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2020 (1) TMI 778 - AT - Income TaxTP Adjustment - Assessment u/s 144C(1) - eligible assessee u/s 144C(15)(b)(i) - failure to pass draft of the proposed assessment order - adjustment towards the domestic transactions undertaken for the assessee with its related parties - TPO has passed the order u/s 92CA(3) - HELD THAT:- In terms of section 144C(1) AO was required to issue the draft of the proposed assessment order to the assessee as variation so proposed is prejudicial to the interest of the assessee, being a specific mandate of the legislation as provided u/s 144C(1) of the Act. Wherever, there is any variation to the returned income proposed in the hands of the eligible assessee, the Assessing Officer shall in the first instance issue a draft of the proposed order and only where the assessee intimate the Assessing Officer the acceptance of the variations so proposed or no objection is received within the specified period, the Assessing Offer shall pass the final assessment order. In the instant case, the Assessing officer has not issued the draft of the proposed assessment order and the provisions of section 144C have been clearly violated and not followed by the Assessing Officer. The contention of the Revenue that due opportunity has been provided to the assessee during the course of assessment proceedings wherein the matter relating to the adjustment proposed by the TPO was discussed with Assessee does not absolve the Assessing Officer from the mandatory and not just a procedural requirement of issuing the draft of the proposed order as required u/s 144C(1) of the Act. Therefore, following the decision in case of Jaipur Rugs Company (P) Ltd . [2018 (6) TMI 146 - ITAT JAIPUR] the assessment order so passed by the Assessing Officer u/s 144C(1) read with 143(3) without issuing the draft of the proposed order cannot be sustained in the eyes of law and is hereby set aside. In the result, the ground no. 1 of the assessee’s appeal is allowed.
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