Draft assessment order cannot be finalised while DRP objections remain pending under Section 144C.

Objections filed under Section 144C(1) against a draft assessment order must be considered by the Dispute Resolution Panel before final assessment is completed. Where the objections were already pending before the DRP and the assessing officer proceeded to pass the assessment order meanwhile, the continuation of proceedings caused serious prejudice, particularly in a transfer pricing matter. The assessment order was therefore quashed, and the assessing officer was directed to await the DRP's decision before passing a fresh order.

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Issues: Whether the assessment order could be sustained when objections against the draft assessment order had already been filed before the Dispute Resolution Panel and were pending consideration.

Analysis: The petitioner had filed objections to the draft assessment order under Section 144C(1) of the Income-tax Act, 1961, and there was evidence that the Dispute Resolution Panel had received them. Although the assessee ought to have informed the assessing authority that objections had been filed, the assessment order was passed thereafter. The continuation of assessment proceedings while the objections remained pending before the Dispute Resolution Panel was held to cause serious prejudice, especially where transfer pricing variations were proposed.

Conclusion: The assessment order was not sustainable and was quashed. The assessing officer was directed to await the decision of the Dispute Resolution Panel before passing a fresh assessment order.

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