2021 (11) TMI 74

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....w, the order passed by the learned Deputy Commissioner of Income Tax - 9(1)(1), Mumbai ["the AO" for short] u/s 143(3) rws 254 of the Act and as upheld by the Ld. Commissioner of Income Tax (Appeals)-55, Mumbai ["the CIT (A)" for short] is bad in law and void. 1.2 While so upholding the order of the Ld. AO, the Ld. CIT (A) erred in not appreciating that it was mandatory on the part of the Ld. AO to pass a draft order as contemplated u/s 144C of the Act in the first instance and only then the final order could have been passed failing which the final order passed is bad in law and void. 2.1 In the facts and circumstances of the case and in law, the Learned Transfer Pricing Officer ["the TPO"] erred in rejecting the comparable namely BCC ....

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....) and being unsuccessful, preferred further appeal before the Tribunal. While deciding assessee's appeal in ITA No. 6490/Mum/2012 dated 29.11.2013, the Tribunal set aside the issue relating to the Transfer Pricing adjustment back to the AO for afresh adjudication. The AO again referred the matter to the TPO to carry out the direction of the Tribunal. Though, the TPO partially reduced the adjustment made earlier, nonetheless, he again proposed an adjustment to the ALP. Based on the adjustment proposed by the TPO, the AO has passed the impugned assessment order under section 143(3) r.w.s. 254 of the Act adding back the adjustment proposed by the TPO. 5. Shri Y.P. Trivedi, learned senior counsel for the assessee submitted, instead of proposin....

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....O proposes to make any variation to the income of the assessee which is prejudicial to assessee's interest, then, he has to forward a draft of the proposed order of assessment. It is to be noted that sub-section (1) of section 144C begins with a non-obstante clause, thereby, overriding all other provisions of the Act. Undisputedly, the conditions of section 144C(1) of the Act are satisfied in case of the present assessee, as, the assessee has entered into international transaction with the AE and there is a variation to the income which is prejudicial to the interest of assessee. In fact, initially, based on the adjustment proposed by the TPO, the AO had framed the draft assessment order and ultimately the Tribunal restored the issue back t....