M/s. Eaton Fluid Power Ltd., Pune V. Deputy Commissioner of Income-tax,

ITA 535/PUN/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7635 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 19-04-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 20-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Transfer pricing; International transaction; Initiation of penalty proceedings
• Section: 143(3); 10

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 535/PUN/2014 / ASSESSMENT YEAR : 2009-10 M/S. EATON FLUID POWER LTD., 145, OFF BOMBAY PUNE ROAD, PIMPRI, PNE 411 018 PAN : AAACV8426E . /APPELLANT VS. DCIT, CIRCLE-8, PUNE . / RESPONDENT ASSESSEE BY : SHRI VISHAL KALRA REVENUE BY : SHRI RAJEEV KUMAR, CIT / DATE OF HEARING : 19.04.2018 / DATE OF PRONOUNCEMENT:25.04.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS IS THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDE RS OF DRP/TPO/AO. IN THIS CASE, TPO PASSED THE ORDER U/S.92C A(3) OF THE I.T. ACT, 1961 ON 24-01-2013. SUBSEQUENTLY, AO PASSED THE DRAFT ASSESSMENT ORDER U/S.144C(1) OF THE ACT ON 26-03-2013 IN CORPORATING THE ADJUSTMENTS RECOMMENDED BY THE TPO. AS PER THE LA W, ASSESSEE APPROACHED THE DRP SEEKING DIRECTIONS AND THE DRP PASS ED AN ORDER DATED 31-12-2013. EVENTUALLY, A FINAL ASSESSMENT ORDER W AS PASSED BY THE AO ON 15-01-2014 DETERMINING THE TOTAL INCOME AT 34 ,89,59,976/- AS AGAINST THE RETURNED LOSS OF RS.9,47,21,950/-. 2. IN THE APPEAL FILED BEFORE THE ITAT, ASSESSEE RAISED 21 GROUNDS INVOLVING BOTH CORPORATE AS WELL AS TRANSFER PRICING ISSUES. FURTHER, 2 ASSESSEE ALSO FILED THE FOLLOWING ADDITIONAL GROUNDS AND THE SAME AS EXTRACTED AS UNDER : 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSMENT ORDER DATED MARCH 26, 2013 ISSUED BY THE ASSESSING OFFICER (AO) IS BAD IN LAW AND VOID AB INITIO AS THE SAME HAS BEEN PASSED IN VIOLATION OF SECTION 144C OF THE INCOME-TAX ACT, 1961 (ACT.) 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO ERRED IN VIOLATING THE PROCEDURE LAID DOWN UNDER SE CTION 144C OF THE ACT BY ISSUING NOTICE OF DEMAND AND PENALTY NOTICE UNDER SECTION 274 READ WITH SECTION 271(1)(C) OF THE ACT ALONG WITH THE ASSESSMENT ORDER DATED MARCH 26, 2013 INSTEAD OF IS SUING A DRAFT ASSESSMENT ORDER. 3. ASSESSEE RAISES THE ISSUE MENTIONING THAT THE ORDER PASSED BY THE AO U/S.144C(1) CONSTITUTES AN ASSESSMENT ORDER AS THE S AME IS FOLLOWED BY ISSUE OF THE DEMAND NOTICE U/S.156 AND PENALTY NOTICE U/S.274 R.W.S.271(1)(C) OF THE ACT. SUCH AN ASSESSMENT ORD ER IS NOT SUSTAINABLE AS THE SAME IS NOT THE PRODUCT OF THE PROPE R PROCEDURE LAID DOWN IN THE STATUTE. THESE ISSUES ARE RAISED AS ADDITION AL GROUNDS BEFORE THE TRIBUNAL. ON THE ADMISSION OF ADDITIONAL GROUNDS , ASSESSEE DEMONSTRATED THAT THE ISSUES RAISED IN THE SAID GROUNDS CONSTITUTE LEGAL IN NATURE AND THEY DO NOT CALL FOR ANY INVESTIGATION INTO T HE FACTS FOR ADJUDICATION OF THE SAME. 4. BEFORE US, AT THE VERY OUTSET ON THE ADDITIONAL GROUN D, LD. COUNSEL FOR THE SUBMITTED THAT IF ABOVE ADDITIONAL GROUNDS OF APPEAL ARE DECIDED IN FAVOUR OF ASSESSEE, THEN THE ORIGINAL GROUNDS OF APPEAL WOULD BECOME ACADEMIC. IN SUPPORT OF THE ALLOWABILITY OF ADDITION AL GROUNDS (JURISDICTIONAL ISSUE) IN FAVOUR OF THE ASSESSEE, ASSESSEE R ELIED ON THE FOLLOWING DECISIONS (PAGES 1 TO 40 OF THE PAPER BOOK) : 1. M/S. SANDVIK ASIA PVT. LTD. VS. DCIT IN ITA NO.4 67/PUN/2015, CROSS APPEAL IN ITA NO.564/PUN/2015 ALONG WITH CO NO.24/PUN/2017, RELATING TO ASSESSMENT YEAR 2010-11 , ORDER DATED 25.01.2018 3 2. WALTER TOOLS INDIA PVT. LTD. VS. ACIT IN ITA NO. 419/PUN/2014, RELATING TO ASSESSMENT YEAR 2009-10, ORDER DATED 23 .01.2018 3. SOKTAS INDIA (P.) LTD. VS. ACIT (2017) 77 TAXMAN N.COM 19 (PUNE TRIB.) 4. DCIT VS. REHAU POLYMERS (P.) LTD. (2017) 85 TAXM ANN.COM 23 (PUNE-TRIB.) FURTHER, LD. AR FOR THE ASSESSEE ALSO POINTED OUT THAT , ON SIMILAR FACTS, IN THE CASE OF SISTER CONCERN OF THE ASSESSEE E ATON INDUSTRIAL SYSTEMS PVT. LTD. IN ITA NO.536/PUN/2014, DATED 12-04-20 18 FOR A.Y. 2009-10, THE TRIBUNAL ALLOWED THE APPEAL OF THE ASSESSEE. IN THIS REGARD, LD. AR RELIED ON THE CONTENTS OF PARA 9 ONWARDS OF THE SAID ORDER OF THE TRIBUNAL. 5. ON THE ADDITIONAL GROUNDS, LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDERS OF AUTHORITIES BELOW. 6. ON HEARING BOTH THE PARTIES ON THE LEGAL ISSUE OF ADMIS SION OF ADDITIONAL GROUNDS, WE FIND THE SAID ADDITIONAL GROUNDS SHOULD BE ADMITTED AND ADJUDICATED IN THIS ORDER. FURTHER, ON THE MERITS OF THESE ADDITIONAL GROUNDS, WE FIND THE RELEVANT FACTS OF THE CASE INCLUDE THAT ASSESSEE IS A COM PANY AND IS ENGAGED IN THE MANUFACTURE AND DISTRIBUTION OF FLUID POWER E QUIPMENT SUCH AS PUMPS, GEAR PUMPS, VALVES, CYLINDERS AND RELATED COMPONENTS FOR MOBILE & INDUSTRIAL MARKETS. IN THIS CASE, A REFERENCE W AS MADE TO THE TRANSFER PRICING OFFICER (TPO) U/S. 92CA(1) OF THE ACT, WH O IN TURN, PASSED AN ORDER DATED 24-01-2013 U/S. 92CA(3) OF THE ACT, PROPOSING TOTAL ADJUSTMENTS OF RS.344,308,840/-. THE AO THEREAFTER , PASSED DRAFT ASSESSMENT ORDER DATED 26-03-2013 U/S.143(3) R.W.S. 144 C(1) OF THE ACT. LD. AR FOR THE ASSESSEE REFERRING TO THE SAID DRAFT ASSESSMENT ORDER AND POINTED OUT THAT WHILE PASSING THE SAID DRAFT ORDER, T HE AO CRYSTALLIZED THE DEMAND AT THIS STAGE ITSELF AND ISSUED NOT ICE U/S.156 OF 4 THE ACT AS WELL AS THE NOTICE U/S.274 R.W.S.271(1)(C) OF THE ACT. THE COPIES OF THESE NOTICES ARE AVAILABLE IN THE RECORDS. THE DEMAND NOTICE U/S.156 OF THE ACT WAS ISSUED TO THE ASSESSEE WITH THE TAX DEMAND OF RS.13.93 CRORES (ROUNDED OFF) FOR FURNISHING INACCURATE PART ICULARS OF INCOME. IN THE SAID DRAFT ASSESSMENT ORDER ITSELF, VIDE PAR A NO.24, THE AO CALLS IT A PROPOSED ORDER OF ASSESSMENT, AGAINST WHICH THE ASSESSEE WAS GIVEN 30 DAYS EITHER TO ACCEPT THE SAME OR FILE OBJ ECTIONS BEFORE THE DISPUTE RESOLUTION PANEL (DRP). HE FURTHER SUBMITTED THAT O BJECTIONS WERE RAISED BEFORE THE DRP ON MERITS BUT NO SUCH PRELIMINARY ISSUE WA S RAISED AND THE SAID OBJECTIONS WERE DISMISSED. THE AO THEREAFTER, PASSED ORDER U/S. 143(3) R.W.S. 144C(13) OF THE ACT, DATED 15-01-2014, WHEREIN THE SAID ADJUSTMENT ON ACCOUNT OF ARM'S LENGTH PRICE OF INTERNATIONAL TRANSACTIONS WAS MADE IN THE HANDS OF ASSES SEE. LD. AR FURTHER SUBMITTED THAT DRAFT ASSESSMENT ORDER PASSED B Y THE AO RAISING THE DEMAND NOTICE ALONG WITH NOTICE FOR INITIATION OF PENALTY PROCEEDINGS IS UNSUSTAINABLE. 7. LD. DR FOR THE REVENUE ON THE OTHER HAND RELIED ON T HE ORDERS OF THE LOWER AUTHORITIES BELOW ON THIS LEGAL ISSUE AND STATED THAT THERE IS NO MERIT IN THE PLEA OF LD. AR FOR THE ASSESSEE. 8. WE HEARD BOTH THE SIDES AND PERUSED THE ORDERS OF T HE REVENUE AND THE TRIBUNAL ORDER IN THE CASE OF M/S. EATON INDUST RIAL SYSTEMS PVT. LTD. (SUPRA). ON PERUSING THE SAME, WE FIND THE FACTS IN THE CASE OF SISTER CONCERN OF THE ASSESSEE ABOVE ARE IDENTICAL. THE T RIBUNAL DISCUSSED THE ISSUE ELABORATELY RELYING ON VARIOUS DECISIO NS AND ALLOWED THE APPEAL OF THE ASSESSEE. CONTENTS OF PARA NO.9 TO 12 ARE RELEVANT IN THIS REGARD. WE FIND THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE ARE COVERED BY THE SAID ORDER OF THE TRIBUNAL. FOR THE SAKE OF COMPLETENESS, RELEVANT FINDINGS OF THE TRIBUNAL ARE EXTRACTED HERE AS UNDER : 5 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE DO NOT REQUIRE ANY INVESTIGATION OF FACTS AND HENCE, THE SAME ARE ADMI TTED. THE ISSUE WHICH IS RAISED IN THE PRESENT APPEAL IS WHETHER THE DRAF T ASSESSMENT ORDER PASSED IN THE CASE ALONG WITH ISSUE OF DEMAND NOTIC E IS CORRECT START OF PROCEEDINGS AGAINST THE ASSESSEE. THE REQUIREMENT OF THE ACT IS THAT IN THE DRAFT ASSESSMENT ORDER PROPOSED, ADDITIONS ARE TO BE MADE AND SHOW CAUSE NOTICE IS TO BE ISSUED TO THE ASSESSEE EITHER ACCEPTING THE SAME OR TO FILE OBJECTIONS BEFORE THE DRP. HOWEVER, IN THE FACTS OF THE PRESENT CASE, THERE WAS NO PROPOSAL FOR MAKING ADDITION BUT THE FINAL ASSESSMENT ORDER WAS PASSED THOUGH THE ASSESSING OFFICER CALLS IT A DRAFT ASSESSMENT ORDER AND ALSO OBSERVED THAT THE ASSESSE E WAS AT LIBERTY TO FILE OBJECTIONS BEFORE THE DRP OR ACCEPT THE SAME. THE ASSESSING OFFICER IN THE DRAFT ASSESSMENT ORDER ITSELF CRYSTALLIZED T HE DEMAND ON INCOME ASSESSED IN THE HANDS OF ASSESSEE AND HE ALSO ISSUE D DEMAND NOTICE UNDER SECTION 156 OF THE ACT. THE ASSESSING OFFICE R FURTHER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT BY ISSUING NOTICE UNDER SECTION 274 OF THE ACT. THE CONTENTION OF LE ARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE IS THAT THOUGH THE D EMAND NOTICE WAS ISSUED BUT THE SAME WAS NOT SERVED UPON THE ASSESSE E. HOWEVER, WE FIND THAT THE ASSESSEE IN THE APPEAL MEMO ITSELF HA D ATTACHED COPY OF DEMAND NOTICE ISSUED AND HAS ALSO FILED THE SAME DU RING THE COURSE OF HEARING BEFORE US. IN ANY CASE, THE DEMAND NOTICE ISSUED IS AVAILABLE ON RECORD AND THE SAME IS ISSUED AGAINST THE ASSESSEE. HENCE, THERE IS NO MERIT IN THE PLEA OF LEARNED DEPARTMENTAL REPRESENT ATIVE FOR THE REVENUE IN THIS REGARD AND THE SAME IS DISMISSED. 10. WE FIND SIMILAR ISSUE AROSE BEFORE TRIBUNAL IN THE CASE OF DCIT VS. M/S. REHAU POLYMERS PVT. LTD. IN ITA NO.566/PUN/201 5, RELATING TO ASSESSMENT YEAR 2010-11 WITH CO NO.27/PUN/2017, ORD ER DATED 14.06.2017, WHEREIN IT WAS HELD AS UNDER:- 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORD. THE ISSUE WHICH ARISES IN THE PRESENT APPE AL IS IN RELATION TO THE DRAFT ASSESSMENT ORDER PASSED BY THE ASSESSI NG OFFICER UNDER SECTION 143(3) R.W.S. 144C(1) OF THE ACT. AF TER RECEIPT OF THE ORDER UNDER SECTION 92CA(3) OF THE ACT FROM THE TPO , THE ASSESSING OFFICER WAS SUPPOSED TO ISSUE DRAFT ASSESSMENT ORDE R PROPOSING TO MAKE THE ADDITION. HOWEVER, THE ASSESSING OFFICER CALLED THE SAID ORDER TO BE DRAFT ASSESSMENT ORDER BUT ASSESSED INC OME IN THE HANDS OF ASSESSEE AND FURTHER ISSUED DEMAND NOTICE ALONG ITNS- 150, AFTER CHARGING INTEREST UNDER SECTIONS 234A, 2 34B & 234C, ETC. HE ALSO INITIATED PENALTY PROCEEDINGS UNDER S ECTION 271(1)(C) OF THE ACT. UNDOUBTEDLY, THE ASSESSEE ON UNDERSTAN DING THAT THE SAME WAS DRAFT ASSESSMENT ORDER, MADE OBJECTIONS TO THE DRP, WHO GAVE CERTAIN DIRECTIONS AND THEREAFTER, THE ASS ESSING OFFICER PASSED AN ORDER UNDER SECTION 143(3) R.W.S. 144C(13 ) OF THE ACT. HOWEVER, IN ORDER TO ADJUDICATE THE ISSUE RAISED, W E NEED TO MAKE REFERENCE TO THE PROVISIONS OF SECTION 144C OF THE ACT. 11. WE FIND THAT SIMILAR ISSUE OF ASSESSMENT TO BE FRAMED UNDER SECTION 143(3) R.W.S. 144C OF THE ACT AROSE B EFORE THE PUNE BENCH OF TRIBUNAL IN SOKTAS INDIA (P) LTD. VS. ACIT (SUPRA). 12. THE TRIBUNAL AFTER NOTING THE FACTS THAT THE AS SESSING OFFICER HAD PASSED THE ORDER UNDER SECTION 143(3) R .W.S 92CA(3) AND 144C OF THE ACT AND HAD ALSO ISSUED DEMAND NOTI CE UNDER SECTION 156 OF THE ACT AND HAD ALSO ISSUED NOTICE U NDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT. HOWEVER, THE COVE RING LETTER SAID THAT IT WAS DRAFT ASSESSMENT ORDER, AGAINST WHICH T HE ASSESSEE WAS EITHER TO FILE OBJECTIONS BEFORE THE DRP OR ACC EPT THE SAME. THE ASSESSEE FILED THE OBJECTIONS BEFORE THE DRP, W HO DISMISSED 6 THE SAME ON THE SURMISE THAT THE ORDER PASSED BY TH E ASSESSING OFFICER WAS FINAL ASSESSMENT ORDER, SINCE THE ASSES SING OFFICER HAD ALSO ISSUED THE DEMAND NOTICE AND HAD ALSO ISSU ED SHOW CAUSE NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT FOR LEVY OF PENALTY. IN VIEW OF THE SAID FACTS, THE TRIBUNAL O BSERVED AS UNDER:- 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. BRIEFLY, IN THE FACTS OF THE CASE, THE ASS ESSING OFFICER HAD MADE REFERENCE TO THE TPO VIS--VIS TO DETERMINE TH E ARM'S LENGTH PRICE OF INTERNATIONAL TRANSACTION ENTERED INTO BY THE ASSESSEE WITH ITS ASSOCIATE ENTERPRISES. THE TPO VIDE ORDER DATE D 28.01.2014 UNDER SECTION 92CA(3) OF THE ACT HAD PROPOSED THE A DJUSTMENT TO ARM'S LENGTH PRICE OF INTERNATIONAL TRANSACTION AND HAD PASSED THE SAID ORDER. THE ASSESSING OFFICER ON RECEIPT OF SA ID ORDER PASSED ORDER UNDER SECTION 143(3) R.W.S. 92C(4) AND 144C O F THE ACT. THE SAID ORDER OF ASSESSING OFFICER WAS FORWARDED TO TH E ASSESSEE ALONG WITH LETTER DATED 28.02.2014, WHEREIN THE ASS ESSING OFFICER CATEGORICALLY SAID THAT THE DRAFT ASSESSMENT ORDER WAS BEING FORWARDED FOR NECESSARY ACTION AT THE END OF ASSESS EE. IT WAS CLEARLY MENTIONED IN THE SAID LETTER THAT ON RECEIP T OF DRAFT ORDER, THE ASSESSEE MAY WITHIN 30 DAYS OF THE RECEIPT OF D RAFT ORDER EITHER FILE ACCEPTANCE OF VARIATION AS PROPOSED IN THE ORDER OR FILE OBJECTIONS TO THE VARIATION TO THE DRP OR TO THE UN DERSIGNED. HOWEVER, THE ASSESSING OFFICER ALSO ISSUED DEMAND N OTICE UNDER SECTION 156 OF THE ACT DATED 28.02.2014 AND ALSO IS SUED NOTICE UNDER SECTION 274 R.W.S. 271 OF THE ACT. THE ASSES SEE ON UNDERSTANDING THAT IT WAS DRAFT ASSESSMENT ORDER FI LED OBJECTIONS BEFORE THE DRP ON 07.04.2014 I.E. WITHIN THE TIME A LLOWED UNDER THE STATUTE. HOWEVER, THE SAID OBJECTIONS OF ASSES SEE WERE NOT CONSIDERED BY THE DRP AND THE SAME WERE REJECTED ON THE SURMISE THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS FINAL ASSESSMENT ORDER SINCE THE ASSESSING OFFICER HAD AL SO ISSUED DEMAND NOTICE UNDER SECTION 156 OF THE ACT AND SHOW CAUSE NOTICE UNDER SECTION 274 R.W.S. 271 OF THE ACT FOR LEVY OF PENALTY. THE DRP OBSERVED THAT SINCE THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS FINAL ASSESSMENT ORDER, IT DI D NOT HAVE ANY JURISDICTION TO ISSUE ANY DIRECTIONS ON SUCH FINAL ASSESSMENT ORDER. AFTER RECEIVING THE DRPS ORDER, THE ASSESSEE FILED AN APPLICATION BEFORE THE ASSESSING OFFICER FOR NECESSARY ACTION. THE ASSESSING OFFICER IN REPLY, VIDE LETTER DATED 30.01.2015 STAT ED THAT THE DRP HAD CLEARLY MENTIONED THAT THE ORDER PASSED ON 28.0 2.2014 WAS FINAL ORDER AND NOT DRAFT ORDER, SO THE ASSESSING O FFICER DOES NOT HAVE ANY JURISDICTION OVER THE CASE. 7. IN ORDER TO ADJUDICATE THE ISSUE, REFERENCE NEED S TO BE MADE TO THE PROVISIONS OF SECTION 144C OF THE ACT. UNDE R THE PROVISIONS OF SECTION 144C OF THE ACT, IT IS PROVIDED THAT WHE RE THE ASSESSING OFFICER PROPOSES TO MAKE, ON OR AFTER 01.10.2009, A NY VARIATION IN THE INCOME OR LOSS RETURNED, WHICH IS PREJUDICIAL T O THE INTEREST OF ASSESSEE, THEN THE ASSESSING OFFICER SHALL IN THE F IRST INSTANCE FORWARD THE DRAFT OF THE PROPOSED ORDER OF ASSESSME NT TO THE ELIGIBLE ASSESSEE. UNDER SUB-SECTION (2) OF SECTIO N 144C OF THE ACT ON RECEIPT OF THE DRAFT ORDER, THE ELIGIBLE ASSESSE E SHALL WITHIN 30 DAYS OF THE RECEIPT, FILE HIS ACCEPTANCE OF THE VAR IATION TO THE ASSESSING OFFICER OR FILE HIS OBJECTIONS, IF ANY, T O SUCH VARIATION WITH THE DISPUTE RESOLUTION PANEL AND THE ASSESSING OFFICER. UNDER SUB-SECTION (3) OF SECTION 144C OF THE ACT, T HE ASSESSING OFFICER SHALL COMPLETE THE ASSESSMENT ON THE BASIS OF DRAFT ORDER IF THE ASSESSEE INTIMATES TO THE ASSESSING OFFICER THE ACCEPTANCE OF THE VARIATION OR NO OBJECTIONS ARE RECEIVED WITHIN PERIOD SPECIFIED IN SUB-SECTION (2) OF SECTION 144C OF THE ACT. THE REAFTER, THE ASSESSING OFFICER IS EMPOWERED TO PASS THE ASSESSME NT ORDER WITHIN ONE MONTH FROM THE END OF MONTH, IN WHICH TH E ACCEPTANCE 7 IS RECEIVED OR THE PERIOD OF FILING OBJECTIONS UNDE R 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 RE SOLUTION PANEL SHALL IN CASE WHERE OBJECTION IS RECEIVED UNDER SUB -SECTION (2) ISSUE SUCH DIRECTIONS AS IT THINKS FIT FOR THE GUID ANCE OF THE ASSESSING OFFICER TO ENABLE HIM TO COMPLETE THE ASS ESSMENT. UPON RECEIPT OF THE SAID DIRECTIONS, THE ASSESSING OFFIC ER SHALL IN CONFORMITY WITH THE SAME, COMPLETE THE ASSESSMENT W ITHOUT PROVIDING ANY FURTHER OPPORTUNITY 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 VIEW OF THE PROVISI ONS OF SECTION 144C OF THE ACT IMPLIEDLY WHERE THE TPO PROPOSES AN Y VARIATION IN THE INCOME OR LOSS RETURNED BY THE ASSESSEE, WHICH IS PREJUDICIAL TO THE INTEREST OF ASSESSEE, THE ASSESSING OFFICER SHA LL IN THE FIRST INSTANCE FORWARD THE DRAFT OF THE PROPOSED ASSESSME NT ORDER TO THE ASSESSEE AND THEREAFTER, IF NO OBJECTIONS ARE RECEI VED AND / OR THE ASSESSEE FILES HIS ACCEPTANCE TO THE VARIATION TO T HE ASSESSING OFFICER, THEN THE ASSESSING OFFICER IS EMPOWERED TO COMPLETE THE ASSESSMENT WITHIN ONE MONTH FROM THE END OF THE MON TH THEREOF. IN CASE, THE ASSESSEE FILES HIS OBJECTION BEFORE TH E DRP AND WHERE THE SAID PANEL ISSUES DIRECTIONS AS IT THINKS FIT, THEN THE ASSESSING OFFICER ON RECEIPT OF SUCH DIRECTIONS SHALL COMPLET E THE ASSESSMENT IN CONFORMITY WITH SUCH DIRECTIONS. IN VIEW OF THE SAID PROVISIONS OF THE ACT, THE COMPLIANCE TO SECTION 144C OF THE A CT IS MANDATORY IN ALL SUCH CASES, WHERE THE TPO PROPOSES VARIATION IN THE INCOME OR LOSS RETURNED, WHICH IS PREJUDICIAL TO THE INTER ESTS OF ASSESSEE. ONLY AFTER COMPLYING WITH THE CONDITIONS LAID DOWN IN SECTION 144C OF THE ACT, THE ASSESSING OFFICER IS EMPOWERED TO PASS THE ORDER UNDER SECTION 143(3) R.W.S. 144C OF THE ACT C OMPLETING THE ASSESSMENT ON SUCH ENHANCED INCOME OR VARIATION IN THE LOSS RETURNED BY THE ASSESSEE. 8. THE HONBLE MADRAS HIGH COURT IN THE CASE OF VIJ AY TELEVISION WRIT PETITION NOS.1526 AND 1527 OF 2014 & M.P. NOS.1 AND 1 OF 2014, IT WAS HELD THAT NON-PASSING OF DRAF T ASSESSMENT ORDER AFTER ADJUSTMENT MADE BY THE TPO RENDERS PROC EEDINGS NULL & VOID BY OBSERVING AS UNDER:- UNDER SECTION 144C(1) OF THE ACT, WITH EFFECT FROM 1 ST OCTOBER 2009, THE ASSESSING OFFICER HAS TO MANDATOR ILY ISSUE A DRAFT ASSESSMENT ORDER IF THERE IS A PROPOS ED VARIATION TO THE RETURN WHICH ARE PREJUDICIAL TO TH E ELIGIBLE ASSESSEE. THE FACT THAT THE PETITIONER IS AN ELIGI BLE ASSESSEE IS NOT IN DISPUTE. WHILE SO, UNDER SECTIO N 144C(2) OF THE ACT, THE ELIGIBLE ASSESSEE HAS THE OPTION, E ITHER TO ACCEPT THE VARIATION OR TO FILE THEIR OBJECTIONS BE FORE THE DRP AND SUCH OPTION HAS TO BE EXERCISED WITHIN 30 DAYS. ON SUCH OBJECTIONS FILED BY THE ASSESSEE, THE DRP SHAL L ISSUE APPROPRIATE DIRECTION FOR THE GUIDANCE OF THE ASSES SING OFFICER UNDER SECTION 144C(5) OF THE ACT. IT IS ON LY THEREAFTER, THE AO IS BOUND TO PASS A FINAL ORDER O F ASSESSMENT IN COMPLIANCE WITH THE DIRECTIONS ISSUED BY THE DRP UNDER SECTION 144C(3) OF THE ACT. IN THE PRESE NT CASE, WITHOUT FOLLOWING THE ABOVE MANDATORY PROCEDURE, TH E AO HAS PASSED THE ORDER OF ASSESSMENT ON 26.03.2013 AN D SUBSEQUENTLY ISSUED A CORRIGENDUM ON 15.04.2014 TO RECTIFY THE MISTAKE COMMITTED IN PASSING THE FINAL ORDER OF ASSESSMENT INTER ALIA TO TREAT IT AS A DRAFT ASSESS MENT 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 THAT THE ASSESSING 8 OFFICER HAS SIGNED THE ORDER OF ASSESSMENT AND ALSO ASSESSED THE AMOUNT PAYABLE BY THE ASSESSEE HAS BEC OME COMPLETE AND IT CANNOT BE SIMPLY TREATED AS A DRAFT ASSESSMENT ORDER OR IT CAN BE RECTIFIED BY ISSUING THE CORRIGENDUM. IN FACT, PURSUANT TO THE ORDER OF ASS ESSMENT UNDER SECTION 143C, DEMAND WAS ALSO MADE FOR PAYMEN T OF THE AMOUNT AND SUCH DEMAND HAS NOT BEEN WITHDRAWN B Y THE SECOND RESPONDENT EVEN AFTER ISSUING THE CORRIG ENDUM. EVEN AS PER THE WEBSITE OF THE DEPARTMENT, THE DEMA ND MADE TO THE PETITIONER COMPANY CONTINUES TILL DATE AND THEREFORE, THE FINAL ORDER AS WELL AS THE CORRIGEND UM ISSUED BY THE SECOND RESPONDENT ARE VITIATED BY ERRORS APP ARENT ON THE FACE OF THE RECORD AND THEY ARE LEGALLY NOT SUS TAINABLE. 9. THE SIMILAR ISSUE HAD ARISEN BEFORE THE PUNE BEN CH OF TRIBUNAL IN AGFA INDIA PVT. LTD. VS. ACIT IN ITA NO S.341/PN/2014 AND 1072/PN/2014, RELATING TO ASSESSMENT YEAR 2008- 09, ORDER DATED 28.10.2015 AND REFERENCE WAS MADE TO THE DECI SION OF THE HONBLE HIGH COURT OF ANDHRA PRADESH AT HYDERABAD I N M/S. ZUARI CEMENTS LTD. VS. ACIT IN WP NO.5557/2012, VIDE JUDG MENT DATED 21.02.2013 AND THE HONBLE SUPREME COURT IN ACIT VS . M/S. ZUARI CEMENT LTD. VIDE SPECIAL LEAVE PETITION CC NO.16694 /2013, JUDGMENT DATED 27.09.2013 AND IT WAS HELD AS UNDER: - 20. THE HONBLE HIGH COURT OF ANDHRA PRADESH AT HYDERABAD IN M/S. ZUARI CEMENTS LTD. VS. ACIT (SUPR A) ON SIMILAR ISSUE WHERE AFTER RECEIPT OF THE ORDER PASS ED BY THE TPO UNDER SECTION 92CA(3) OF THE ACT, THE ASSESSING OFFICER HAD PASSED THE ASSESSMENT ORDER UNDER SECTION 143(3 ) OF THE ACT RAISING A DEMAND OF RS.27,40,71,913/- WITHO UT GIVING AN OPPORTUNITY 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 TH E INCOME OR LOSS RETURNED BY THE ASSESSEE, THEN NOTWITHSTAND ING TO THE CONTRARY CONTAINED IN THE ACT, HE SHALL FIRST P ASS THE DRAFT ASSESSMENT ORDER, FORWARD THE SAME TO THE ASS ESSEE AND AFTER ASSESSEE FILES HIS OBJECTIONS, IF ANY, TH E ASSESSING OFFICER SHALL COMPLETE THE ASSESSMENT WITHIN ONE MO NTH, IN VIEW OF THE PROVISIONS OF SECTION 144C OF THE ACT. IT WAS FURTHER OBSERVED THAT THE ASSESSEE IS ALSO GIVEN AN OPTION TO FILE AN OBJECTION BEFORE THE DRP, IN WHICH THE LATT ER CAN ISSUE DIRECTIONS FOR THE GUIDANCE OF ASSESSING OFFI CER TO ENABLE HIM TO COMPLETE ASSESSMENT. WHERE THE ASSES SING 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 HI GH COURT OF A.P THAT THE IMPUGNED ORDER OF ASSESSMENT WAS CLEARLY CONTRARY TO SECTION 144C OF 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 SHAL L NOT APPLY FOR THE ASSESSMENT YEAR 2008-09 AND WOULD ONLY APPL Y FROM ASSESSMENT YEAR 2010-11 AND LATER YEARS WAS HE LD TO BE NOT TENABLE WHERE THE LANGUAGE OF SUB-SECTION (1 ) OF SECTION 144C OF THE ACT REFERRED TO THE CUTOFF DATE OF 01.10.2009 INDICATES THE INTENTION OF LEGISLATURE T O MAKE IT APPLICABLE. THE HONBLE HIGH COURT OF A.P FURTHER HELD THAT THE CIRCULAR NO.5/2010 ISSUED BY THE CBDT STATING T HAT SECTION 144C(1) OF THE ACT WOULD APPLY ONLY FROM ASSESSMENT YEAR 2010-11 AND SUBSEQUENT YEARS AND NO T FROM ASSESSMENT YEAR 2008-09 WAS CONTRARY TO THE EXPRESSED LANGUAGE OF THE SECTION AND THE SAID VIEW OF THE REVENUE WAS HELD TO BE NOT ACCEPTABLE. THE HONBLE HIGH 9 COURT OF A.P THEREAFTER HELD THAT THE IMPUGNED ORDE R OF ASSESSMENT DATED 23.12.2011 PASSED BY THE RESPONDENT WAS CONTRARY TO THE MANDATORY PROVISIONS OF SECTION 144C OF THE ACT IS DECLARED AS ONE WITHO UT JURISDICTION, NULL AND VOID AND UNENFORCEABLE. T HE 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 MANDATORY PROVISIONS OF S.144C OF THE ACT AND IS PASSED IN VIOLATION THEREOF. THEREFORE, IT IS DECL ARED AS ONE WITHOUT JURISDICTION, NULL AND VOID AND UNENFORCEABLE. CONSEQUENTLY, THE DEMAND NOTICE DATED 23.12.2011 ISSUED BY THE RESPONDENT IS SET ASIDE. 21. THE HONBLE SUPREME COURT (SUPRA) IN ACIT VS. Z UARI CEMENTS LTD. (SUPRA) HAD DISMISSED THE SPECIAL LEAV E PETITION FILED BY THE DEPARTMENT UPON HEARING THE C OUNSEL. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSES SEE CONTENDED THAT SINCE THE SAID SPECIAL LEAVE PETITIO N WAS DISMISSED AFTER HEARING THE COUNSEL AND THE VIEW TA KEN BY THE HONBLE HIGH COURT OF ANDHRA PRADESH AT HYDERAB AD HAS BEEN APPROVED BY THE APEX COURT AND ANY ORDER CONTRADICTING THE CONDITIONS LAID DOWN IN SECTION 1 44C OF THE ACT IS NULL AND VOID AND UNENFORCEABLE IN LAW. 22. FURTHER, THE DELHI BENCH OF TRIBUNAL IN THE CAS E OF CAPSUGEL HEALTHCARE LIMITED IN ITA NO.1356/DEL/2012 , VIDE ORDER DATED 30.09.2014 HAVE UPHELD THE SIMILAR VIEW THAT FAILURE TO PASS DRAFT ASSESSMENT ORDER AFTER TPOS ORDER RENDERS PROCEEDINGS VOID. SHOW CAUSE NOTICE CANNOT BE QUOTED WITH DRAFT ASSESSMENT ORDER. 10. FURTHER, THE HONBLE BOMBAY HIGH COURT IN INTER NATIONAL AIR TRANSPORT ASSOCIATION VS. DCIT (SUPRA) HAVE ALSO DO WN THE SIMILAR PROPOSITION AND HELD AS UNDER:- 4. THE PETITIONER HAD CONSEQUENT TO THE ASSESSMENT ORDER DATED 23 RD MARCH 2015 FILED ITS OBJECTION IN TERMS OF SECTION 144C(2) OF THE ACT TO THE DISPUTE RESOLUTIO N PANEL (DRP). BY AN ORDER DATED 7 TH OCTOBER, 2015, THE DRP REFUSED TO PASS ANY DIRECTION ON THE OBJECTIONS BEC AUSE THE OBJECTIONS HAD BEEN FILED IN RESPECT OF A FINAL ORD ER UNDER SECTION 143(3) OF THE ACT AND NOT IN RESPECT OF THE DRAFT ASSESSMENT ORDER PASSED UNDER SECTION 144C(1) OF TH E ACT. THE ORDER DATED 7 TH OCTOBER, 2015 OF THE DRP HOLDS THAT ITS JURISDICTION IS ONLY TO ENTERTAIN OBJECTIONS WITH R EGARD TO DRAFT ASSESSMENT ORDER PASSED UNDER SECTION 144C(1) OF THE ACT. 5. HOWEVER, IT IS PERTINENT TO NOTE THAT THE ORDER DATED 7 TH OCTOBER, 2015 OF THE DRP IN PARAGRAPH (3) THEREOF RECORDS THAT THERE IS NO DISPUTE THAT THE ASSESSEE IS A FOREIGN COMPANY. THIS POSITION IS UNDISPUTED EVEN BEFORE US. THEREFORE, IN VIEW OF SECTION 144C(15) OF THE ACT WHICH DEFINES ELIGIBLE ASSESSEE TO WHOM SECTION 144C(1) O F THE ACT APPLIES TO INTER ALIA MEAN ANY FOREIGN COMPANY. THEREFORE, A DRAFT ASSESSMENT ORDER UNDER SECTION 1 44C(1) OF THE ACT IS MANDATED BEFORE THE ASSESSING OFFICER PASSES A FINAL ORDER UNDER SECTION 143(3) OF THE ACT IN CA SE OF ELIGIBLE ASSESSEE. AN DRAFT ASSESSMENT ORDER PASSE D UNDER 10 SECTION 144C(1) OF THE ACT BESTOWS CERTAIN RIGHTS U PON 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 ASSESSEES GRIEVANCE CAN BE ADDRESSED BEFORE A FINAL ASSESSMENT ORDER IS PASSED AND APPELLATE PROCEEDINGS INVOKED BY IT. HOWEVER, THES E SPECIAL RIGHTS MADE AVAILABLE TO ELIGIBLE ASSESSEE UNDER SECTION 144C OF THE ACT ARE RENDERED FUTILE, IF DIR ECTLY A FINAL ORDER UNDER SECTION 143(3) OF THE ACT IS PASSED WIT HOUT BEING PRECEDED BY DRAFT ASSESSMENT ORDER. 6. IN THE ABOVE VIEW, THE ASSESSMENT ORDER DATED 23 RD MARCH, 2015 PASSED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2012-13 IS COMPLETELY WITHOUT JURIS DICTION. THIS IS SO AS IT HAS NOT BEEN PRECEDED BY A DRAFT ASSESSMENT ORDER. HENCE, THE FOUNDATIONAL/BASIC OR DER VIZ. THE ASSESSMENT ORDER DATED 23 RD MARCH, 2015 IS SET ASIDE AND QUASHED AS BEING WITHOUT JURISDICTION. CONSEQU ENT ORDERS PASSED ON RECTIFICATION APPLICATION AS WELL AS ON PENALTY ARE ALSO QUASHED AND SET ASIDE BEING UNSUSTAINABLE. 11. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE A SSESSEE HAS PLACED RELIANCE ON THE RATIO LAID DOWN BY THE INTER NATIONAL AIR TRANSPORT ASSOCIATION VS. DCIT (SUPRA) AND THE HON BLE MADRAS HIGH COURT IN THE CASE OF VIJAY TELEVISION WRIT PET ITION NOS.1526 AND 1527 OF 2014 & M.P. NOS.1 AND 1 OF 2014 VIS--V IS. WHEREAS THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE STRONGLY OPPOSED AND POINTED OUT THAT THE ASSESSING OFFICER HAS SENT THE DRAFT ASSESSMENT ORDER WHEREIN THE LETTER CLEARLY S AYS THAT IT IS DRAFT ASSESSMENT ORDER. HE POINTED OUT THAT THE DR P HAD MIS- INTERPRETED AND THE ISSUE MAY BE SENT BACK TO THE F ILE OF DRP. HE ALSO POINTED OUT THAT THE FACTS BEFORE THE HONBLE BOMBAY HIGH COURT WERE DIFFERENT AND THE SAID PROPOSITION IS NO T APPLICABLE. WE FIND NO MERIT IN THE PLEA OF LEARNED DEPARTMENTAL RE PRESENTATIVE FOR THE REVENUE. THE ASSESSING OFFICER PASSED THE ORDER ON 28.02.2014 ALONG WITH WHICH IT ALSO ISSUED THE DEMA ND NOTICE AND SHOW CAUSE NOTICE FOR LEVY OF PENALTY. IN OTHER WO RDS, THE ASSESSING OFFICER HAS CRYSTALLIZED THE DEMAND IN TH E CASE OF ASSESSEE. WHEREAS, AS PER THE PROVISIONS OF THE AC T WHERE THE ASSESSING OFFICER PROPOSES TO VARY THE INCOME IN TH E HANDS OF ASSESSEE, THERE WAS REQUIREMENT TO ISSUE SHOW CAUSE NOTICE TO THE ASSESSEE TO THE SAID ADDITIONS, BY WAY OF DRAFT ASS ESSMENT ORDER. THE DEMAND DOES NOT GET CRYSTALLIZED IN DRAFT ASSES SMENT ORDER. UNDOUBTEDLY, THE ASSESSING OFFICER HAD ISSUED COVER ING LETTER WHERE IT SAYS THAT IT IS DRAFT ASSESSMENT ORDER BUT IN SPIRIT, IT HAD FINALIZED THE ASSESSMENT, WHEREIN THE DEMAND WAS CR YSTALLIZED AND DEMAND NOTICE WAS ISSUED TO THE ASSESSEE. THE ASSESSING OFFICER HAS NOT FOLLOWED THE CORRECT PROCEDURE AS P ROVIDED IN THE STATUTE AND HAS PASSED FINAL ASSESSMENT ORDER WITHO UT PASSING DRAFT ASSESSMENT ORDER WHICH IS AGAINST THE PROVISI ONS OF THE ACT AND HENCE, THE SAME IS INVALID IN LAW. RELIANCE IS PLACED ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN INTERNATIONAL AIR TRANSPORT ASSOCIATION VS. DCIT (SUPRA) AND THE HONBLE MADRAS HIGH COURT IN VIJAY TELEVISION PVT. LTD. VS. DRP & OTHERS (SUPRA) AND THE HONBLE HIGH COURT OF ANDHRA PRADES H IN M/S. ZUARI CEMENTS LTD. VS. ACIT (SUPRA). WE HOLD THAT THE ASSESSMENT ORDER PASSED IN THE CASE IS INVALID AND THE SAME IS SET ASIDE. SINCE WE HAVE DECIDED THE PRELIMINARY ISSUE IN FAVOU R OF ASSESSEE, THE OTHER GROUNDS OF APPEAL AGAINST THE A DDITIONS MADE BECOME ACADEMIC AND THE SAME ARE DISMISSED. 11 13. THE FACTS BEFORE US ARE SIMILAR TO THE FACTS BE FORE THE TRIBUNAL IN SOKTAS INDIA (P) LTD. VS. ACIT (SUPRA). IN THE FACTS OF PRESENT CASE ALSO, THE DEMAND GOT CRYSTALLIZED ON P ASSING OF THE DRAFT ASSESSMENT ORDER, WHEREIN THE ASSESSING OFFIC ER HAD ISSUED DEMAND NOTICE IN ITNS-150 AND HAD ALSO INITIATED PE NALTY PROCEEDINGS. UNDOUBTEDLY, THE SAID ASSESSMENT WAS FRAMED AS DRAFT ASSESSMENT BUT IN ACTUAL FACT, THE ASSESSING OFFICER HAD MADE THE ASSESSMENT IN THE HANDS OF ASSESSEE BY NOT ONLY ASSESSING THE INCOME BUT ALSO DETERMINING THE DEMAN D PAYABLE. IN THE CASE OF DRAFT ASSESSMENT ORDER, PROPOSED ADD ITIONS ARE TO BE MADE AND THE ASSESSEE IS SHOW CAUSED EITHER TO A CCEPT THE SAME OR FILE THE OBJECTIONS BEFORE THE DRP. HOWEVE R, IN THE PRESENT FACTS, THERE WAS NOT A PROPOSAL FOR MAKING ADDITION BUT FINAL ASSESSMENT ORDER WAS PASSED. UNDOUBTEDLY, TH E ASSESSING OFFICER SAID THAT HE IS PASSING DRAFT ASSESSMENT OR DER AND THE ASSESSEE WAS ALSO AT LIBERTY TO FILE THE OBJECTIONS BEFORE THE DRP OR ACCEPT THE SAME, BUT IN ACTUAL FACT, THE ORDER PASS ED BY THE ASSESSING OFFICER WAS COMPLETE ASSESSMENT ORDER WHI CH IS NOT ENVISAGED UNDER SECTION 143(3) R.W.S. 144C OF THE A CT. ACCORDINGLY, WE HOLD THAT DRAFT ASSESSMENT ORDER PA SSED IN THE CASE IS INVALID IN LAW. 11. WE FURTHER FIND THAT THE HONBLE HIGH COURT OF DELHI IN JCB INDIA LTD. VS. DCIT (2017) 85 TAXMANN.COM 155 (DEL) HAS L AID DOWN THAT EVEN IN REMAND PROCEEDINGS THE ASSESSING OFFICER CANNOT STRAIGHTAWAY PASS FINAL ASSESSMENT ORDER WITHOUT ISSUING DRAFT ASSESS MENT ORDER UNDER SECTION 144C OF THE ACT. THE HONBLE HIGH COURT DI D NOT ACCEPT THE STAND OF REVENUE THAT IT WAS AN IRREGULARITY WHICH WAS CU RABLE UNDER SECTION 292B OF THE ACT. RELYING ON EARLIER DECISION OF TH E SAID HIGH COURT, IT WAS OBSERVED THAT SECTION 292B OF THE ACT COULD NOT SAV E AN ORDER NOT PASSED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT, WHERE THE ISSUE INVOLVED WAS NOT ABOUT THE MISTAKE IN THE SAID ORDER BUT THE POWER OF ASSESSING OFFICER TO PASS THE ORDER. FURTHER, REFERENCE WAS MADE TO THE DECISION OF SAID HIGH COURT ITSELF IN TURNER INTERNATIONAL INDI A (P.) LTD. VS. DCIT (2017) 82 TAXMANN.COM 125 (DEL), WHEREIN IT WAS HELD THAT IT WAS MANDATORY FOR THE ASSESSING OFFICER TO PASS DRAFT A SSESSMENT ORDER UNDER SECTION 144C OF THE ACT PRIOR TO ISSUIN G FINAL ASSESSMENT ORDER. THE RELEVANT FINDINGS OF THE HONBLE HIGH COURT A RE IN PARA 21 WHICH READS AS UNDER:- 21. IN ALMOST IDENTICAL FACTS, IN TURNER INTERNATI ONAL (SUPRA), THIS COURT HELD IN FAVOUR OF THE ASSESSEE ON THE GROUND THAT IT WAS MANDATORY FOR THE AO TO HAVE PASSED A DRAFT ASSESSM ENT ORDER UNDER SECTION 144C OF THE ACT PRIOR TO ISSUING THE FINAL ASSESSMENT ORDER. THE FOLLOWING PASSAGES FROM SAID DECISION AR E RELEVANT FOR THE PRESENT PURPOSES: '11. THE QUESTION WHETHER THE FINAL ASSESSMENT ORDER STA NDS VITIATED FOR FAILURE TO ADHERE TO THE MANDATORY REQUIREMENTS OF FIRST PASSING DRAFT ASSESSMENT ORDE R IN TERMS OF SECTION 144C(1) OF THE ACT IS NO LONGER RE S INTREGRA. THERE IS A LONG SERIES OF DECISIONS TO WHICH REFERE NCE WOULD BE MADE PRESENTLY. 12. IN ZUARI CEMENT LTD. V. ACIT (DECISION DATED 21 ST FEBRUARY, 2013 IN WP(C) NO.5557/2012), THE DIVISION BENCH (DB ) OF THE ANDHRA PRADESH HIGH COURT CATEGORICALLY HELD THAT T HE FAILURE TO PASS A DRAFT ASSESSMENT ORDER UNDER SECTION 144C (1 ) OF THE ACT WOULD RESULT IN RENDERING THE FINAL ASSESSMENT ORDE R 'WITHOUT JURISDICTION, NULL AND VOID AND UNENFORCEABLE.' IN THAT CASE, THE CONSEQUENT DEMAND NOTICE WAS ALSO SET ASIDE. THE DE CISION OF THE ANDHRA PRADESH HIGH COURT WAS AFFIRMED BY THE SUPRE ME COURT 12 BY THE DISMISSAL OF THE REVENUE'S SLP (C) [CC NO. 1 6694/2013] ON 27TH SEPTEMBER, 2013. 13. IN VIJAY TELEVISION (P) LTD. V. DISPUTE RESOLUT ION PANEL [2014] 369 ITR 113 (MAD.), A SIMILAR QUESTION AROSE. THERE , THE REVENUE SOUGHT TO RECTIFY A MISTAKE BY ISSUING A CORRIGENDU M AFTER THE FINAL ASSESSMENT ORDER WAS PASSED. CONSEQUENTLY, NOT ONLY THE FINAL ASSESSMENT ORDER BUT ALSO THE CORRIGENDUM ISSUED TH EREAFTER WAS CHALLENGED. FOLLOWING THE DECISION OF THE ANDHRA PR ADESH HIGH COURT IN ZUARI CEMENT LTD. V. ACIT (SUPRA) AND A NU MBER OF OTHER DECISIONS, THE MADRAS HIGH COURT IN VIJAY TELEVISIO N (P) LTD. V. DISPUTE RESOLUTION PANEL (SUPRA) QUASHED THE FINAL ORDER OF THE AO AND THE DEMAND NOTICE. INTERESTINGLY, EVEN AS REGAR DS THE CORRIGENDUM ISSUED, THE MADRAS HIGH COURT HELD THAT IT WAS BEYOND THE TIME PERMISSIBLE FOR ISSUANCE OF SUCH CO RRIGENDUM AND, THEREFORE, IT COULD NOT BE SUSTAINED IN LAW. 14. RECENTLY, THIS COURT IN ESPN STAR SPORTS MAURIT IUS S.N.C. ET COMPAGNIE V. UNION OF INDIA [2016] 388 ITR 383 (DEL .), FOLLOWING THE DECISION OF THE ANDHRA PRADESH HIGH COURT IN ZU ARI CEMENT LTD. V. ACIT (SUPRA), THE MADRAS HIGH COURT IN VIJA Y TELEVISION (P) LTD. V. DISPUTE RESOLUTION PANEL, CHENNAI (SUPRA) A S WELL AS THE BOMBAY HIGH COURT IN INTERNATIONAL AIR TRANSPORT AS SOCIATION V. DCIT (2016) 290 CTR (BOM) 46, CAME TO THE SAME CONC LUSION.' 12. APPLYING THE SAID RATIO TO THE FACTS OF THE PRE SENT CASE AND ALSO THE ISSUE ARISING BEFORE US BEING IDENTICAL TO THE ISSU E BEFORE TRIBUNAL IN DCIT VS. M/S. REHAU POLYMERS PVT. LTD. (SUPRA) AND IN M/ S. SANDVIK ASIA PVT. LTD. VS. DCIT (SUPRA), WE HOLD THAT THE DRAFT ASSES SMENT ORDER PASSED BY THE ASSESSING OFFICER WAS COMPLETE ASSESSMENT ORDER WHICH IS NOT ENVISAGED UNDER SECTION 143(3) R.W.S. 144C OF THE A CT. ACCORDINGLY, WE HOLD THAT THE DRAFT ASSESSMENT ORDER PASSED IN THE CASE IS INVALID IN LAW AND HENCE THE CONSEQUENT ORDER PASSED DOES N OT SURVIVE. IN VIEW OF OUR DECIDING THE JURISDICTIONAL ISSUE IN FA VOUR OF ASSESSEE, WE DO NOT ADDRESS THE ISSUES ON MERITS. THE ADDITIONAL G ROUNDS OF APPEAL NO.1 AND 2 RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 9. THE UNDISPUTED FACTS IN THIS CASE INCLUDE THAT THE AO ISSUED NOTICE OF DEMAND U/S.156 OF THE ACT AS WELL AS ISSUE OF NOT ICE U/S.274 R.W.S. 271(1)(C) OF THE ACT AT THE STAGE OF MAKING DRAFT ASS ESSMENT ORDER AS PER THE PROVISIONS OF SECTION 144C(1) OF THE ACT. NORMA LLY, SUCH NOTICES ARE ISSUED AT THE END OF THE ASSESSMENT PROCEE DINGS AND AT THE TIME OF MAKING ASSESSMENT ORDER. THE FACT THAT DEMAND IS RAISED IS EVIDENT ON THE FACT OF DRAFT ASSESSMENT ORDER WHICH BEAR S THE ENTRY OF THE DEMAND IN THE REGISTER OF DEMAND COLLECTION AND BALANC E (DCR 02/45, DATED 20-2-13). THE NOTICE U/S.274 OF THE ACT IS FO UND ISSUED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. ON LAW, IT IS SETTLED LEGAL PROPOSITION AT THE LEVEL OF HIGH COURTS THAT THE ASSE SSMENT ORDERS 13 BASED ON SUCH DRAFT ASSESSMENT ORDERS NOT FOLLOWING THE MANDATORY PROVISIONS OF SECTION 144C OF THE ACT IS WITHOUT JURISDICTION AND THEREFORE, NULL AND VOID AND NOT ENFORCEABLE IN LAW. FURTHER , THE HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF M/S. Z UARI CEMENTS LTD. VS. ACIT IN WRIT PETITION NO.5557/2012, DATED 21-02-20 13 HELD THAT THE IMPUGNED ORDER DATED 12-12-2011 PASSED BY T HE RESPONDENT WAS CONTRARY TO THE MANDATORY PROVISIONS OF SECTION 144 C OF THE ACT IS DECLARED AS ONE WITHOUT JURISDICTION, NULL AND VOID AND UNEN FORCEABLE. (SLP FILED AGAINST THE JUDGMENT OF AP HIGH COURT IN THE CA SE OF ACIT VS. M/S. ZUARI CEMENTS LTD. BY THE REVENUE STANDS DISMISSED ON THIS ISSUE). THEREFORE, WE HOLD THAT THE ASSESSMENT ORDER PASSED B Y THE AO IN THE INSTANT CASE DATED 15-01-2014 IS WITHOUT JURISDICT ION AND NULL AND VOID. ACCORDINGLY, THE ADDITIONAL GROUNDS RAISED BY TH E ASSESSEE ARE ALLOWED IN HIS FAVOUR. 10. CONSEQUENT TO ALLOWING OF ADDITIONAL GROUNDS IN FAVOUR OF THE ASSESSEE, WE FIND ADJUDICATION OF THE ISSUES RAISED IN THE O RIGINAL GROUNDS ON MERITS BECOME AN ACADEMIC EXERCISE. ACCORDIN GLY, THE SAID GROUNDS ARE DISMISSED AS ACADEMIC. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF APRIL, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 25 TH APRIL, 2018 14 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// SENIOR PRIVA TE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A)-13, PUNE 4. CIT-IIT/TP, PUNE 5. , , A BENCH PUNE; 6. / GUARD FILE.