Single draft assessment order rule bars new corporate tax additions beyond binding DRP directions in final assessment

Section 144C requires the Assessing Officer to issue one draft assessment order in the first instance, after which the eligible assessee may object before the DRP. The DRP's directions are binding, and the final assessment must conform to them. The text states that the Assessing Officer cannot issue a fresh or second draft assessment order in the same proceedings to introduce additional corporate tax variations, and cannot make final additions beyond the original draft or outside DRP directions. Additions made in that manner are described as contrary to the statutory scheme, invalid, and liable to be deleted.

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Issues: Whether the Assessing Officer could make corporate tax additions in the final assessment order when those additions were not part of the original draft assessment order and were not covered by any directions of the Dispute Resolution Panel; and whether a second draft assessment order issued after objections before the Panel was valid.

Analysis: Section 144C of the Income-tax Act, 1961 contemplates a single draft assessment order in the first instance, against which the eligible assessee may raise objections before the Dispute Resolution Panel. The Panel's directions are binding on the Assessing Officer, and the final assessment has to be completed in conformity with those directions. The procedure does not permit the Assessing Officer to issue a fresh or second draft assessment order in the same proceedings to introduce additional corporate tax variations after the first draft has already triggered the statutory mechanism. Additions made in the final order beyond the draft order and without DRP directions were therefore contrary to the statutory scheme.

Conclusion: The corporate tax additions made in the final assessment order were held to be illegal and liable to be deleted, and the second draft assessment order was held to be invalid.

Final Conclusion: The appeal succeeded and the assessee obtained relief on the corporate tax issue for the assessment year in question.

Ratio Decidendi: Under section 144C of the Income-tax Act, 1961, the Assessing Officer must proceed on the basis of a single draft assessment order and cannot make additions in the final assessment order beyond the proposed variations or outside the binding directions of the Dispute Resolution Panel.

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