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2018 (6) TMI 1106 - AT - Income TaxAddition made invoking the Transfer Pricing provisions - Non complied with the provisions of Section 144C - Held that:- It is very obvious that AO and TPO have not followed the directions of the ITAT - In fact the order of TPO is not placed on record nor has AO mentioned why assessee’s contentions are rejected. As per the provisions of the Act, AO is bound to issue draft assessment order so that assessee can raise objections before the DRP as per the provisions of the Act. In this case, AO without issuing the draft assessment order, has passed the final assessment order thereby violating the provisions of the Act. No hesitation to hold that AO has not complied with the provisions of Section 144C which is mandatory in all such cases, where TPO proposes variation in the income and loss returned which is prejudicial to the interest of assessee. Only after complying with the conditions laid down in Section 144C, AO is empowered to pass order u/s. 143(3) r.w.s. 144C. Even in the remand proceedings also AO is bound to follow the provisions of the Act. Since AO has not passed the order in compliance to the provisions of Section 144C, the order passed by AO is bad in law and accordingly, the same is annulled - Decided in favour of assessee
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