Mandatory draft assessment order requirement: final assessment without DRP opportunity was quashed as jurisdictionally defective.

An eligible assessee must first receive a draft assessment order where the proposed variation is prejudicial, so that objections can be raised before the Dispute Resolution Panel. Directly issuing a final assessment order without following that statutory sequence breaches the mandatory faceless assessment framework and the dispute resolution mechanism. The defect is jurisdictional, not a curable irregularity, and the final order cannot be sustained or treated as a draft order for remand. The Bombay HC therefore quashed the impugned assessment for non-compliance with the mandatory draft-assessment procedure.

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Issues: Whether a final assessment order passed without first serving a draft assessment order on an eligible assessee, so as to enable recourse to the Dispute Resolution Panel, is sustainable in law.

Analysis: The assessment scheme applicable to eligible assessees requires the Assessing Officer to first forward a draft assessment order where the proposed variation is prejudicial to the assessee. That procedure is not a mere formality. It confers a substantive right to object before the Dispute Resolution Panel. The direct passing of a final assessment order without serving a draft order violates the statutory sequence and amounts to a breach of the mandatory framework under the faceless assessment provisions as well as the dispute resolution mechanism. Such non-compliance is a jurisdictional defect and not a curable irregularity. The proposed course of treating the final order as a draft order or remanding the matter was not accepted; the impugned order itself could not stand.

Conclusion: The final assessment order was quashed and set aside for failure to follow the mandatory draft-assessment procedure, and the petition was allowed.

Ratio Decidendi: In the case of an eligible assessee, failure to serve a draft assessment order before passing a prejudicial final assessment order violates a mandatory jurisdictional requirement and renders the final order unsustainable.

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