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2019 (8) TMI 763 - AT - Income TaxEffect of non-passing draft assessment order u/s 144C(1) - Transfer pricing adjustment - AO instead of passing draft assessment order, issued final assessment order along with demand notice upward TP adjustment was made u/s 92CA(3) by TPO - HELD THAT:- The Hon’ble Bombay High Court in Pr.CIT Vs. Lionbridge Technologies (P.) Ltd. ( 2018 (12) TMI 764 - BOMBAY HIGH COURT ) have laid down the proposition that in terms of section 144C(1), the AO is to first pass a draft assessment order which is subject to challenge, by way of representation to the DRP. It is only after DRP disposes of representation, that AO passes a final order in terms of directions of DRP and such final order is appealable to the Tribunal. Applying the said proposition to the facts of present case and mainly relying on the proposition that mere consent of parties does not bestow the jurisdiction, where the order is beyond jurisdiction. We hold that even if assessee had accepted addition to be made on account of transfer pricing adjustment, during assessment proceedings, would not bestow the jurisdiction upon the AO and final assessment order passed in the case cannot be upheld in law, in the absence of AO passing draft assessment order, which is envisaged as per section 144C(1). Accordingly, we hold that assessment order passed in the case is without jurisdiction and bad in law. Similar issue of AO having passed final assessment order u/s 143(3) making certain adjustments to assessee’s arm's length price without processing draft assessment order, the Tribunal in Soktas India (P.) Ltd. Vs. ACIT ( 2017 (2) TMI 1001 - ITAT PUNE ) it was held that the said order being against provisions of section 144C. In view of our setting aside the assessment order passed in the case u/s 143(3), the grounds of appeal raised by assessee on merits and the grounds of appeal raised by Revenue become academic in nature and the same are dismissed. - Decided against revenue
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