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TMI Blog2021 (10) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... and with the assistance of the ld. Counsel, we have considered the documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules. 4. Briefly stated, the facts of the case are that in the first round of litigation, the quarrel travelled upto the Tribunal and the Tribunal, inter alia, considered the quarrel against the inclusion of the case of Samrat Clearing in the list of comparables. 5. While restoring the issue to the file of the TPO/Assessing Officer, the Tribunal in ITA No. 2307/DEL/2006 & 6719/DEL/2013 held as under: "7.3 Coming to the merits of the exclusion or otherwise of this case, we find that there is no discussion in the order of the TPO about the comparability or otherwise of this case with the assessee. In our considered opinion, the ends of justice would meet adequately if the impugned order is set aside to this extent and matter is restored to the TPO/AO for first deciding the comparability or otherwise of Samrat Clearing with the assessee and then accordingly recomputing the ALP of this set of international transactions. Needless to say, the assessee will be allowed a reasonable opportunity of being heard in such proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 144C of the Act. In this regard, reference is made to Section 292B of the Act. 19. As already noted, the final assessment order of the AO stood vitiated not on account of mere irregularity but since it was an incurable illegality. Section 292B of the Act would not protect such an order. This has been explained by this Court in its decision dated 17th July 2015 passed in ITA No. 275/2015 (Pr. Commissioner of Income Tax, Delhi-2, New Delhi v. Citi Financial Consumer Finance India Pvt. Ltd.) where it was held: "Section 292B of the Act cannot be read to confer jurisdiction on the AO where none exists. The said Section only protects return of income, assessment, notice, summons or other proceedings from any mistake in such return of income, assessment notices, summons or other proceedings, provided the same are in substance and in effect in conformity with the intent of purposes of the Act." 20. The Court further observed that Section 292B of the Act cannot save an order not passed in accordance with the provisions of the Act. As the Court explained, "the issue involved is not about a mistake in the said order but the power of the AO to pass the order." 21. In almost ide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in International Air Transport Association v. DCIT (2016) 290 CTR (Bom) 46, came to the same conclusion." 22. In the decision of the Gujarat High Court in C-Sam (India) (supra), the Court negated the plea that non-compliance with the terms of Section 144C of the Act is merely an 'irregularity'. The Gujarat High Court held that it was of 'great importance and mandatory'. The following passages of the said decision of Gujarat High Court are relevant for the present purposes: "6. These statutory provisions make it abundantly clear that the procedure laid down under Section 144C of the Act is of great importance and is mandatory. Before the Assessing Officer can make variations in the returned income of an eligible assessee, as noted, sub-section (1) of Section 144C lays down the procedure to be followed notwithstanding anything to the contrary contained in the Act. This non-obstante clause thus gives an overriding effect to the procedure 'notwithstanding anything to the contrary contained in the Act'. Sub-section (5) of Section 144C empowers the DRP to issue directions to the Assessing Officer to enable him to complete the assessment. Sub-section (10) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court in Turner International (supra) where it was observed in paras 15 and 16 as under: "15. Mr. Dileep Shivpuri, learned counsel for the Revenue sought to contend that the failure to adhere to the mandatory requirement of issuing a draft assessment order under Section 144C(1) of the Act would, at best, be a curable defect. According to him the matter must be restored to the AO to pass a draft assessment order and for the Petitioner, thereafter, to pursue the matter before the DRP. 16. The Court is unable to accept the above submission. The legal position as explained in the above decisions in unambiguous. The failure by the AO to adhere to the mandatory requirement of Section 144C(1) of the Act and first pass a draft assessment order would result in invalidation of the final assessment order and the consequent demand notices and penalty proceedings." 25. For all of the aforementioned reasons, the Court finds no difficulty in holding that the impugned final assessment orders dated 30th March 2016 passed by the AO for A.Ys. 2006-07, 2007-08 and 2008-09 are without jurisdiction on account of the failure, by the AO, to first pass a draft assessment order and thereafter, subje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31st January, 2018 is not an order merely giving an effect to the order of the Tribunal, but it is an ITA Nos. 1635 & 1636/Mum/2017 assessment order which has invoked Section 143(3) of the Act and also Section 144C of the Act. This invocation of Section 144C of the Act has taken place as the Assessing Officer is of the view that it applies, then the requirement of Section 144C(1) of the Act has to be complied with before he can pass the impugned order invoking Section 144C(13) of the Act. In fact, Section 144C(13) of the Act can only be invoked in cases where the assessee has approached the DRP in terms of sub-Section 144(C)(2)(b) of the Act and the DRP gives direction in terms of Section 144C(5) of the Act. In this case, the assessment order has invoked Section 144C(13) of the Act without having passed the necessary draft Assessment Order under Section 144C(1) of the Act, which alone would make an direction under Section 144C(5) of the Act by the DRP possible. Thus, the impugned order is completely without jurisdiction. 10. Moreover, so far as a Foreign Company is concerned, the Parliament has provided a special procedure for its assessment and appeal in cases where the Assessin ..... 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