POSCO INDIA PROCESSING CENTRE PVT. LTD.,CHENNAI V. DCIT, CORPORATE CIRCLE-5(2), CHENNAI

ITTPA 13/CHNY/2020

AI Insights

The case revolves around the procedural lapses by the Assessing Officer in the assessment of M/s.POSCO India Processing Centre Pvt. Ltd. for the assessment year 2013-14. Initially, the AO passed an assessment order based on the Transfer Pricing Officer's (TPO) order without issuing a draft assessment order, which is a mandatory requirement under section 144C(1) of the Income Tax Act, 1961. The assessee's objections to this were not considered due to the procedural irregularity. The Tribunal found that the final assessment order and the subsequent corrigendum and DRP directions were all invalid due to the failure to adhere to the statutory requirements of issuing a draft assessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107391 (ITAT-CHENNAI)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Other Referred Cases: Vijay Television P. Ltd. v. DRP & ACIT, Zuari Cement Ltd, Nokia India Pvt Ltd, Control Risks India Pvt Ltd, GE Oil & Gas India Private Ltd, Turner International India Pvt Ltd, JCB India Ltd, C-Sam (India) Pvt Ltd, M/s. CWT India Private Limited, ExxonMobil Company Private Limited, ExxonMobil Company India Pvt. Ltd., SHL (India) Private Limited, Dimension Data Asia Pacific PTE Ltd., Headstrong Services India Private Limited, Keller Ground Engineering India Pvt. Ltd., YCH Logistics (India) Pvt. Ltd., ADM Agro Industries Kota & Akola Pvt. Ltd., Mohan Jute Bags Mfg. Co.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A. SASIKUMAR
• Assessee Lawyers: VIKRAM VIJAYARAGHAVAN
• Keywords: Set aside; Transfer pricing; International transaction; Question of law; Period of limitation; Time period of passing order; Procedural lapse
• Section: 113; 13; 144C; 92C; 20

Judgement Text

"आयकर अपीलीय अिधकरण, ’डी’ \u0001यायपीठ, चे\tई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI \u0001ी एबी टी. वक , \u000bाियक सद\u0011 एवं एवं एवं एवं \u0001ी अिमताभ शु\u0018ा, लेखा सद\t क े सम\u001b BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./IT (TP) A No.13/Chny/2020 िनधा\u000eरण वष\u000e/Assessment Year: 2013-14 M/s.POSCO India Processing- Centre Pvt. Ltd., Plot No.RNS 9, 12, 13, 14, SIPCOT Industrial Growth Centre, Oragadam, Kanchipuram, Chennai-603 204. v. The DCIT, Corporate Circle-5(2), Chennai. [PAN: AAFCP 0211 N] (अपीलाथ\u0016/Appellant) (\u0017\u0018यथ\u0016/Respondent) अपीलाथ\u0016 क\u001a ओर से/ Appellant by : Mr.Vikram Vijayaraghavan, Advocate (Virtual) \u0017\u0018यथ\u0016 क\u001a ओर से /Respondent by : Mr.A. Sasikumar, CIT सुनवाईक\u001aतारीख/Date of Hearing : 12.12.2024 घोषणाक\u001aतारीख /Date of Pronouncement : 05.02.2025 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the assessment order of the AO dated 22.11.2019 passed u/s.143(3) r.w.s.254 r.w.s.92CA(4) r.w.s.144C(5) of the Income Tax Act, 1961 (hereinafter in short \"the Act”). 2. The assessee has raised a legal issue, which will be dealt with first and the relevant facts for adjudicating this issue are that assessee is a IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 2 :: Private Limited Company which filed its original return of income (RoI) on 02.09.2014 admitting loss of Rs.15,75,090/- and book profit u/s.115JB of the Act at NIL. Later, the case was selected for scrutiny under CASS. The AO made reference of international transactions reported by the assessee to the Transfer Pricing Officer (hereinafter in short ‘TPO’) who vide order dated 31.10.2016 proposed adjustment of Rs.34,23,87,806/-. Pursuant to which, the AO passed draft assessment order dated 05.12.2016 against which the assessee filed objections before the Dispute Resolution Panel (hereinafter in short ‘DRP’) which issued directions on 11.09.2017; pursuant to DRP directions, the AO passed the final assessment order on 24.10.2017. The assessee aggrieved by the action of the AO/DRP had filed an appeal before this Tribunal, and the Tribunal vide order dated 01.12.2017 had set aside the matter back to the AO with a direction to re-adjudicate the issues after obtaining TP issues re- adjudicated by the TPO. 3. Pursuant to the Tribunal order dated 01.12.2017, the AO in the second round referred to the TPO, the transfer pricing issues, and he passed the Transfer Pricing order on 29.10.2018 proposing adjustment of Rs.10,49,39,548/-. Pursuant to which, the AO passed the assessment order dated 30.12.2018 along with notice of demand of Rs.68,550/- [dated 30.12.2018]. The AO realizing that he has not passed draft IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 3 :: assessment order issued a Corrigendum dated 23.01.2019 informing the assessee to treat the assessment order dated 30.12.2018 as draft order only and advising the assessee to file objection if it prefers to do so before the DRP within ‘30’ days of receipt of the draft order or else final order will be passed. Even though, there was only ‘06’ days left for filing the objection before the DRP [after receiving the Corrigendum], the assessee filed objections before the Ld.DRP and raised a legal issue before the DRP that the AO erred in law by passing the final assessment order without issuing a draft assessment order as contemplated u/s.144C(1) of the Act, which was repelled by the DRP. Aggrieved by the aforesaid action of the DRP, which rejected the legal issue of jurisdiction of the AO to have passed the assessment order on 30.12.2018 pursuant to the TPO order dated 29.10.2018, without passing the draft assessment order, the assessee has raised the legal issue which needs to be adjudicated first, because it goes to the root of the matter in appeal before us. 4. Assailing the impugned action of the AO straight away passing the final assessment order dated 30.12.2018 without passing the draft assessment order as envisaged u/s.144C(1) of the Act, the Ld.AR contended that the impugned omission on the part of the AO, vitiated the assessment order dated 30.12.2018 and therefore, the action of the AO is IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 4 :: bad in law. According to him, the Corrigendum issued by the AO dated 23.01.2019 informing the assessee to treat the assessment order dated 30.12.2018 as draft assessment order is time barred u/s.153(3) r.w.s.153(5) of the Act and since, time line prescribed under the Act lapses on 31.12.2018, the Corrigendum dated 23.01.2019 is beyond the statutory period prescribed by limitation u/s.153 of the Act and therefore, such an order is a nullity in the eyes of law. Therefore, according to the Ld.AR, once the AO issued the assessment order dated 30.12.2018 along with demand notice on the same day i.e. 30.12.2018 and the next day [31.12.2018] being the last date prescribed by the statute to pass order, the action of the AO to cure the defect by issuing Corrigendum is without jurisdiction and such an order/corrigendum is null in the eyes of law and ab initio void. According to the Ld.AR, defect of jurisdiction can’t be cured even by consent of the parties. According to the Ld.AR, the action of the assessee filing objection before the DRP can’t cure the inherently erroneous order passed by the AO on 30.12.2018 along with demand notice because it was incurably bad. For the aforesaid proposition, he relied upon by the decision of the Hon’ble jurisdictional High Court in the case of Vijay Television P. Ltd. v. DRP & ACIT [WP No.1526 of 2014, WP No.1527 of 2014 placed at Page Nos.10-33 of the Paper Book] and various other decisions as under: 1. Zuari Cement Ltd [Special Leave to Appeal (Civil) /2013 CC 16694/2013] - Supreme Court IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 5 :: 2. *Nokia India Pvt Ltd [SPECIAL LEAVE PETITION (CIVIL) Diary No(s). 7302/2018] - Supreme Court 3 *Control Risks India Pvt Ltd [SPECIAL LEAVE PETITION (CIVIL) Diary No. 7090/2018]-- Supreme court 4 Vijay Television (P) Ltd [Writ Petition Nos. 1526 and 1527 of 2014 And M.P. Nos. 1 and 1 of 2014] Madras High Court 5 GE Oil & Gas India Private Ltd [W.P. No.1575 of 2020 And WMP. Nos.1839, 1841 and 1842 of 2020] Madras High Court 6 Turner International India Pvt Ltd [W.P.(C) 4260/2015 and W.PR.(C) 4261/2015]- Delhi High Court 7 * JCB India Ltd [W.P. (C) No. 3399/2016, W.P (C) No. 3429/2016 and W.P. (C) No. 3431/2016]- Delhi High Court 8 C-Sam (India) Pvt Ltd [TAX APPEAL NO. 542 of 2017]-- Gujarat High Court 9 *M/s. CWT India Private Limited (WRIT PETITION NO. 1784 OF 2022 with WRIT PETITION NO. 1791 OF 2022)Bombay High Court 10. *ExxonMobil Company Private Limited (WRIT PETITION NO. 451 OF 2022) - Bombay High Court 11 *ExxonMobil Company India Pvt. Ltd. (WRIT PETITION NO. 1706 OF 2023) - Bombay High Court 12 SHL (India) Private Limited (WRIT PETITION (L) NO.11293 OF 2021)- Bombay High Court 13 *Dimension Data Asia Pacific PTE Ltd. (WRIT PETITION NO. 921 OF 2018) - Bombay High Court 14 *Headstrong Services India Private Limited (IT.A.No.77 of 2019 dated 24.12.2020) 15 Keller Ground Engineering India Pvt. Ltd. [ITA No: 114/CHNY/2018] 16 YCH Logistics (India) Pvt. Ltd., [ITA No.322/Chny/2016] 17 ADM Agro Industries Kota & Akola Pvt. Ltd., [ITA No.839/DEL/2023] 18 Mohan Jute Bags Mfg. Co. [LT.A. No. 416/Kol/2020] 5. Relying on the aforesaid judgments, the Ld.AR of the assessee reiterated that the AO by passing the assessment order on 30.12.2018 has circumvented/by-passed the law amended u/s.144C(1) of the Act, which cast a duty on the AO to first prepare a draft assessment order pursuant to him receiving the Transfer Pricing order, so that assessee gets an opportunity to decide to file objection before the DRP or not. According to the Ld.AR, the AO had scant regard for the procedure prescribed by the statute and has arbitrarily passed the assessment order on 30.12.2018 pursuant to receiving the Transfer Pricing order dated 29.10.2018. And since, the time lapsed on 31.12.2018, the action of the IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 6 :: AO to have issued Corrigendum dated 23.01.2019 informing the assessee to treat the assessment order dated 30.12.2018 as draft assessment order is also bad in law being time barred and therefore, nullity in the eyes of law. Therefore, he prays that the legal issue be allowed and the assessment order dated 30.12.2018 be quashed and consequently, all other actions [DRP directions dated 04.09.2019 and the AO’s order dated 22.11.2019] be held to be void since the AO was functus officio after 31.12.2018. 6. Per contra, Ld.DR vehemently opposed submissions of the assessee and pointed out that this is the out-come of the second round before TPO/AO i.e., the Tribunal in the first round had remitted back the issue to the file of TPO/AO and therefore, procedure contemplated u/s.144C(1) i.e., to pass draft assessment order is only for the first round of assessment and drew our attention to section 144C(1), [which is reproduced for convenience]:- “(1) The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation which is prejudicial to the interest of such assessee.” 7. The Ld.DR reiterated that the AO needs to only pass a draft assessment order “in the first instance”. According to him, in the present case, draft assessment order was indeed passed ‘in the first instance’ on 31.12.2016; and subsequently, this Tribunal vide its order dated IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 7 :: 01.12.2017 has remitted the TP issues back to the file of the AO for re- adjudication after obtaining the transfer pricing issues re-adjudicated by the TPO. Therefore, according to the Ld.DR, consequent to the second TPO’s order [i.e., while giving effect to the Tribunal order dated 01.12.2017], the AO has rightly passed assessment order dated 30.12.2018, because draft assessment order needs to be passed only “at the first instance” and not ‘at the second instance’; and therefore, according to him, there is no violation of provisions of section 144C(1) of the Act. And for such proposition, he drew support from the decision of the Hon’ble Single Bench decision of the Jurisdictional High Court in the case of M/s. Enfinity Solar Solutions Pvt. Limited Vs. DCIT [W.P No.31165 of 2018 order dated 21.06.2021]. 8. Moreover, the DR pointed out that anyway, the AO has issued Corrigendum dated 23.01.2019 informing the assessee to treat the assessment order dated 30.12.2018 as draft assessment order and advising the assessee to file objection before the DRP within ‘30’ days from the date of receiving the draft assessment order [30.12.2018] and pursuant to which, the assessee had filed objections before the DRP and the DRP has adjudicated the objections and passed direction on 04.09.2019 and pursuant to which, directions the AO has passed the final assessment order dated 22.11.2019. Therefore, according to the Ld.DR, IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 8 :: there is no prejudice whatsoever, caused to the assessee and the case laws cited by the Ld.AR will not come to its aid and therefore, he prayed that the legal issue may be dismissed. 9. In his rejoinder, the Ld.AR brought to our notice that decision cited by the Ld.DR i.e., M/s. Enfinity Solar Solutions Pvt. Limited Vs. DCIT (supra), has been stayed by the Hon’ble Division Bench in CMP No.14988 of 2022 in W.A No.2006 of 2022 vide order dated 02.09.2022. 10. According to him, reliance made by the Ld.DR, for supporting action of the AO passing final assessment order without passing draft assessment order, passed by the Hon’ble Single Bench in the case of M/s. Enfinity Solar Solutions Pvt. Limited Vs. DCIT (supra), is no longer a judicial precedent and cannot be relied upon by the Department. Moreover, according to the Ld.AR, it is a trite law that an order passed beyond the statutory period prescribed is a nullity in the eyes of law, since, the limitation time to pass the assessment order lapsed on 31.12.2018 as stipulated u/s.153(3) r.w.s.153(5) of the Act. Consequently, the Corrigendum issued by the AO on 23.01.2019 is null in the eyes of law, because the AO became functus officio after 31.12.2018; and since, the AO lacked inherent jurisdiction after 31.12.2018 to pass order, the corrigendum issued after 31.12.2018 will be ab initio void and it is an incurable defect which strikes at the root of the jurisdiction for the IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 9 :: authority to pass order after limitation sets in; and it is a trite law that such a defect can’t be cured even by consent of the parties. Therefore, according to the Ld.AR even if the assessee has filed objections before the DRP it does not cure the incurable defect of the AO passing assessment order on 30.12.2018 without passing the draft assessment order as envisaged u/s.144C(1) of the Act. 11. We have heard both parties and perused records. It is not in dispute that the procedure for computation of arm’s length price [ALP] in respect of international transactions between eligible assessee & its AE has been prescribed under section 92C of the Act; accordingly, the AO is required to make a reference to the TPO u/s.92CA(1) of the Act for computing ALP; and TPO after getting reference from the AO is required to give an opportunity to the assessee, [who can furnish evidences, including any information or documents] and after considering the same, the TPO should determine arm’s length price in relation to international transactions and send a copy of his order to the AO as well as to the assessee, as contemplated u/s.92CA(1) of the Act. After receiving order from the TPO, the AO is required to pass a draft-assessment order u/s.144C(1) of the Act and the same is to be forwarded to the assessee, who after receiving draft assessment order may file his objections, if there is any variation in the income or loss returned to the DRP within 30 IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 10 :: days of the receipt of the draft order and the DRP, after considering objections of the assessee shall issue directions as per provisions of section 144C(6) of the Act. 12. The DRP before issuing any directions, may make such enquiry as he thinks fit, and DRP may confirm, reduce or enhance variations proposed in the draft order, however, it shall not set aside any proposed variation or issue any directions under sub-section (5) of section 144C of the Act for further enquiry. Thereafter, the AO shall inconformity with the directions of DRP complete the assessment order within one month from the end of the month in which such direction is received. 13. However, in the present case the AO passed the assessment order dated 30.12.2018 [along with demand notice dated 30.12.2018], without passing any draft order and straightaway framed the assessment on the basis of TPO order dated 29.10.2018 [refer Page Nos.7-18 of the Paper Book] which obviously prevented the assessee from filing objection before Ld.DRP. Therefore, it can be seen that in the present case, the AO didn’t follow the procedure in accordance with law as stipulated u/s.144C(1) of the Act, after the Tribunal order dated 01.12.2017. Since the Tribunal vide order dated 01.12.2017 for AY 2013-14 had set aside the matter to the AO with a direction to re-adjudicate the issues after obtaining the transfer pricing issue re-adjudicated by the TPO, then in such an event, IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 11 :: the AO ought to have followed the procedure prescribed u/s.144C(1) of the Act; and accordingly, when he received TPO order dated 29.10.2018 [in the second round], the AO ought to have passed draft-assessment order and gave opportunity to the assessee to prefer objections if any before the DRP before he passed the impugned assessment order along with the demand notice on 30.12.2018; which omission/failure on the part of AO offends Article 14 of the Constitution of India and infringes the principle of “Rule of Law”, which is a basic feature of our Constitution. It is settled position of law that when the statute requires something to be done in a particular manner, it has to be done in that manner and cannot be done in any other manner [Refer: Taylor Vs. Taylor,1875) 1 Ch.D.426; Nazir Vs. King Emperor, AIR 1936 PC 253, AIR 1975 SC 985; Babu Verghese Vs. Bar Council of Kerala, (1999)3 SCC 422]. Moreover, we find that this issue in question i.e. the legal issue raised by assessee is no longer res integra and note that there are number of decisions of the Hon’ble High Courts in favour of the assessee that it was mandatory for the AO to have passed a draft assessment order u/s.144C of the Act, prior to issuing final assessment order, and few decisions are discussed (infra). 14. In Zuari Cement Ltd. v. ACIT (decision dated 21st February, 2013 in WP(C) No.5557/2012), the Division Bench (DB) of the Hon’ble Andhra Pradesh High Court held that the failure to pass a draft assessment order IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 12 :: under Section 144C (1) of the Act would result in rendering the final assessment order \"without jurisdiction, null and void” and consequently unenforceable and accordingly, the demand notice issued by AO in that case was also set aside. And the department challenged the decision of the Hon’ble Andhra Pradesh High Court before the Hon’ble Supreme Court which was dismissed [refer Revenue’s SLP (C) [CC No. 16694/2013] on 27th September, 2013]. 15. Recently, the Hon’ble Delhi High Court Court in ESPN Star Sports Mauritius S.N.C. ET Compagnie v. Union of India [2016] 388 ITR 383 (Del.), following the decision of the Andhra Pradesh High Court in Zuari Cement Ltd. (supra), and the Madras High Court in Vijay Television (P) Ltd. (supra) and the Hon’ble Bombay High Court in International Air Transport Association V.DCIT (2016) 290 CTR (Bom) 46, also concurred with the same view. 16. Further, it is noted that the Hon’ble Gujarat High Court in C-Sam (India) (supra), repelled the plea of Revenue that non-compliance with the terms of Section 144C of the Act is merely an 'irregularity' and held that it was of 'great importance and mandatory'. It would be gainful to refer to the relevant portion of decision of Hon’ble High Court in C-Sam India (supra) which is reproduced as under: - IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 13 :: \"6. These statutory provisions make it abundantly clear that the procedure laid down under Section 144C of the Act is of great importance and is mandatory. Before the Assessing Officer can make variations in the returned income of an eligible assessee, as noted, sub-section (1) of Section 144C lays down the procedure to be followed notwithstanding anything to the contrary contained in the Act. This non-obstante clause thus gives an overriding effect to the procedure 'notwithstanding anything to the contrary contained in the Act'. Sub-section (5) of Section 144C empowers the DRP to issue directions to the Assessing Officer to enable him to complete the assessment. Sub-section (10) of Section 144C makes, such directions binding on the Assessing Officer. As per Sub-Section 144C, the Assessing Officer is required to pass the order of assessment in terms of such directions without any further hearing being granted to the assessee. 7. The procedure laid down under Section 144C of the Act is thus of great importance. When an Assessing Officer proposes to make variations to the returned income declared by an eligible assesses he has to first pass a draft order, provide a copy thereof to the assessee and only thereupon the assessee could exercise his valuable right to raise objections before the DRP on any of the proposed variations. In addition to giving such opportunity to an assessee, decision of the DRP is made binding on the Assessing Officer. It is therefore not possible to uphold the Revenue's contention that such requirement is merely a procedural. The requirement is mandatory and gives substantive rights to the assessee to object to any additions before they are made and such objections have to be considered not by the Assessing Officer but by the DRP. Interestingly, once the DRP gives directions under sub- section (5) of Section 144C, the Assessing Officer is expected to pass the order of assessment in terms of such directions without giving any further hearing to the assessee. Thus, at the level of the Assessing Officer, the directions of the DRP under sub-section (5) of Section 144C would bind even the assessee. He may of course challenge the order of the Assessing Officer before the Tribunal and take up all contentions. Nevertheless at the stage of assessment, he has no remedy against the directions issued by the DRP under sub-section (5). All these provisions amply demonstrate that the legislature desired to give an important opportunity to an assessee who is likely to be subjected to upward revision of income on the basis of, transfer pricing mechanism. Such opportunity cannot be taken away by treating it as purely procedural in nature.\" 17. It is further noted that in Turner International India Pvt Ltd in WP(C)4260/2015 the Revenue contended before the Hon’ble Delhi High Court in a similar case that failure to pass a draft assessment order under Section 144C of the Act is a curable defect and therefore, pleaded that IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 14 :: the issue may be restored back to AO to correct the defect. It is noted that such a contention of the Revenue has been repelled by Hon’ble High Court where it was observed at paras 15 and 16 as under: \"15. Mr. Dileep Shivpuri, learned counsel for the Revenue sought to contend that the failure to adhere to the mandatory requirement of issuing a draft assessment order under Section 144C (1) of the Act would, at best, be a curable defect. According to him the matter must be restored to the AO to pass a draft assessment order and for the Petitioner, thereafter, to pursue the matter before the DRP. 16. The Court is unable to accept the above submission. The legal position as explained in the above decisions in unambiguous. The failure by the AO to adhere to the mandatory requirement of Section 144C ( 1) of the Act and first pass a draft assessment order would result in invalidation of the final assessment order and the consequent demand notices and penalty proceedings.” 18. Further, it is noted that the Hon’ble Delhi High Court in the case of PCIT Vs. Headstrong Services India Pvt. Ltd in ITA No.77 of 2019 dated 24.12.2010 held in similar circumstances of the case as under:- “17. In the opinion of this Court, Section 144C is a self contained provision which carves out a separate class of assesses i.e. 'eligible assessee' i.e. any person in whose case the variation arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of Section 92CA. For this class of assesses, it prescribes a collegium of three commissioners, once objections are preferred. Dispute Resolution Panel's powers are co-terminous with the CIT(A), including the power to confirm, reduce or enhance the variation proposed and to consider the issues not agitated by the Assessee in the objections. In fact, under Section 144C, the Dispute Resolution Panel can issue directions as it thinks fit for the guidance of the Assessing Officer to enable him to complete the assessment and the Dispute Resolution Panel can confirm, reduce or enhance the variations proposed in the draft order. It is specifically stipulated in Section 144C that every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer. This is akin to the Assessing Officer giving effect to an order passed by the Appellate Authority or the Courts. 18. Consequently, Section 144C envisages a change of forum and it leads to complete cessation of the jurisdiction of the Assessing officer on passing of the draft order. Thereafter the Assessing officer is to give effect to either the direction of the Dispute Resolution Panel or pass an order on acceptance by the Assessee. THE EXPRESSION 'IN THE FIRST INSTANCE' HAS BEEN USED IN SECTION 144C TO SIGNIFY THE FIRST STEP TO BE TAKEN BY THE ASSESSING OFFICER IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 15 :: IN A SERIES OF ACTS CONTEMPLATED BY THE SAID SECTION. TO ACCEPT THE APPELLANT'S ARGUMENT WOULD BE TO PERMIT THE ASSESSING OFFICER TO DECIDE THE OBJECTIONS FILED BY THE ASSESSEE- WHICH POWER HAS BEEN SPECIFICALLY DENIED BY THE STATUTE. 19. The expression 'in the first instance' has been used in Section 144C to signify the first step to be taken by the Assessing Officer in a series of acts contemplated by the said Section while dealing with the case of an eligible assessee. This Court is further of the view that if the Assessing Officer under Section 144C can prepare a draft assessment order only, then by virtue of a remand order which directs the Assessing Officer to decide the matter de novo, the Assessing Officer cannot get the power to pass an assessment order, when there is an objection by the Assessee like in the present case, without reference of the Dispute Resolution Panel which comprises of three Principal Commissioners or Commissioners of Income Tax constituted by the Board. 20. Now to accept the appellant's argument would be to permit the Assessing Officer to decide the objections filed by the Assessee - which power has been specifically denied by the statute. IT IS SETTLED IA W THAT WHEN A POWER IS GIVEN TO DO CERTAIN THING IN A CERTAIN WAY. THE THING MUST BE DONE IN THAT WAY OR NOT AT ALL AND OTHER METHODS OF PERFORMANCE ARE FORBIDDEN 21. It is further settled law that when a power is given to do certain thing in a certain way, the thing must be done in that way or not at all and other methods of performance are forbidden. [See: Taylor Vs. Taylor,1875) 1 Ch.D.426; Nazir Vs. King Emperor, AIR 1936 PC 253, AIR 1975 SC 985; Babu Verghese Vs. Bar Council of Kerala, (1999)3 SCC 422], FAILURE TO ADHERE TO THE MANDATORY PROCEDURE PRESCRIBED UNDER SECTION 144C OF THE ACT WOULD VITIATE THE ENTIRE PROCEEDINGS AND THE SAME CANNOT BE TREATED AS AN IRREGULARITY/ CURABLE DEFECT. 22. The appellant has also contended that the failure to follow the procedure under Section 144C of the Act, at the highest, was a procedural irregularity and not an illegality. This issue is no longer res integra. It is now settled law that failure to adhere to the mandatory procedure prescribed under Section 144C of the Act would vitiate the entire proceedings and the same cannot be treated as an irregularity/ curable defect. 23. In ESPN Star Sports Mauritius S.N.C. ET Companies vs. Union of India, (2016) 388 /TR 383 (Delhi) this Court, after discussing the judgments of the Andhra Pradesh High Court, High Court of Bombay as well as Madras High Court in Vijay Television Pvt. Ltd. vs. TRP and Ors. (2014) 369 ITR 130 has held that failure to pass a draft assessment order under Section 144C(l) of the Act would render the final assessment order without jurisdiction, null and void and unenforceable. The said view was reiterated by this Court in Turner International India Pvt. Ltd. vs. Deputy Commissioner of Income Tax, Cirlce- 25(2), New Delhi, WP(C) 4260¬4261/2015 as well Nokia India Pvt. Ltd. vs. Additional Commissioner of Income Tax, WP(C)3629/2017. The relevant portion of the judgment in Turner International India Pvt. Ltd. (supra) is reproduced herein below: \"11. The question whether the final assessment order stands vitiated for failure to adhere to the mandatory requirements of first passing draft assessment order in terms of Section 144C(l) of the Act is no IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 16 :: longer res integra. There is a long series of decisions to which reference would be made presently. 12. in Zuari Cement Ltd. v. ACIT (decision dated 21st February, 2013 in WP(C) No.5557/2012), the Division Bench (DB) of the Andhra Pradesh High Court categorically held that the failure to pass a draft assessment order under Section 144C (]) of the Act would result in rendering the final assessment order \"without jurisdiction, null and void and unenforceable.\" In that case, the consequent demand notice was also set aside. The decision of the Andhra Pradesh High Court was affirmed by the Supreme Court by the dismissal of the Revenue's SLP (C) [CC No. 16694/2013] on 27 September, 2013. 13. In Vijay Television (P) Ltd. v. Dispute Resolution Panel [2014] 369 ITR 113 (Mad.), a similar question arose. There, the Revenue sought to rectify a mistake by issuing a corrigendum after the final assessment order was passed. Consequently, not only the final assessment order but also the corrigendum issued thereafter was challenged. Following the decision of the Andhra Pradesh High Court in Zuari Cement Ltd. v. ACIT (supra) and a number of other decisions, the Madras High Court in Vijay Television (P) Ltd. v. Dispute Resolution Panel ( supra) quashed the final order of the AO and the demand notice. Interestingly, even as regards the corrigendum issued, the Madras High Court held that it was beyond the time permissible for issuance of such corrigendum and, therefore, it could not be sustained in law. 14. Recently, this Court in ESPN Star Sports Mauritius S.N.C. ET Compagnie v. Union of Indi [2016] 388 ITR 383 (Del.), following the decision of the Andhra Pradesh High Court in Zuari Cement Ltd. v. ACIT (supra), the Madras High Court in Vijay Television (P) Ltd. v. Dispute Resolution Panel, Chennai ( supra) as well as the Bombay High Court in International Air Transport Association v. DCIT (2016) 290 CTR (Bom) 46, came to the same conclusion. 15. Mr. Dileep Shivpuri, learned counsel for the Revenue sought to contend that the failure to adhere to the mandatory requirement of issuing a draft assessment order under Section l 44C ( 1) of the Act would, at best, be a curable defect. According to him the matter must be restored to the AO to pass a draft assessment order and for the Petitioner, thereafter, to pursue the matter before the DRP. 16. The Court is unable to accept the above submission. The legal position as explained in the above decisions in unambiguous. The failure by the AO to adhere to the mandatory requirement of Section l 44C ( 1) of the Act and first pass a draft assessment order would result in invalidation of the final assessment order and the consequent demand notices and penalty proceedings.\" CONCLUSION 24. Consequently, in the present case, in complete contravention of Section 144C, the Assessing Officer wrongfully assumed the jurisdiction and passed the final assessment order without passing a IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 17 :: draft assessment order and without giving the respondent/assessee an opportunity to raise objections before the Dispute Resolution Panel. 25. Keeping in view the aforesaid, this Court is of the opinion that no question of law, let alone a substantial question of law, arises in the present appeal. 26. This Court is of the view that till the Income Tax Department ensures that the Assessing Officers follow the mandate of law, in particular, binding provisions like Section 144C and eschew filing of unnecessary appeals rather than in nearly all matters where the Assessing Officer has taken a view against the Assessee, the assessments will not achieve finality for a number of years like in the present case where the case of assessment year 2007-08 stands remanded and restored to the file of the Assessing Officer. 27. Consequently, we dismiss the present appeal and confirm the impugned order of the ITAT with costs of Rs.11,000/- to be paid to Delhi High Court Legal Services Committee.” 19. In the case of Vijay Television (P) Ltd. v. Dispute Resolution Panel [2014] 369 ITR 113 (Mad.), a similar question arose before the Hon’ble Madras High Court. There, the Revenue sought to rectify similar impugned action of AO, by issuing a corrigendum after the final assessment order was passed. The assessee, consequently challenged not only the final assessment order but also the corrigendum issued by the AO. The Hon’ble Madras High Court concurred with the decision of the Hon’ble Andhra Pradesh High Court in Zuari Cement Ltd. v. ACIT (supra) as well as a number of other decisions, quashed the final assessment order of the AO as well as the demand notice. And in respect of the corrigendum issued by the AO, the Hon’ble Madras High Court held that it was beyond the time permissible for issuance of such corrigendum and, therefore, it could not be sustained in law. IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 18 :: 20. In the light of the aforesaid discussion, relying on the decisions of the Hon’ble Jurisdictional High Court in the case of Vijay Television Pvt. Ltd (supra) and GE OIL & Gas India Pvt.Ltd. (supra) as well as other judicial precedents cited supra, we are of the view that AO erred in passing assessment order along with demand notice without passing draft assessment order and therefore, assessment order dated 30.12.2018 passed by the AO is held to be wholly without jurisdiction and consequently unenforceable and bad in law and therefore, the same needs to be set-aside. 21. Before parting, we need to take note of the subsequent developments that happened in this case, wherein, the AO after passing the assessment order dated 30.12.2018 along with demand notice [which action we found to be bad in law] had issued a Corrigendum on 23.01.2019 wherein he informed the assessee to treat the assessment order dated 30.12.2018 as draft assessment order and advising the assessee to file objection before the DRP within ‘30’ days or he will be passing final assessment order without giving any further notice. Pursuant to the ibid action of the AO, the assessee preferred its objections before the DRP which passed the directions on 04.09.2019, pursuant to which the AO passed the final assessment order dated 22.11.2019. On the strength of the aforesaid actions taken by the AO/assessee/DRP, the IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 19 :: Ld.DR asserted that there is no prejudice caused to the assessee in any manner. Therefore, according to the Ld.DR, the omission, if any, has been cured by the AO’s subsequent action in the assessee’s case by issuing Corrigendum on 23.01.2019. According to the Ld.DR, therefore, the action of the AO passing the final assessment order dated 22.11.2019 for AY 2013-14 is valid in the eyes of law. 22. The aforesaid assertion of the Ld.DR for the Revenue can’t be countenanced for the simple reason that the limitation period prescribed u/s.153(3) r.w.s.153(5) of the Act stipulates the timeline for passing of the assessment order by virtue of which the assessment order has to be passed on or before 31.12.2018 unless the assessee has preferred objections against the draft assessment order before the DRP which would have extended the limitation period for passing the final assessment order, which is not the case before us. Admittedly, pursuant to the Tribunal directions for re-adjudication, the TPO had passed the TP order on 29.10.2018 and the AO had passed assessment order on 30.12.2018 along with notice of demand u/s.156 of the Act demanding Rs.68,550/- [refer Page No.19 of the appeal set] and therefore, after 31.12.2018, the AO has become functus officio and the action of the AO to pass the Corrigendum dated 23.01.2019 is null in the eyes of law and the subsequent action of the assessee to file objection before the DRP [based IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 20 :: on the advice given by the AO in the Corrigendum dated 23.01.2019] can’t confer the jurisdiction to the DRP/AO, since it is trite law that when the authority making order lacks inherent jurisdiction, such an order is null and ab initio void as a defect of jurisdiction goes to the root of the matter and strikes at the very authority to pass any order and such defect can’t be cured even by consent of the parties. Therefore, the action of the AO i.e. Corrigendum dated 23.01.2019 and subsequent order of the DRP as well as the AO order dated 22.11.2019 for AY 2013-14 is wholly without jurisdiction and bad in law and we quash it. And therefore, assessment order framed by the AO dated 30.12.2018 and the demand notice dated 30.12.2018 are null in the eyes of law and the Corrigendum dated 23.01.2019 and the DRP order dated 04.09.2019 as well as the AO’s order dated 22.11.2019 are wholly without jurisdiction and the assessee succeeds on the legal issue and therefore, other issues are academic in nature, therefore dismissed. 23. In the result, appeal filed by the assessee is allowed. Order pronounced on the 05th day of February, 2025, in Chennai. Sd/- (अिमताभ शु\u0018ा) (AMITABH SHUKLA) लेखा सद\u0003य/ACCOUNTANT MEMBER Sd/- (एबी टी. वक ) (ABY T. VARKEY) \u0005याियक सद\u0003य/JUDICIAL MEMBER चे\tई/Chennai, !दनांक/Dated: 05th February, 2025. TLN, Sr.PS IT (TP) A No.13/Chny/2020 (AY 2013-14) M/s.POSCO India Processing Centre Pvt. Ltd. :: 21 :: आदेश क\u001a \u0017ितिलिप अ$ेिषत/Copy to: 1. अपीलाथ\r/Appellant 2. \u000e\u000fथ\r/Respondent 3. आयकरआयु\u0015/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय\u000eितिनिध/DR 5. गाड\u001eफाईल/GF "