DRP directions under section 144C must be followed in the final assessment order or the assessment becomes invalid.

An assessment under section 144C is unsustainable where the final order merely reproduces the draft assessment order and does not give effect to the binding directions of the Dispute Resolution Panel. Sections 144C(5), 144C(10) and 144C(13) require the Assessing Officer to frame the final assessment strictly in conformity with those directions. On that basis, the final assessment order was quashed for non-compliance with the mandatory statutory scheme, and the issue was decided in favour of the assessee.

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Issues: Whether the final assessment order was liable to be quashed for not being passed in conformity with the Dispute Resolution Panel directions under section 144C of the Income-tax Act, 1961.

Analysis: The final assessment order was found to be verbatim identical to the draft assessment order and did not refer to or give effect to the binding directions issued by the Dispute Resolution Panel. Sections 144C(5), 144C(10) and 144C(13) require the Assessing Officer to pass the final order in conformity with those directions. Non-compliance with that mandatory scheme rendered the assessment unsustainable in law.

Conclusion: The final assessment order was quashed and the issue was decided in favour of the assessee.

Ratio Decidendi: An assessment order passed under section 144C is invalid if it is not framed in conformity with the binding directions of the Dispute Resolution Panel and merely reproduces the draft order without giving effect to those directions.

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