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2019 (6) TMI 658 - AT - Income TaxFailure to pass Draft Assessment order u/s 144C(1) - AO passed the final assessment order without Draft Assessment Order and issued notice u/s. 156 and 271(1)(c) - Nowhere, in the proceedings before DRP or the AO the assessee raised objections challenging the validity of Draft Assessment Order - HELD THAT:- The demand notice u/s. 156 and notice initiating penalty proceedings u/s. 271(1)(c) are issued only after passing of final assessment order. Since, the said notices were issued by the AO along with the Draft Assessment Order, the said assessment order partake the character of final assessment order. The AO at no point of time after issuing notice u/s. 156 and u/s. 271(1)(c) has withdrawn the said notices. Failure of AO to adhere mandatory requirement of section 144C in not first passing the Draft Assessment Order invalidates the final assessment order and subsequent the proceedings arising there from. In catena of judgments by Hon’ble High Courts it has been held that passing of final assessment order u/s. 144C(13) r.w.s. 143(3) without passing Draft Assessment Order u/s. 144C(1) is in violating of provisions of section 144C and hence, such final assessment order is unsustainable. Thus assessment order issued along with notice of demand u/s. 156 and notice of penalty u/s. 271(1)(c) is passed in violation of mandatory provisions of section 144C of the Act. - Decided in favour of assessee.
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