DRP directions are binding in final assessment; non-compliance under transfer pricing proceedings renders the order without jurisdiction.

A final assessment order under section 143(3) read with section 144C(3) and section 144B was invalid because it was passed without giving effect to the Dispute Resolution Panel's binding directions. The assessment had moved through the draft order and objections stage, and the directions required verification and inclusion of additional comparables; however, the Assessing Officer completed the final order before compliance and retained the original transfer pricing adjustment. Since sections 144C(10) and 144C(13) require the assessment to conform to the DRP directions, departure from them created a jurisdictional defect. The order was held to be without jurisdiction and null and void in favour of the assessee.

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Issues: Whether the final assessment order passed under section 143(3) read with section 144C(3) and section 144B of the Income-tax Act, 1961, without giving effect to the directions of the Dispute Resolution Panel, was valid in law.

Analysis: The assessment proceeded through a draft order, objections before the Dispute Resolution Panel, and directions requiring verification and inclusion of additional comparables. The Transfer Pricing Officer later gave effect to those directions and reduced the transfer pricing adjustment, but the Assessing Officer passed the final assessment order before that compliance and retained the original adjustment. Under section 144C(10) and section 144C(13) of the Income-tax Act, 1961, the directions of the Dispute Resolution Panel are binding and the assessment has to be completed in conformity with them. The order passed in disregard of those directions was therefore contrary to the statutory scheme and amounted to a jurisdictional defect.

Conclusion: The final assessment order was held to be invalid, without jurisdiction, and null and void; the issue was decided in favour of the assessee.

Ratio Decidendi: A final assessment order passed under section 144C must conform to the binding directions of the Dispute Resolution Panel, and any departure from those directions vitiates the order as being without jurisdiction.

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