ITAT Quashes Final Assessment Order; AO Exceeded Jurisdiction by Ignoring DRP Directions for 2017-18.

The ITAT allowed the appeal, setting aside and quashing the final assessment order for the assessment year 2017-18. The Tribunal found that the Assessing Officer exceeded jurisdiction by replicating the draft assessment order in the final assessment order, contrary to the DRP's directions. The Tribunal held that the Assessing Officer's actions were unsustainable under the Income-Tax Act, 1961.

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Issues involved: Challenge to final assessment order under Section 143(3) read with section 144C(13) of the Income-Tax Act,1961 for assessment year 2017-18.

Summary:
The appeal was filed by the assessee challenging the final assessment order dated 27.06.2022. The primary issue raised was the non-compliance of the directions of the Dispute Resolution Panel (DRP) by the Assessing Officer. The assessee contended that the final assessment order was invalid as it was passed without following the DRP's directions. The DRP had upheld the assessee's objection regarding the validity of the draft assessment order. The Assessing Officer, however, repeated the draft assessment order in the final assessment order, contrary to the DRP's directions.

The DRP's directions were clear that once the final assessment order had been passed, it could not be annulled, modified, or amended at a subsequent date. The Assessing Officer's replication of the draft assessment order in the final assessment order was deemed to be without jurisdiction or in excess of jurisdiction. The Tribunal held that under the Act, once an assessment order is passed, the Assessing Officer cannot alter it arbitrarily. The Assessing Officer's actions were found to be unsustainable and the assessment order was set aside and quashed. The appeal was allowed based on these findings.

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