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2023 (12) TMI 973 - AT - Income TaxValidity of final assessment order based on draft assessment order - Draft assessment order passed coupled with the Notice of demand u/s 156 and followed by notice u/s 274 rws 271(1)(c) - HELD THAT:- According to the provisions of Section 144C (1) AO is required to pass draft of the assessment order in case of impugned assessee. But here draft assessment order is accompanies with Notice of demand u/s 156 and followed with a show cause notice for levy of penalty u/s 274 r.w.s. 271 (1) (c) of the Act. Both Notice of demand and penalty proceedings are further followed by subsequent communication. Therefore, it is merely not an error but for all practical purposes, the AO passed the final assessment order instead of Draft Assessment order. In penultimate paragraph also AO mentions section 144 (13) of the Act. Both the draft assessment order and the demand notice are dated 30-11-2018. Now the issue is squarely covered against the revenue in case of Cisco Systems Services B.V [2023 (3) TMI 416 - KARNATAKA HIGH COURT] held that it is settled that demand notice stems out of an order of assessment and it is enforceable. It meets the assessee with civil consequences. The argument on behalf of the Revenue that the demand notice was not enforced is fallacious and noted only to be rejected. Mistake which the ACIT has done in passing the final order at the stage of draft order is not curable u/s 292B. Thus draft assessment order passed coupled with the Notice of demand u/s 156 of the Act and followed by notice u/s 274 rws 271(1)(c) of the Act makes the draft order as final. Thus, the draft assessment order dated 30-11-12018 passed by ld AO is invalid and further as the final assessment order is based on an invalid order, same is also quashed. Adjustment of international transaction of payment of royalty for use of trade marks to AES - As assessee has already withdrawn grounds No 10 to 13 of the appeal, respectfully following decision of coordinate bench in [2019 (8) TMI 1011 - ITAT PUNE] A.Y. 2008-09, we hold that total income of the assessee shall be the amount of returned income and added thereto amount of income agreed by the assessee in MAP proceedings.
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