Tribunal sets aside assessment, remands for fresh adjudication under Section 144C of the Act.

The Tribunal clarified that its earlier order had set aside the assessment proceedings, requiring the AO to restart the assessment process afresh. The Tribunal found that the fresh directions by the DRP and subsequent order by the AO were based on a misinterpretation of its earlier order, thus setting them aside. The matter was remanded back to the AO for fresh adjudication following the procedure under Section 144C of the Act, allowing the appeal of the assessee for statistical purposes.

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Issues Involved:
1. Limitation and assumption of jurisdiction by the Assessing Officer (AO) in passing the assessment order.
2. Validity of the assessment order dated 31.12.2017.
3. Clarification of the Tribunal's order dated 29.07.2016.
4. Validity of the directions issued by the Dispute Resolution Panel (DRP) and the subsequent order by the AO.

Summary:

Issue 1: Limitation and Assumption of Jurisdiction by the AO
The appellant argued that the assessment order dated 31.12.2017 relied on an earlier assessment order dated 21.01.2016, which had been set aside by the ITAT. The appellant claimed that the new order was without legal authority as it was based on a nullified order.

Issue 2: Validity of the Assessment Order Dated 31.12.2017
The appellant contended that the impugned order dated 31.12.2017 was not a valid assessment order under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961. They argued that it was a non-speaking order and lacked jurisdiction.

Issue 3: Clarification of the Tribunal's Order Dated 29.07.2016
The Tribunal had previously remanded the issue of Arms Length Price (ALP) to the DRP, stating that the DRP's order was non-speaking and inconsistent with Section 144C of the Act. The Tribunal had directed the DRP to pass a speaking order on the disputed issues.

Issue 4: Validity of Directions Issued by the DRP and Subsequent Order by the AO
The DRP issued directions on 28.12.2017, stating that there was no provision under the Act for the ITAT to set aside an assessment order directly to the DRP. Consequently, the AO passed an order on 31.12.2017, which the appellant challenged as being without jurisdiction and based on a misinterpretation of the Tribunal's earlier order.

Tribunal's Findings:

Clarification of Tribunal's Order Dated 29.07.2016
The Tribunal clarified that its earlier order dated 29.07.2016 had indeed set aside the assessment proceedings, requiring the AO to restart the entire assessment process afresh in accordance with Section 144C of the Act.

Validity of Fresh Directions by the DRP and Subsequent Order by the AO
The Tribunal found that the fresh directions issued by the DRP on 28.12.2017 and the subsequent order by the AO on 31.12.2017 were based on a misinterpretation of the Tribunal's earlier order. Consequently, both the DRP's directions and the AO's order were set aside.

Conclusion:
The Tribunal remanded the matter back to the AO for fresh adjudication, directing the AO to follow the procedure prescribed under Section 144C of the Act. The appeal of the assessee was allowed for statistical purposes.

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