Mohan Jute Bags Mfg.Co., Kolkata V. PCIT-12, Kolkata

ITA 416/KOL/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5930 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-09-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 02-07-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Transfer pricing; Set aside
• Section: 143(3); 144C; 153; 92CA; 6; 263; 92

Judgement Text

1 ITA NO. 416/KOL/2020 MOHAN JUTE BAGS MFG. CO., AY 2014-15 , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE HONBLE SHRI A. T. VARKEY, JM & HONBLE SHR I MANISH BORAD, AM] I.T.A. NO. 416/KOL/2020 ASSESSMENT YEAR: 2014-15 MOHAN JUTE BAGS MFG. CO. (PAN: AAFFM3412R) VS. PRINCIPAL COMMISSIONER OF INCOME- TAX-12, KOLKATA. APPELLANT RESPONDENT DATE OF HEARING (VIRTUAL) 08.09.2021 DATE OF PRONOUNCEMENT 15.09.2021 FOR THE APPELLANT SHRI AKKAL DUDHWEWALA, FCA FOR THE RESPONDENT SHRI TUSHAR DHAWAL SINGH, CIT, D R ORDER PER SHRI A. T. VARKEY, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. PCIT-12, KOLKATA DATED 17.03.2020 PASSED U/S 263 OF INCOME TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2014-15. 2. AT THE OUTSET, THE LD. AR SHRI AKKAL DUDHEWEWEL A ASSAILS THE JURISDICTION OF THE LD. PR. CIT-12, KOLKATA TO HAVE INVOKED THE REVISIONAL JURISDICTION U/S. 263 OF THE ACT. ACCORDING TO THE LD. AR, THE ORDER OF THE AO DATED 25.09.2017 HAS BEEN INTERDICTED BY THE LD. PR. CIT IS ITSELF NON-EST IN THE EYES OF LAW, T HEREFORE, THE IMPUGNED ORDER OF THE LD. PR. CIT IS NULL IN THE EYES OF LAW. 3. THE BRIEF FACTS OF THE CASE IN RESPECT OF THE JU RISDICTIONAL ISSUE IS THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR AY 2014-15ON 29. 09.2014 DECLARING TAXABLE INCOME OF RS.7,17,070/-. THE AO NOTICING THAT THE CASE WA S SELECTED FOR SCRUTINY UNDER CASS ISSUED STATUTORY NOTICES, TO COMMENCE THE SCRUTINY ASSESSMENT. THE AO NOTICED THAT AS THE TOTAL TRANSACTION OF THE ASSESSEE WITH THE RELA TED PARTY EXCEEDED RS. 5 CRORES, AND IT ATTRACTED THE PROVISIONS OF TRANSFER PRICING, HE RE FERRED THE SAME TO THE TRANSFER PRICING OFFICER ( HEREINAFTER REFERRED TO AS TPO) AFTER GETTING APPROVAL OF THE LD. PR. CIT-1 2, 2 ITA NO. 416/KOL/2020 MOHAN JUTE BAGS MFG. CO., AY 2014-15 KOLKATA DATED 27.12.2016. THEREAFTER, THE AO NOTED THAT PURSUANT TO THE REFERENCE THE TPO PASSED THE ORDER U/S. 92 CA(3) OF THE ACT ON 31 .07.2017 DETERMINING ARMS LENGTH PRICING ADJUSTMENT ( HEREINAFTER REFERRED TO AS ALP) AT RS.8,92,829/-; AND THEREAFTER HE COMPUTED THE TOTAL INCOME BY PASSING THE ASSESSM ENT ORDER U/S 143(3) OF THE ACT DATED 25.09.2017 AT RS.16,09,900/-. ACCORDING TO THE ASSESSEE, HE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHICH WAS DISMISSED EX PARTE. THEREAFTER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL; AND THE TRIBUNAL VID E ORDER DATED 30.04.2019 IN ITA NO. 2169/KOL/2018 RESTORED THE APPEAL BACK TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION OF THE APPEAL. WHEN THE SUBJECT MATTE R OF THE TRANSFER PRICING ADJUSTMENT WAS PENDING BEFORE THE LD. CIT(A) PURSUANT TO THE O RDER OF THE TRIBUNAL DATED 30.04.2019, IN BETWEEN THE LD. PR. CIT HAS ISSUED S HOW CAUSE NOTICE ( HEREINAFTER REFERRED TO AS SCN) DATED 30.11.2018 TO THE ASSESSEE CONVEYING HIS DESIRE TO EXERCISE HIS POWER U/S 263 OF THE ACT TO INTERVENE IN THE OR DER PASSED BY THE AO DATED 25.09.2017. PURSUANT TO THE SCN, THE ASSESSEE OBJE CTED TO THE EXERCISE OF REVISIONAL JURISDICTION BY POINTING OUT THAT THE SUBJECT MATTER OF THE ISSUE REGARDING TRANSFER PRICING HAS ALREADY BEEN AGITATED BY THE ASSESSEE BEFORE TH E APPELLATE FORUM; AND THE LIS PENDENS MATTER CANNOT BE INTERFERED WITH. HOWEVER, THE LD . PR. CIT DID NOT AGREE. ACCORDING TO HIM, THE ASSESSEE HAS NOT RAISED BEFOR E THE LD. CIT(A) THE LEGAL ISSUE OF FAILURE ON THE PART OF AO TO FRAME DRAFT ASSESSMENT ORDER AND, THEREFORE, ACCORDING TO HIM, HE CAN INTERFERE AND HE WAS PLEASED TO SET ASI DE THE ORDER OF THE AO DATED 25.09.2017 AND DIRECTED THE AO TO MAKE ASSESSMENT D E NOVO AFTER PROPERLY COMPLYING WITH THE PROVISIONS OF SECTION 144C OF THE ACT. AG GRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE ASSESSEES RETURN OF INCOME WAS TA KEN UP FOR SCRUTINY PROCEEDINGS AND THE AO HAD REFERRED TO THE TPO THE DOMESTIC TRANSFER PR ICING ISSUE. PURSUANT TO THE REFERENCE MADE TO THE TPO, THE TPO PASSED THE ORDER U/S. 92CA (3) OF THE ACT DATED 31.07.2017 DETERMINING ALP AT RS.8,92,829/-. THEREAFTER, THE AO HAD ISSUED THE ORIGINAL ASSESSMENT ORDER U/S. 143(3) OF THE ACT DATED 25.09.2017 WHICH ACCORDING TO THE ASSESSEE, IS NON EST IN THE EYES OF LAW, SINCE AS PER LAW THE AO WAS BOUND TO ISSUE DRAFT ASSESSMENT ORDER AND 3 ITA NO. 416/KOL/2020 MOHAN JUTE BAGS MFG. CO., AY 2014-15 THEREBY INTER-ALIA GIVE AN OPPORTUNITY TO ASSESSEE TO AVAIL TO GO BEF ORE THE DISPUTE RESOLUTION PANEL ( HEREINAFTER REFERRED TO AS DRP). THUS BY NOT FRAMING THE DRAFT ASSESSMENT ORDER, AFTER RECEIPT OF TPO ORDER, THE A O HAS ACTED ARBITRARILY WITHOUT SCANT REGARD TO THE MANDATORY PROCEDURE TO BE FOLLOWED AS PER SECTION 144C OF THE ACT AND THEREBY VITIATING THE ASSESSMENT ORDER DATED 25.09. 2017. 5. THE ISSUE ARISING IN THE PRESENT APPEAL BEFORE US IS WHETHER SUCH AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS VOID BEING PASSE D WITHOUT JURISDICTION? SO IN SUCH AN EVENT, WHETHER THE LD. PCIT CAN INTERFERE BY EXERCI SING HIS JURISDICTION U/S 263 OF THE ACT BY HOLDING THAT SUCH ASSESSMENT ORDER IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE, WHICH WOULD PAVE WAY FOR HIM TO EXERCISE T HE REVISIONAL JURISDICTION U/S 263 OF THE ACT. THE LD. PCIT ON THE EXAMINATION OF THE RECORD NOTED THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS FRAMED WITHOUT ISSUING DRAFT ORDER OF THE PROPOSED ADDITION TO THE ASSESSEE AS IS REQUIRED UNDER SECTION 144C OF T HE ACT, AND HAD PASSED AN ORDER UNDER SECTION 143(3) OF THE ACT MAKING ADDITION OF RS. 8, 92,829/-. THE SAID ORDER PASSED BY THE ASSESSING OFFICER, AS PER THE LD. PCIT WAS NOT IN C ONFORMITY WITH LAW AND WAS HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E AND ACCORDINGLY, SHOW CAUSE NOTICE WAS ISSUED UNDER SECTION 263 OF THE ACT ASKING THE ASSE SSEE TO EXPLAIN AS TO WHY THE SAID ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3 ) OF THE ACT SHOULD NOT BE REVISED OR SET-ASIDE UNDER SECTION 263 OF THE ACT. THE CONTENT ION OF THE ASSESSEE BEFORE US IS THAT THE OMISSION ON THE PART OF THE ASSESSING OFFICER NOT T O COMPLY WITH THE PROVISIONS OF SECTION 144C(2) OF THE ACT BY NOT FRAMING THE DRAFT ASSESS MENT ORDER AND BY NOT PROVIDING THE STATUTORY PRESCRIBED TIME TO THE ASSESSEE TO EXERCI SE THE DISCRETION TO FILE OBJECTIONS BEFORE THE DRP, MAKES THE ASSESSMENT ORDER PASSED BY THE A SSESSING OFFICER TO BE WITHOUT JURISDICTION AND SO VOID. 6. UNDER THE PROVISIONS OF SECTION 144C OF THE ACT , IT IS PROVIDED THAT WHERE THE ASSESSING OFFICER PROPOSES TO MAKE, ON OR AFTER 01. 10.2009, ANY VARIATION IN THE INCOME OR LOSS RETURNED, WHICH IS PREJUDICIAL TO THE INTEREST OF ASSESSEE, THEN THE ASSESSING OFFICER SHALL IN THE FIRST INSTANCE FORWARD THE DRAFT OF TH E PROPOSED ORDER OF ASSESSMENT TO THE ELIGIBLE ASSESSEE. UNDER SUB-SECTION (2) OF SECTION 144C OF THE ACT ON RECEIPT OF THE DRAFT ORDER, THE ELIGIBLE ASSESSEE SHALL WITHIN 30 DAYS O F THE RECEIPT, FILE HIS ACCEPTANCE OF THE 4 ITA NO. 416/KOL/2020 MOHAN JUTE BAGS MFG. CO., AY 2014-15 VARIATION TO THE ASSESSING OFFICER OR FILE HIS OBJE CTIONS, IF ANY, TO SUCH VARIATION WITH THE DRP AND THE ASSESSING OFFICER. UNDER SUB-SECTION (3 ) OF SECTION 144C OF THE ACT, THE ASSESSING OFFICER SHALL COMPLETE THE ASSESSMENT ON THE BASIS OF DRAFT ORDER IF THE ASSESSEE INTIMATES TO THE ASSESSING OFFICER THE ACCEPTANCE O F THE VARIATION OR NO OBJECTIONS ARE RECEIVED WITHIN PERIOD SPECIFIED IN SUB-SECTION (2) OF SECTION 144C OF THE ACT. THEREAFTER, THE ASSESSING OFFICER IS EMPOWERED TO PASS THE ASSE SSMENT ORDER WITHIN ONE MONTH FROM THE END OF MONTH, IN WHICH THE ACCEPTANCE IS RECEIVED O R THE PERIOD OF FILING OBJECTIONS UNDER SUB-SECTION (2) OF SECTION 144C OF THE ACT EXPIRES. UNDER SUB-SECTION (5) OF SECTION 144C OF THE ACT, IT IS PROVIDED THAT THE DISPUTE RESOLUTION PANEL SHALL IN CASE WHERE OBJECTION IS RECEIVED UNDER SUB-SECTION (2) ISSUE SUCH DIRECTION S AS IT THINKS FIT FOR THE GUIDANCE OF THE ASSESSING OFFICER TO ENABLE HIM TO COMPLETE THE ASS ESSMENT. UPON RECEIPT OF THE SAID DIRECTIONS, THE ASSESSING OFFICER SHALL IN CONFORMI TY WITH THE SAME, COMPLETE THE ASSESSMENT WITHOUT PROVIDING ANY FURTHER OPPORTUNIT Y OF BEING HEARING TO THE ASSESSEE WITHIN ONE MONTH FROM THE END OF THE MONTH IN WHICH SUCH DIRECTION IS RECEIVED, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTION 153 OR 153B OF THE ACT, AS PER SUB-SECTION (13) TO SECTION 144C OF THE ACT. IN VIE W OF THE AFORESAID PROVISIONS OF SECTION 144C OF THE ACT IT CAN BE SEEN THAT WHERE THE TPO P ROPOSES ANY VARIATION IN THE INCOME OR LOSS RETURNED BY THE ASSESSEE, WHICH IS PREJUDICIAL TO THE INTEREST OF ASSESSEE, THE ASSESSING OFFICER SHALL IN THE FIRST INSTANCE FORWARD THE DRA FT OF THE PROPOSED ASSESSMENT ORDER TO THE ASSESSEE AND THEREAFTER, IF NO OBJECTIONS ARE RECEI VED AND/OR THE ASSESSEE FILES HIS ACCEPTANCE TO THE VARIATION TO THE ASSESSING OFFICER, THEN THE ASSESSING OFFICER IS EMPOWERED TO COMPLETE THE ASSESSMENT WITHIN ONE MONTH FROM THE E ND OF THE MONTH THEREOF. IN CASE, THE ASSESSEE FILES HIS OBJECTION BEFORE THE DRP AND WHE RE THE SAID PANEL ISSUES DIRECTIONS AS IT THINKS FIT, THEN THE ASSESSING OFFICER ON RECEIPT O F SUCH DIRECTIONS SHALL COMPLETE THE ASSESSMENT IN CONFORMITY WITH SUCH DIRECTIONS. IN V IEW OF THE SAID PROVISIONS OF THE ACT, WE NOTE THAT THE COMPLIANCE TO SECTION 144C OF THE ACT IS MANDATORY IN ALL SUCH CASES, WHERE THE TPO PROPOSES VARIATION IN THE INCOME OR LOSS RE TURNED, WHICH IS PREJUDICIAL TO THE INTERESTS OF ASSESSEE. ONLY AFTER COMPLYING WITH TH E CONDITIONS LAID DOWN IN SECTION 144C OF THE ACT, THE ASSESSING OFFICER IS EMPOWERED TO PASS THE ASSESSMENT ORDER UNDER SECTION 143(3) R.W.S. 144C OF THE ACT BY COMPLETING THE ASS ESSMENT ON SUCH ENHANCED INCOME OR VARIATION IN THE LOSS RETURNED BY THE ASSESSEE. 5 ITA NO. 416/KOL/2020 MOHAN JUTE BAGS MFG. CO., AY 2014-15 7. IN THE CASE OF VIJAY TELEVISION VS. DRP [2014] 225 TAXMAN 35 (MAD), IT WAS HELD IN PARA 12 THAT NON-PASSING OF DRAFT ASSESSMENT ORDER AFTER ADJUSTMENT MADE BY THE TPO RENDERS PROCEEDINGS NULL & VOID BY OBSERVING AS UND ER:- UNDER SECTION 144C(1) OF THE ACT, WITH EFFECT FROM 1ST OCTOBER 2009, THE ASSESSING OFFICER HAS TO MANDATORILY ISSUE A DRAFT ASSESSMENT ORDER IF THERE IS A PROPOSED VARIATION TO THE RETURN WHICH ARE PREJUDICIAL TO THE ELIGIBLE ASSESSEE. THE FACT THAT THE PETITIONER IS AN ELIGIBLE ASSESSEE IS NOT IN D ISPUTE. WHILE SO, UNDER SECTION 144C(2) OF THE ACT, THE ELI GIBLE ASSESSEE HAS THE OPTION, EITHER TO ACCEPT THE VARIATION OR TO FILE THEIR OBJECTIONS BEFORE THE DR P AND SUCH OPTION HAS TO BE EXERCISED WITHIN 30 DAY S. ON SUCH OBJECTIONS FILED BY THE ASSESSEE, THE DRP S HALL ISSUE APPROPRIATE DIRECTION FOR THE GUIDANCE O F THE ASSESSING OFFICER UNDER SECTION 144C(5) OF THE ACT. IT IS ONLY THEREAFTER, THE AO IS BOUND TO PASS A FINAL ORDER OF ASSESSMENT IN COMPLIANCE WITH THE DI RECTIONS ISSUED BY THE DRP UNDER SECTION 144C(3) OF THE ACT. IN THE PRESENT CASE, WITHOUT FOLLOWING ABO VE MANDATORY PROCEDURE, THE AO HAS PASSED THE ORDER OF ASSESSMENT ON 26.03.2013 AND SUBSEQUENTLY ISSUED A CORRIGENDUM ON 15.04.2014 TO RECTIFY THE MISTAKE COMMITTED IN PASSING THE FINAL ORDER OF ASS ESSMENT INTER ALIA TO TREAT IT AS A DRAFT ASSESSMEN T ORDER. THIS COURSE OF ACTION ADOPTED BY THE SECOND RESPONDENT IS CONTRARY TO THE MANDATORY PROVISIONS CONTAINED IN THE ACT AND THE CORRIGENDUM ISSUED BY THE AO COULD NOT CURE THE DEFECT. THE VERY FACT THA T THE ASSESSING OFFICER HAS SIGNED THE ORDER OF ASSES SMENT AND ALSO ASSESSED THE AMOUNT PAYABLE BY THE ASSESSEE HAS BECOME COMPLETE AND IT CANNOT BE SIMPL Y TREATED AS A DRAFT ASSESSMENT ORDER OR IT CAN BE RECTIFIED BY ISSUING THE CORRIGENDUM. IN FACT, PURS UANT TO THE ORDER OF ASSESSMENT UNDER SECTION 143C, DEMAND WAS ALSO MADE FOR PAYMENT OF THE AMOUNT AND SUCH DEMAND HAS NOT BEEN WITHDRAWN BY THE SECOND RESPONDENT EVEN AFTER ISSUING THE CORRIGENDU M. EVEN AS PER THE WEBSITE OF THE DEPARTMENT, THE DEMAND MADE TO THE PETITIONER COMPANY CONTINUES TIL L DATE AND THEREFORE, THE FINAL ORDER AS WELL AS TH E CORRIGENDUM ISSUED BY THE SECOND RESPONDENT ARE VIT IATED BY ERRORS APPARENT ON THE FACE OF THE RECORD AND THEY ARE LEGALLY NOT SUSTAINABLE . 8. FURTHER WE NOTE THAT THE HONBLE HIGH COURT OF ANDHRA PRADESH IN M/S. ZUARI CEMENTS LTD. VS. ACIT (PETITION CC NO. 16694/2013 D ATE 27.09.2013) ON SIMILAR ISSUE WHERE AFTER RECEIPT OF THE ORDER PASSED BY THE TPO UNDER SECTION 92CA(3) OF THE ACT, THE ASSESSING OFFICER HAD PASSED THE ASSESSMENT ORDER U NDER SECTION 143(3) OF THE ACT RAISING A DEMAND OF RS.27,40,71,913/- WITHOUT GIVING AN OPPOR TUNITY TO THE ASSESSEE UNDER SECTION 144C OF THE ACT, OBSERVED THAT WHERE THE ASSESSING OFFICER PROPOSES TO MAKE ON OR AFTER 01.10.2009, ANY VARIATION IN THE INCOME OR LOSS RET URNED BY THE ASSESSEE, THEN NOTWITHSTANDING TO THE CONTRARY CONTAINED IN THE AC T, HE SHALL FIRST PASS THE DRAFT ASSESSMENT ORDER, FORWARD THE SAME TO THE ASSESSEE AND AFTER A SSESSEE FILES HIS OBJECTIONS, IF ANY, THE ASSESSING OFFICER SHALL COMPLETE THE ASSESSMENT WIT HIN ONE MONTH, IN VIEW OF THE PROVISIONS OF SECTION 144C OF THE ACT. IT WAS FURTH ER OBSERVED THAT THE ASSESSEE IS ALSO GIVEN AN OPTION TO FILE AN OBJECTION BEFORE THE DRP, IN W HICH THE LATTER CAN ISSUE DIRECTIONS FOR THE GUIDANCE OF ASSESSING OFFICER TO ENABLE HIM TO COMP LETE ASSESSMENT. WHERE THE ASSESSING OFFICER ACCEPTED THE VARIATION SUBMITTED BY THE TPO WITHOUT GIVING THE PETITIONER ANY OPPORTUNITY TO OBJECT TO IT AND PASS THE ASSESSMENT ORDER, IT WAS HELD BY THE HONBLE HIGH COURT OF A.P THAT THE IMPUGNED ORDER OF ASSESSMENT WAS CLEARLY CONTRARY TO SECTION 144C OF 6 ITA NO. 416/KOL/2020 MOHAN JUTE BAGS MFG. CO., AY 2014-15 THE ACT AND WAS WITHOUT JURISDICTION, NULL AND VOID . THE OBJECTION OF THE REVENUE THAT THE CIRCULAR NO.5/2010 OF THE CBDT WHICH LAID DOWN THAT THE PROVISIONS OF SECTION 144C OF THE ACT SHALL NOT APPLY FOR THE ASSESSMENT YEAR 2008-09 AND WOULD ONLY APPLY FROM ASSESSMENT YEAR 2010-11 AND LATER YEARS WAS HELD TO BE NOT TEN ABLE WHERE THE LANGUAGE OF SUB-SECTION (1) OF SECTION 144C OF THE ACT REFERRED TO THE CUTO FF DATE OF 01.10.2009 INDICATES THE INTENTION OF LEGISLATURE TO MAKE IT APPLICABLE. THE HONBLE HIGH COURT OF A.P FURTHER HELD THAT THE CIRCULAR NO.5/2010 ISSUED BY THE CBDT STAT ING THAT SECTION 144C(1) OF THE ACT WOULD APPLY ONLY FROM ASSESSMENT YEAR 2010-11 AND S UBSEQUENT YEARS AND NOT FROM ASSESSMENT YEAR 2008-09 WAS CONTRARY TO THE EXPRESS ED LANGUAGE OF THE SECTION AND THE SAID VIEW OF THE REVENUE WAS HELD TO BE NOT ACCEPTABLE. THE HONBLE HIGH COURT OF A.P THEREAFTER HELD THAT THE IMPUGNED ORDER OF ASSESSME NT DATED 23.12.2011 PASSED BY THE RESPONDENT WAS CONTRARY TO THE MANDATORY PROVISIONS OF SECTION 144C OF THE ACT IS DECLARED AS ONE WITHOUT JURISDICTION, NULL AND VOID AND UNEN FORCEABLE. THE HONBLE HIGH COURT OF ANDHRA PRADESH HELD AS UNDER:- IN THIS VIEW OF THE MATTER WE ARE OF THE VIEW THAT THE IMPUGNED ORDER OF ASSESSMENT DT. 23.12.2011 PASSED BY THE RESPONDENT IS CONTRARY TO THE MANDATO RY PROVISIONS OF S.144C OF THE ACT AND IS PASSED IN VIOLATION THEREOF. THEREFORE, IT IS DECLARED AS ONE WITHOUT JURISDICTION, NULL AND VOID AND UNENFORCEA BLE. CONSEQUENTLY, THE DEMAND NOTICE DATED 23.12.2011 IS SUED BY THE RESPONDENT IS SET ASIDE. 9. THE HONBLE SUPREME COURT (SUPRA) IN ACIT VS. Z UARI CEMENTS LTD. (SUPRA) HAD DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE D EPARTMENT UPON HEARING THE COUNSEL. ACCORDING TO THE LD. A.R. SHRI AKKAL DUDHWEWALA SIN CE THE SAID SPECIAL LEAVE PETITION WAS DISMISSED AFTER HEARING THE COUNSEL THE VIEW T AKEN BY THE HONBLE HIGH COURT OF ANDHRA PRADESH HAS BEEN APPROVED BY THE APEX COURT. AND THUS WE ARE OF THE VIEW THAT AO WAS BOUND TO FOLLOW THE MANDATORY PROVISION OF LAW SCRUPULOUSLY AND THEREFORE NON- FRAMING AND ISSUE OF DRAFT ASSESSMENT ORDER IS NOT CURABLE DEFECT BECAUSE IT IS A JURISDICTIONAL DEFECT WHICH CANNOT BE SUBSEQUENTLY CORRECTED BY THE LD. PCIT U/S 263 OF THE ACT, SINCE THE ASSESSMENT ORDER OF AO DATED 25.09.2 017 IS NULL IN THE EYES OF LAW. 10. IN VIEW OF THE AFORESAID DISCUSSION OF THE ISSU E WE HOLD THAT THE AOS OMISSION TO FRAME DRAFT ASSESSMENT ORDER BREACHED THE RULE OF L AW AND CONSEQUENTLY, HIS NON-ACTION TO FRAME DRAFT ASSESSMENT ORDER BEFORE PASSING THE FIN AL ASSESSMENT ORDER WAS IN CONTRAVENTION OF MANDATORY PROVISION OF LAW AS STIPULATED IN SECT ION 144C OF THE ACT, CONSEQUENTLY HIS 7 ITA NO. 416/KOL/2020 MOHAN JUTE BAGS MFG. CO., AY 2014-15 ACTION IS ARBITRARY & WHIMSICAL EXERCISE OF POWER W HICH OFFENDS ARTICLE 14 & 21 OF THE CONSTITUTION OF INDIA AND THEREFORE AN ACTION MADE WITHOUT JURISDICTION AND ERGO THE ASSESSMENT ORDER DATED 25.09.2017 IS NULL IN THE EY ES OF LAW AND THEREFORE, IS NON EST. THEREFORE, WHEN THE FOUNDATION ITSELF DOES NOT EXIS T, I.E, ASSESSMENT ORDER DATED 25.09.2017 IS NON-EST, THE LD. PCIT COULD NOT HAVE EXERCISED H IS JURISDICTION TO INTERFERE WITH VOID/NULL ORDER WHICH IS NOT EXISTING IN THE EYES OF LAW AND, THEREFORE, THE IMPUGNED ORDER OF LD PCIT IS ALSO A NULLITY. THE ASSESSEE SUCCEEDS ON THE LEG AL ISSUE. 11. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 15 TH SEPTEMBER, 2021. SD/- SD/- (MANISH BORAD) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15.09.2021 JD, SR. PS COPY OF THE ORDER FORWARDED TO: 1. APPELLANT- M/S. MOHAN JUTE BAGS MFG. CO., 16A, PALA CE COURT, 1, KYD STREET, KOLKATA. 2. RESPONDENT PCIT- 12, KOLKATA 3. ITO, WARD-35(4), KOLKATA 4. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) TRUE COPY BY ORDER ASSISTANT REGISTRAR/DDO ITAT, KOLKATA BENCHES, KOLKATA