Binding Dispute Resolution Panel directions must be followed in final assessment orders; non-conforming transfer pricing orders are void ab initio.

Under the special procedure in section 144C, the Dispute Resolution Panel's directions are binding on the Assessing Officer, and the final assessment order must conform to them within the prescribed time. Where the final order retains the original transfer pricing adjustment instead of giving effect to the relief granted by the Panel, and is passed before the consequential transfer pricing order is issued, the order is legally unsustainable. The Tribunal therefore treated the final assessment order as void ab initio and quashed it, while leaving the merits of the additions undecided and dismissing the related grounds as infructuous.

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Issues: Whether the final assessment order was unsustainable for not being passed in conformity with the directions of the Dispute Resolution Panel and for having been framed without awaiting the consequential transfer pricing order giving effect to those directions.

Analysis: The assessment was made in a case governed by the special procedure under section 144C of the Income-tax Act, 1961. The directions of the Dispute Resolution Panel were binding on the Assessing Officer under section 144C(10), and the final order was required to be passed in conformity with those directions within the time prescribed under section 144C(13). The record showed that the final assessment order retained the original transfer pricing adjustment instead of giving effect to the relief granted by the Dispute Resolution Panel, and that the order was passed before the transfer pricing order giving effect to the Panel's directions. The Tribunal followed the settled principle that a final assessment order which ignores binding directions under the special procedure is legally unsustainable.

Conclusion: The final assessment order was held to be void ab initio and quashed. The merits of the additions were not adjudicated and the related grounds were dismissed as infructuous.

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