TMI Blog2021 (11) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) erred in not appreciating that it was mandatory on the part of the Ld. AO to pass a draft order as contemplated u/s 144C of the Act in the first instance and only then the final order could have been passed failing which the final order passed is bad in law and void. 2.1 In the facts and circumstances of the case and in law, the Learned Transfer Pricing Officer [ the TPO ] erred in rejecting the comparable namely BCC Fuba Ltd. on irrelevant and extraneous consideration and in stark violation of the very order of the Hon ble Tribunal for AY 2003-04 in the case of the Assessee relied on by him. 3. In Ground No. 1.2, assessee has raised a legal issue challenging the validity of the assessment order passed under section 143(3) r.w. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carry out the direction of the Tribunal. Though, the TPO partially reduced the adjustment made earlier, nonetheless, he again proposed an adjustment to the ALP. Based on the adjustment proposed by the TPO, the AO has passed the impugned assessment order under section 143(3) r.w.s. 254 of the Act adding back the adjustment proposed by the TPO. 5. Shri Y.P. Trivedi, learned senior counsel for the assessee submitted, instead of proposing a draft assessment order in terms of section 144C(1) of the Act, the AO has passed a final assessment order. Thus, he submitted, the AO having not followed the statutory mandate of section 144C, the assessment order is invalid. In support of his contention, learned senior counsel relied upon the following d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other provisions of the Act. 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 ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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