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TMI Blog2024 (2) TMI 391X X X X Extracts X X X X X X X X Extracts X X X X ..... e during the relevant assessment year has entered into some international transactions and, therefore, the case of the Assessee was referred by the ITO 7(3)(2), Mumbai on 19/07/2013 to the TPO / Addl. Commissioner of Income-tax, Transfer Pricing 4(3), Mumbai for the computation of arm's length price (in short "ALP‟) in relation to the international transactions as detailed in audit report in Form No. 3CEB. 5. The Ld. TPO by perusing the financials of the Assessee observed that the Assessee company is engaged in the business of trading in home textile products and during the year under consideration has entered into international transactions with its Associated Enterprises (AEs) of the amount more than Rs. 15 crores and by analyzing facts and circumstances vide order dated 28/01/2015 under section 92CA(3) of the Act ultimately, determined and recommended the following upward adjustments:- S. No. Particulars Adjustment Proposed 1 Show Room & Marketing Dev Expenses Rs. 5,21,93,842 2 Sales Margin with respect of Vapi TT and Vapi Rug Rs. 36,15,481 3 Interest on loan given Rs. 3,63,846 4 Interest on excess premium paid Rs. 4,40,41,552 Total Rs. 10, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without authority of law. l(b) The Id. AO failed to first pass a draft assessment order u/s. 144C(1) of the Act and forward a copy thereof to the Appellant, and instead, has directly passed the impugned final assessment order dated 13-3-2015 under section 143(3) r.w.s. 92CA of the Act, resulting in a substantive lapse on part of the Id. AO and thus, rendering the said final assessment order devoid of jurisdiction, illegal and bad in law." 10.1 We by considering the additional grounds raised by the Assessee, observe that the additional grounds raised by the Assessee prima facie appears to be legal in nature and arising from the facts which are already on record and, therefore, in view of the decision in the case of National Thermal Power Corporation Ltd vs CIT (1998) 229 ITR 383 (SC), the same are allowed to be raised for adjudication. 11. Coming to merit of the additional grounds, we observe that it is admitted fact that in the instant case, the Assessee is an eligible Assessee as per the provision of section 144C of the Act and the Assessing Officer directly passed the final Assessment order u/s 143(3) read with section 92CA(4) of the Act without passing draft assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a draft assessment order to petitioner and directly passing a final assessment order and without giving petitioner an opportunity to raise objection before the DRP, there is a complete contravention of section 144C(1). The Assessing Officer having wrongly assumed jurisdiction to straight away pass the final assessment order. This is not a mere irregularity, but an incurable illegality. Even the provisions of section 292B of the Act would not curate such an order as section 292B of the Act cannot read to confer jurisdiction on the Assessing Officer where non exist." 12.1 The Hon'ble jurisdictional High Court in the case of Principal Commissioner of Income-tax Vs Andrew Telecommunications Pvt Ltd (2018) 96 taxmann.com 613 (Bom) also dealt with identical issue and framed the following questions : "It is a settled law that mere wrong reference to a provision in the order cannot be determinative of the source of power, question, which, therefore, questions arises for consideration are as follows:- (1) What was the effect of not issuing the draft assessment order by the AO; (2) When the proceedings were remanded, whether a draft assessment order was required to be issued; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the identical issue wherein the Assessee has accepted that it does not wish to challenge the passing of the draft assessment order, the Hon'ble Court has clearly laid down that there can be no estoppels on the issue of law pertaining to jurisdiction and if the order passed by the Assessing Officer is without jurisdiction, the same can be raised at any time and the principle of estoppels will not apply. Mere consent of parties does not bestow jurisdiction, if the order is beyond jurisdiction. 13.1 We also observe that the Hon'ble co-ordinate Bench of the Tribunal at Kolkata in the case of Linc Pen & Plastics Ltd vs DCIT (2023) 148 taxman.com 273 (Kol-Trib) has also dealt with the identical issue, wherein the Assessee has specifically stated before the Assessing Officer "that they do not intend to exercise the option available under section 144C to file objections before the Ld.DRP", therefore, in view of the aforesaid waiver of the Assessee, the Assessing Officer passed the final order without making any draft assessment order. The co-ordinate bench of the Tribunal by respectfully following the judgment of the Calcutta High Court in the case of CIT Vs Bhaskar Mittal (1994) 73 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then it amounts to allow "Unjust enrichment". Nonetheless whatsoever it may be, as it is mandate of law and also well settled by Hon'ble High Court that as per the provisions of section 144C (1) of the Act, before passing a final order under section 144C(13), the Assessing Officer shall notwithstanding anything to the contrary contained in this Act, if he proposes to make any variation which is prejudicial to the interest of such Assessee, then in the first instance, is required to pass a draft proposed order of the assessment. There is no estoppel against the issue of law or jurisdiction of the authorities and waiver/undertaking of party(ies) cannot bestow the jurisdiction which is otherwise do not exist and also can not bypass the procedure established by law. Hence we are of the considered view, that the final assessment order dated 13/03/2015 u/s 143(3) read with section 92CA(4) of the Act passed by the Assessing Officer, without passing the draft assessment order as prescribed u/s 144C(1) of the Act, is without jurisdiction and void-ab-initio. Hence, the assessment order itself is quashed. 15. As we have already quashed the assessment order, and therefore, not delving into t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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