TaxTMI 
TaxTMI 
2026 (6) TMI 1165
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....(13) of the Act. In order to appreciate the legal issue raised by the assessee, it would be gainful to refer to the relevant date of events in this matter: Sl. No. Date Event 1 ITR filed on 28.11.2022 02.06.2023 notice issued u/s. 143 (2) of the Act 2 18.01.2024 Reference received by the TPO from the AO, Technical Unit u/s. 92CA of the Act 3 10.01.2025 TP order u/s. 92CA(3) of the Act 4 24.03.2025 Draft assessment order u/s. 144C(1) of the Act 5 21.04.2025 Objections raised before the DRP 6 11.12.2025 DRP directions 7 19.12.2025 Final assessment order 8 29.12.2025 TPO giving effect to the DRP directions 9 16.02.2026 Assessee filed appeal before the Tribunal 3. The main grievance of the assessee is that the AO has not given effect to the directions issued by the Ld.DRP while passing the final assessment order as envisaged u/s. 144C(13) of the Act, which reads as under: Section 144C [ Reference to dispute resolution panel] (1) ..... (2) ..... (3) ..... (4) ..... (5) ..... (6) ..... (7) ..... (8) ..... (9....
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....ed that failure on the part of the AO to incorporate direction given by the DRP in the final assessment order is not a fatal error for which the assessment order could be quashed. The Ld. DR submitted that instead such orders have to be set aside to the AO to incorporate the directions of the DRP. Reliance has been placed on the following decisions:- 1. The Hon'ble High Court of Delhi in the case of Fiberhome India Pvt. Ltd. vs. national E-Assessment Centre, Additional /Joint /Deputy /Assistant commissioner of Income Tax, [2022] 136 taxmann.com 260(Delhi). 2. The Hon'ble High Court of Delhi in the case of SRF Ltd. Vs. National Faceless Assessment Centre, Delhi [2021] 129 taxmann.com 174 (Delhi). 3. The Hon'ble High Court of Delhi in the case of Anand NVH Products (P.) Ltd. vs. National e-Assessment Centre Delhi. [2021] 130 taxmnan.com 257(Delhi) 7. Therefore, Ld DR prayed that the action of the AO shouldn't be interfered with. In his rejoinder, the Ld.AR countering the case laws relied by Revenue, submitted that Delhi Tribunal in the case of M/s Spectro Analytical Labs Private Limited (ITA No. 5848/Del/2024)dated 28 January 2026, has addressed each and....
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....ing to the Ld.AR, the other case laws cited by the Ld.DR are not applicable to the case in hand because they are clearly distinguishable on facts. In those cases, the final assessment order was passed without appreciating that the proceedings before the Dispute Resolution Panel were still pending. He pointed out that the factual position in the present case is materially different. Further, these rulings were rendered in the context of COVID-19 pandemic. In the instant matter, the Assessing Officer was fully aware of the directions issued by the DRP and, notwithstanding the same, proceeded to pass the final assessment order in complete disregard of binding directions of DRP. The Ld AR asserted that the impugned order passed in direct contravention of the statutory mandate governing assessments pursuant to DRP directions is bad in law. The relevant extract from the order which addresses this distinction is provided below - Pg 9, Para 18 of Annexure 1 18. It is also submitted by Ld. Counsel that Ld. DR, during the course of his oral submissions, has relied upon the coordinate Bench order in the case of Jubilant Foodworks Ltd. vs ACIT, ITA No. 2310/DEL/2022, wherein ....
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....ps etc. For AY 2022-23, the assessee is noted to have filed its return of income (RoI/ITR) on 28.11.2022 declaring total income of Rs. 5,49,99,937/-. Subsequently, the case was selected for scrutiny under CASS. The case of the assessee was referred to the Transfer Pricing Officer (TPO) by the Assessing Officer, i.e. reference u/s. 92CA(1) of the Act for determination of Arm's Length Price (ALP) with reference to the International Transactions entered with its Associated Enterprises (AE). The TPO is noted to have passed the order u/s. 92CA(3) of the Act on 10.01.2025 proposing downward adjustment of Rs. 4,68,31,844/-. 10. Pursuant to the TPO's order dated 10.01.2025, a draft assessment order u/s. 144C(1) of the Act was passed by the AO on 24.03.2025 and the income of the assessee was determined at Rs. 10,18,31,781/- in place of assessee's returned income of Rs. 5,49,99,937/- as under: Returned income/loss Rs. 5,49,99,937/- Add: (Adjustment made by the Transfer Pricing Officer u/s. 92CA of the Act) Rs. 4,68,31,844/- Total taxable income Rs. 10,18,31,781/- 11. Aggrieved by the draft assessment order on the above adjustment/addition, the assessee filed its o....
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.... all other filters. Therefore, request of the assessee to consider these additional comparable can be entertained and these comparables may be selected additionally in the final list. 13. Consequently, the Ld.DRP, vide its order dated 11.12.2025, issued directions to the TPO. The relevant extract from the Ld.DRP's directions is given below: The submission of the assessee and factual report of the TPO, it is noted that the TPO has not discussed the functionality of the comparable in details. We deem fit to direct the TPO to verify the details far analysis of the comparables from the annual report and discuss the fact in detail of the each comparable while giving the effect to the order and if the comparable found in similar FAR analysis along with the filters applied, the same may be considered accordingly. 14. Further to the directions issued by the DRP, the AO completed the final assessment vide order passed u/s. 143(3) r.w.s. 144C(3) r.w.s. 144B of the Act dated 19.12.2025 assessing the total income of the assessee at Rs. 10,18,51,781/-: 1 Income as per Return of Income filed Rs. 5,49,99,937/- 2 Income as computed u/s. 143(1)(a) - 3 Vari....
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....sonance with the direction of Ld DRP, the assessee has filed the present appeal before us. 19. From the aforesaid facts discussed, it is observed that the AO framed the draft assessment order as per the provisions of Sec. 144C r.w.s. 144B of the Act, on 24.03.2025; and pursuant to the same, the assessee as per the provisions of Sec. 144C(2) of the Act, filed objections against the draft order before the DRP on 21.04.2025. The DRP gave direction to grant part relief to the assessee on the objections filed by the assessee by passing order dated 11.12.2025 u/s. 144C(5) of the Act. And upon receipt of the directions issued under sub-section (5), the AO was duty bound to complete the assessment in conformity with the directions of the DRP. In other words, the AO had to give effect in consonance with the findings and directions given by the DRP in terms of the provisions of sub-section 144C(13) of the Act. Whereas the AO in utter disregard and in defiance to the mandate given under sub-section (13) of Section 144C, had passed the final assessment order ignoring the directions of the Ld.DRP, which fact is discernable from perusal of the TPO giving effect order of the DRP, passed later ....