Binding DRP directions under section 144C required conformity; non-compliant final assessment order was quashed.

A final assessment order under section 144C was invalid because the Assessing Officer did not conform to the Dispute Resolution Panel's binding directions. Section 144C(10) makes those directions binding, and section 144C(13) requires the final order to be passed in conformity with them. The non-compliance was treated as a clear statutory violation, so the order could not be sustained and was quashed. The transfer pricing grounds were left open as academic.

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Issues: Whether the final assessment order was valid when passed without conforming to the Dispute Resolution Panel's directions under section 144C of the Income-tax Act, 1961, and whether the resulting order was liable to be quashed.

Analysis: The final assessment order was passed by ignoring the directions issued by the Dispute Resolution Panel. Section 144C(13) requires the Assessing Officer to pass the final assessment order in conformity with those directions, and the directions are binding under section 144C(10). Non-compliance with the binding directions was held to be a clear statutory violation. Following binding jurisdictional precedent, the order could not be sustained, and the other transfer pricing grounds were left open as academic.

Conclusion: The final assessment order was held invalid for non-conformity with the Dispute Resolution Panel's directions and was quashed, in favour of the assessee.

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