Binding DRP directions under section 144C must be followed in final assessment; non-compliance makes the order void.

Section 144C makes Dispute Resolution Panel directions binding on the Assessing Officer, and the final assessment order must conform to those directions. Here, the assessment orders merely reproduced the DRP directions but did not give effect to them, as the receipts were again added on a substantive basis contrary to the mandated treatment. That non-compliance was a jurisdictional defect and a mechanical exercise of power, so the final assessment orders were held wholly without jurisdiction, void ab initio, and quashed.

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Issues: Whether the final assessment orders were without jurisdiction for failure to implement the directions issued by the Dispute Resolution Panel under section 144C of the Income-tax Act, 1961.

Analysis: The statutory scheme of section 144C makes the directions of the Dispute Resolution Panel binding on the Assessing Officer, and the final assessment must be completed in conformity with those directions. The orders under challenge reproduced the DRP directions but did not give effect to them, since the receipts were again added as fee for technical services fee for included services on a substantive basis instead of being dealt with in the manner directed by the DRP. Such non-compliance amounted to a mechanical exercise and a jurisdictional defect.

Conclusion: The final assessment orders were held to be wholly without jurisdiction and void ab initio, and were quashed.

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