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2021 (12) TMI 545 - AT - Income TaxRevision u/s 263 by CIT - Assessment in the case of the appellant for the captioned Assessment Years so completed was on the basis of cost plus method on the salary of expat employees, wherein 25% of salary is attributable to operation in India and cost of 20% of salary was applied on the same to determine the profit taxable in India - HELD THAT:- As it is mandatory to follow the directions of the DRP by the Assessing Officer failing which the assessment order would become nonest. In our considered view, the Assessing Officer passed the impugned final assessment orders not carrying out the binding directions of the DRP which is a clear violation of the binding provisions of section 144C(13) of the Act. Therefore, in our humble opinion, the impugned assessment orders are non-est. We are of the further opinion that once the assessment orders have been held to be non-est, the ld. CIT could not have assumed jurisdiction u/s 263 of the Act over a non assessment order which can never be erroneous and prejudicial to the interest of the Revenue. The contention of the ld. DR that the Assessing Officer has followed the directions of the DRP but somehow over looked the directions issued. We are of the considered view that there is no choice given to the Assessing Officer to follow one part of the directions of the DRP and not to follow the other part. Whether the assessee can challenge the validity of the assessment order in collateral proceedings u/s 263? - In our considered opinion, the assessee can challenge the validity of the assessment order in the collateral proceedings u/s 263 of the Act since the assessment order itself is bad in law. Therefore, such an order cannot be revised u/s 263 of the Act. Our view is fortified by the decision of Krishna Kumar Saraf [2015 (10) TMI 2168 - ITAT DELHI] AND Super Sonic Technologies [2018 (12) TMI 912 - ITAT DELHI] - Considering all we are of the considered opinion that the ld. CIT has erroneously assumed jurisdiction u/s 263 of the Act when the impugned assessment orders were non-est. - Decided in favour of assessee.
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