Tribunal Invalidates Assessment Orders for 2007-08, 2009-10, 2010-11 Due to Missing Draft Orders, Upholds Appeals.

The Tribunal declared the final assessment orders for the assessment years 2007-08, 2009-10, and 2010-11 invalid due to the failure to issue draft orders, as required by legal procedure. The omission deprived the appellant of the opportunity to seek redressal from the DRP. Consequently, all appeals were allowed, invalidating the assessment orders.

---

---

Issues:
Validity of final assessment order without passing draft order as mandated procedure.

Analysis:
For the assessment year 2007-08, the appellant challenged the final assessment order passed in remand proceedings without following the required procedure of passing a draft order. The appellant filed its return declaring income, and the draft order proposed additions on account of license fee for CAD/CAM software and services. The Dispute Resolution Panel and the Assessing Officer affirmed the draft order, leading to a final assessment order. The Tribunal allowed the appellant's claim on one issue but remitted the other issue back to the AO for fresh determination. In the subsequent assessment, the AO repeated the addition without passing a draft order, leading to the appellant's appeal. The Tribunal noted that non-passing of the draft order deprived the appellant of approaching the DRP for redressal, citing legal precedents where failure to pass a draft order invalidated the final assessment order. As no draft order was passed in the second round of proceedings, the Tribunal declared the assessment order invalid.

For the assessment years 2009-10 & 2010-11, both parties agreed that the issues were similar to the assessment year 2007-08. Following the same reasoning, the final assessment orders for these years were also declared invalid for not adhering to the statutory requirement of passing draft orders in proceedings following the Tribunal's order remanding the matter to the AO for a fresh decision.

In conclusion, all appeals were allowed based on the invalidity of the final assessment orders due to the failure to pass draft orders as mandated by law. The Tribunal's decision was pronounced on 28th February 2020.

---