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2021 (11) TMI 74 - AT - Income TaxViolation of section 144C(1) - whether the impugned assessment order passed by the AO without proposing a draft assessment order makes it invalid? - HELD THAT:- Undisputedly, the conditions of section 144C(1) of the Act are satisfied in case of the present assessee, as, the assessee has entered into international transaction with the AE and there is a variation to the income which is prejudicial to the interest of assessee. In fact, initially, based on the adjustment proposed by the TPO, the AO had framed the draft assessment order and ultimately the Tribunal restored the issue back to him. However, though, the TPO again proposed adjustment and there is a variation to the income of the assessee which is prejudicial to its interest, the AO without following the mandatory provisions of section 144C(1) of the Act has proceeded to pass a final assessment order making the addition proposed by the TPO. There cannot be any doubt that the AO has not followed the statutory mandate contained under section 144C(1) of the Act. Keeping in view the aforesaid factual position, it has to be decided whether the assessment order so passed is valid in the eye of law. Undoubtedly, by not proposing a draft assessment order, the AO has effectively denied the assessee the remedy available under the statute of raising objections before the DRP. As we find, while deciding identical nature of dispute involving similar facts, the Hon’ble jurisdictional High Court in case of Dimension Data Asia Pacific Pte. Ltd. [2018 (7) TMI 1256 - BOMBAY HIGH COURT] has held that assessment order passed in violation of section 144C(1) is invalid - Hon’ble Delhi High Court in case of Turner International India (P) Ltd. vs. DCIT [2017 (5) TMI 991 - DELHI HIGH COURT] has expressed same view. We hold that the impugned assessment order passed under section 143 (3) r.w.s. 254 of the Act is invalid. Accordingly, we quash it. This ground is allowed.
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