deeper into the scheme of Sec. 144C of the Act and consider sub-section (3) of Sec. 144C of the Act, which reads as under:– "(3) The Assessing Officer shall complete the assessment on the basis of the draft order, if ......", It envisages that an assessment has to be completed on the basis of a draft assessment order, thereby making it apparent that the draft order is a core component of assessment. In fact, the assessee has an option to accept the draft order proposed by the Assessing Officer as per Sec. 144C(2) of the Act. In such a case, the Assessing Officer will proceed to pass the final assessment order under Section 143(3) r.w.s. 144C(13) of the Act without making any further variation in income/loss as assessed by him in the draft assessment order. In such a situation, the Assessing Officer would not have the option to amend the draft order of assessment proposed by him. Thus, looked at from the angle of the Assessing Officer, the draft assessment order is in fact the final assessment of income/loss of the assessee since only the assessee has been accorded a right under Section 144C(2) to file objections before the DRP. Further, the fact that the Assessing Officer does not have any right to appeal Siemens Limited (Successor in Interest to Siemens VAI Metals Technologies Pvt. Ltd.) Page | 11 against the final assessment order passed under Section 143(3) r.w.s. 144C(13) further proves the point that the draft assessment order proposed is a final order of assessment from the point of view of the Department. 21. Thus, it can be concluded that Sec. 144C of the Act impacts the assessee as it empowers the Assessing Officer to make a variation in the income or loss returned which is prejudicial to the interest of the assessee. Against such variation proposed by the Assessing Officer in the draft assessment order, it is only the assessee who has been given a right to object. Hence, such a right must arise from a legally sustainable valid draft order. If under the provisions of the Act an authority is required to exercise power or to do an act in a particular manner, then that power has to be exercised and the act has to be performed in that manner alone and not in any other manner, a proposition which is fortified by the judgment of the Hon'ble Allahabad High Court in the case of Dr. Shashi Kant Garg v. CIT [2006] 152 Taxman 308/285 ITR 158. In other words, the existence of a legally valid draft order becomes the premise or foundation for the commencement of a legally valid DRP proceedings and consequently, a legally valid final assessment order as per Sec. 143(3) r.w.s. 144C(13) of the Act. In view of the above, we hold that it is mandatory for the Assessing Officer to pass a legally valid draft assessment order and without the same, he cannot assume jurisdiction to proceed with the assessment under Section 144C of the Act. 22. Our above understanding stands fortified by the judgment of the Hon'ble Bombay High Court in the case of International Air Transport Association (supra) which has clearly held that a draft assessment order under Section 144C(1) of the Act is 'mandated' before the Assessing Officer passes a final order under Section 143(3) of the Act in case of an 'eligible assessee', and the relevant extract of the judgment reads as under :— "5. Therefore, in view of Section 144C(15) of the Act which defines eligible assessee to whom Section 144C(1) of the Act applies to inter alia mean any foreign company. Therefore, a draft assessment order under Section 144C(1) of the Act is mandated before the Assessing Officer passes a final order under Section 143(3) of the Act in case of eligible assessee. An draft assessment order passed under Section 144C(1) of the Act bestows certain rights upon an eligible assessee such as to approach the DRP with its objections to such a draft assessment order. This is for the reason that an eligible assessee's grievance can be addressed before a final assessment order is passed and appellate proceedings invoked by it. However, these special rights made available to eligible assessee under Section 144C of the Act are rendered futile, if directly a final order under Section 143(3) of the Act is passed without being preceded by draft assessment order. 6. In the above view, the assessment order dated 23rd March, 2015 passed by the Assessing Officer for the assessment year 2012-13 is completely without jurisdiction. This is so as it has not been preceded by a draft assessment order. Hence, the foundational/basic order viz. the assessment order dated 23rd March, 2015 is set aside and quashed as being without jurisdiction. Consequent orders passed on rectification application as well as on penalty are also quashed and set aside being unsustainable." 23. The Hon'ble Bombay High Court in the case of Dimension Data Asia Pacific PTE Ltd. v. Dy. CIT [2018] 96 taxmann.com 182/257 Taxman 442 has also emphasised that it is imperative for the Assessing Officer to first pass a draft Siemens Limited (Successor in Interest to Siemens VAI Metals Technologies Pvt. Ltd.) Page | 12 assessment order as per provisions of section 144C in the case of an eligible assessee and a final assessment order cannot be passed in absence of a draft assessment order since the assessee has been granted special rights to appeal under the scheme of section 144C of the Act. The relevant portion of the judgment reads as under :— "7. We note that, it is an undisputed position before us, that the petitioner is a Foreign Company and an eligible assessee as defined in Section 144C(15)(b)(ii) of the Act. It has been held by this Court in International Air Transport Association (supra) that a Foreign Company is entitled to being assessed in accordance with Section 144C of the Act. It is the above Section 144C of the Act, which provides a separate scheme for the manner in which the Assessing Officer would pass assessment orders under the Act and a separate procedure to challenge an draft order i.e. before an assessment order which is subject to appeal under the Act is passed. The entire object is to ensure that the disputes of Foreign Companies are resolved expeditiously and final assessment orders are not passed without a re- look to the proposed order (draft order), if so desired by the Foreign Company. In essence, it obliges the Assessing Officer to first pass a draft of the proposed assessment order indicating the proposed variation in the income returned. This draft Assessment Order is to be passed under Section 144C(1) of the Act, which entitles an eligible assessee such as a Foreign Company to approach the DRP with its objection to the Draft Assessment order. This is so provided, so that an eligible assessee can have his grievance addressed before the final assessment order is passed. In case, an assessee does not object to the draft assessment order, then a final assessment order is passed in terms of the draft assessment order by the Assessing Officer. It is only on passing of the final assessment order that the assessee, if aggrieved by it, would be able to approach the appellate authorities under the Act. These special rights are made available under Section 144C of the Act to an eligible assessee such as the petitioner. Therefore, it cannot be ignored by passing an final order under Section 144(13) of the Act without preceding it with a Draft Assessment order as required therein. 10. Moreover, so far as a Foreign Company is concerned, the Parliament has provided a special procedure for its assessment and appeal in cases where the Assessing Officer does not accept the returned income. In this case, in the working out of the order dated 5th May, 2017 of the Tribunal results in the returned income being varied, then the procedure of passing a draft assessment order under Section 144C(1) of the Act is mandatory and has to be complied with, which has not been done." (underlined for emphasis by us) 24. A perusal of the aforesaid judgments of the Hon'ble Bombay High Court leads to an irresistible conclusion that the draft assessment order imbibes a jurisdictional power in terms of Sec. 144C(1) of the Act. Obviously, passing of draft assessment order creates a right upon an 'eligible assessee' to approach the DRP. In other words, the triggering of special provisions contained in Sec. 144C of the Act or the special right available to the 'eligible assessee' springs up only by virtue of passing of draft assessment order under Section 144C(1) of the Act on the 'eligible assessee'. Thus, if such an order is passed on an assessee who is not an 'eligible assessee' as defined in Sec. 144C(15)(b)(i) of the Act, it would render the entire proceedings pursuant to such order null and void. Therefore, in the present case, as the draft assessment order has been passed in the name of FEIPL, which is a non-existent entity, and there is no draft assessment order passed in the name of FETSCS, the existing amalgamated company, there cannot be said to be a valid draft assessment order in existence. It is for this reason we are inclined to uphold the stand of Siemens Limited (Successor in Interest to Siemens VAI Metals Technologies Pvt. Ltd.) Page | 13 the assessee that all the subsequent proceedings post the invalid draft assessment order are illegal, bad in law and void ab initio.‖ 11. We find that similar findings were rendered by another Co–ordinate Bench of the Tribunal in BOEING India (P.) Ltd. Vs ACIT, [2020] 121 taxmann.com 276 (Delhi-Trib.). It was the submission of the learned DR that the cover letter to the draft assessment order mentioned the name of both entities and therefore merely mentioning the name of the non-existing company in the draft assessment order is not fatal. We are of the considered view that the cover letter to the draft assessment order is merely an intimation of the passing of the draft assessment order and the same cannot be equated to an order in itself. As it is only on the basis of the draft assessment order, the AO either completes the assessment or the assessee proceeds to file the objection against the additions made before the learned DRP under section 144C of the Act. We further find that the learned DRP has also issued its directions under section 144C(5) of the Act in the name of Siemens VAI Metals Technologies Pvt. Ltd. (through their successors Siemens Ltd), which we find to be not a valid manner of passing the order as held by the Hon’ble Supreme Court in Maruti Suzuki India Ltd (supra). 12. Therefore, in light of the decision of the Hon’ble Supreme Court in Maruti Suzuki India Ltd (supra), the draft assessment order passed in the name of the non-existing company cannot be said to be a valid draft assessment order and therefore is set aside. Further, respectfully following the decision of the coordinate bench of the Tribunal in FedEx Express Transportation and Supply Chain Services (India) (P.) Ltd. (supra), all subsequent proceedings resulting Siemens Limited (Successor in Interest to Siemens VAI Metals Technologies Pvt. Ltd.) Page | 14 from the invalid draft assessment order are also bad in law, void ab initio, and thus are ordered to be set aside. As a result, additional grounds No. 2 and 3, raised by the assessee, are allowed. 13. As relief has been granted to the assessee in respect of the aforesaid jurisdictional issue, the other grounds raised by the assessee on the aspect of limitation as well as on merits have become academic in nature and therefore are left open. 14. In the result, the appeal by the assessee is allowed. Order pronounced in the open Court on 12/12/2022 Sd/- M. BALAGANESH ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 12/12/2022 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Mumbai City concerned; (5) The DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai