SYMBOL TECHNOLOGIES INDIA PRIVATE LIMITED (REFLEXIS SYSTEMS INDIA PRIVATE LIMITED MERGED WITH IT),BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 6(1)(1), BANGALORE

IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER

IT(TP)A No.626/Bang/2026 Assessment Year: 2022-23 M/s Symbol Technologies India Pvt. Vs. The Dy. Commissioner of Ltd., Income Tax, (Reflexis Systems India Pvt. Ltd., Circle – 6(1)(1), merged with Symbol Technologies Bengaluru. India Pvt. Ltd.,) 201 Prestige Sigma, Second Floor, No.3, Vittal Mallya Road, Bengaluru – 560 001. PAN – AAECS 7171 H APPELLANT RESPONDENT Assessee by : Shri Siddesh Chaughale, CA Shri Anuj Gupta, CA and Shri Rahul Gawande, Revenue by : Smt. Divya K.J, CIT (DR) Date of hearing : 03.06.2026 Date of Pronouncement : 18.06.2026 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:

This appeal has been instituted by the assessee against the order of the Ld. AO/TPO u/s 143(3) r.w.s. 144C(13) of the Act dt. 20.12.2025 for the AY 2022-23.

IT(TP)A No.626/Bang/2026 Page 2 of 11 2. In the memo of appeal, the assessee has raised as many as 11 grounds of appeal, which we for the sake of brevity and convenience are not inclined to reproduce the same here.

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IT(TP)A No.626/Bang/2026 Page 3 of 11 6. Aggrieved by the order of the AO, the assessee preferred an appeal before us.

7.1 The assessee submitted that the final assessment order passed by the AO without giving effect to the directions issued by the Ld. DRP is contrary to the mandatory provisions of section 144C(13) of the Act. It was contended that the AO is bound to pass the final assessment order in conformity with the directions of the Ld. DRP and any deviation therefrom renders the assessment order unsustainable in law. Accordingly, it was argued that the impugned final assessment order is void ab initio and liable to be quashed in limine.

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IT(TP)A No.626/Bang/2026 Page 4 of 11 a mistake apparent from the record, which is amenable to rectification u/s 154 of the Act.

8.1 The Ld. DR further submitted that the scope of section 154 extends to correction of patent mistakes of fact or law and reliance was placed on the decisions of the Hon'ble Supreme Court in the cases of S.A.L. Narayan Row v. Ishwarlal Bhagwandas reported in (1965) 57 ITR 149 (SC) and CIT v. Hero Cycles (P.) Ltd. reported in (1997) 228 ITR 463 (SC), as well as the decision of the Hon'ble Karnataka High Court in the case of PCIT v. Stanley Black and Decker India Ltd. reported in (2024) 301 taxman 145 (Karnataka). It was contended that the mistake committed by the AO while giving effect to the directions of the Ld. DRP is a curable irregularity and not a jurisdictional defect rendering the entire assessment void. The Ld. DR also relied upon the decisions of the Delhi Bench of the Tribunal in the cases of Hitachi Astemo Haryana (P.) Ltd. reported in 158 taxmann.com 25 and Honda R&D (India) (P.) Ltd. reported in 168 taxmann.com 505 to contend that the matter may be restored to the file of the AO for passing a fresh order in conformity with the directions of the Ld. DRP. Accordingly, it was prayed that the assessment should not be quashed and, at the highest, the issue may be remanded to the AO for proper implementation of the directions issued by the Ld. DRP.

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IT(TP)A No.626/Bang/2026 Page 5 of 11 assessee, granted partial relief and directed modification of the transfer pricing adjustment, pursuant to which the adjustment stood reduced to Rs. 4,53,11,216.00 only.

9.1 However, on perusal of the final assessment order dated 20.12.2025, we find that the AO failed to give effect to and incorporate the directions issued by the Ld. DRP. The final assessment order proceeds on the basis of the original adjustment proposed by the Ld. TPO and does not reflect the relief granted by the Ld. DRP. Thus, the final assessment order has not been passed in conformity with the directions issued by the Ld. DRP. At this stage, it is relevant to refer to the provisions of section 144C(13) of the Act. The section provides that upon receipt of the directions issued by the ld. DRP, the AO shall complete the assessment in conformity with such directions. The use of the word "shall" clearly shows that the AO is under a mandatory obligation to follow and give effect to the directions of the ld. DRP while passing the final assessment order. The AO has no discretion to ignore or deviate from such directions.

9.2 In the present case, despite the specific directions issued by the Ld. DRP granting relief to the assessee, the AO passed the final assessment order without incorporating the said directions. This action not only amounts to violation of the mandatory provisions of section 144C(13) of the Act but also demonstrates a clear lack of application of mind on the part of the AO while passing the impugned order. Therefore, the final assessment order being contrary to the statutory mandate contained in section 144C(13) of the Act cannot be sustained in law.

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IT(TP)A No.626/Bang/2026 Page 6 of 11 9.3 We find that an identical issue came up for consideration before the Coordinate Bench of this Tribunal in the case of Tavant Technologies India Private Limited v. DCIT in IT(TP)A No. 1582/Bang/2024 dated 05.03.2025, wherein it was held that a final assessment order passed without giving effect to the directions of the ld. DRP is in clear violation of section 144C(10) and section 144C(13) of the Act and is liable to be quashed as void ab initio. The Tribunal, while arriving at the said conclusion, also relied upon the decisions in Xchanging Solutions Ltd., Flextronics Technologies (India) Pvt. Ltd., Software Paradigms Infotech (P.) Ltd., and the judgment of the Hon'ble Karnataka High Court in CIT v. Flextronics Technologies (India) Pvt. Ltd. The relevant para is reproduced below:

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IT(TP)A No.626/Bang/2026 Page 7 of 11 the id AR, is identical to the draft order of assessment passed on 14/3/2013 by only incorporating this TPO's proposals and , thereby evidently giving the DRP's mandatory directions issued u/s 144C(5) of the Act a complete go-by. In our view, it is factually established that the AO in the final order of assessment dated 17/1/2014 has not given effect to or carried out the binding directions of the DRP as required u/s 144C(10) within the time specified u/s 144C(13) of the Act; which is a clear violation of the binding provisions of sec. 144C(10) and (13) of the Act. Therefore, in our considered opinion, the conduct of the AO/TPO in passing the impugned final order of assessment dated 17/1/2014 is a clear case of defiance and disregard to the binding directions of the higher authorities, i.e, the DRP in the case on hand. In fact, in the impugned order dated 17/1/2014 there is not even a single reference to the DRP's directions issued u/s 144C(5) of the Act vide order dated 30/12/2013. 3.3.2 In the factual and legal matrix of the case on hand, as discussed above, we are of the considered view that the impugned final order of assessment for asst. year 2008-09 passed u/s 143(3) r.w.s 92CA of the Act by the AO, in violation of the express mandatory provisions of sec. 144C(10) and (13) of the Act by not passing the impugned order in pursuance of and in conformity with the binding directions of the DRP issued u/s 144C(5) of the Act, within the time specified for this purpose, has rendered the said impugned final order of assessment unsustainable in law. We, therefore, quash the impugned final order of assessment for asst. year 2009-10 passed by the AO u/s 143(3) r.w.s 92CA of the Act dated 17/1/2014 in the case on hand. W hold and direct accordingly. Consequently, ground No. 17 of assessee's appeal is allowed." 10. Respectfully following the aforesaid view of the Tribunal, we quash the impugned order of assessment. Since the impugned order of assessment is quashed on the ground that the same is not in conformity with the provisions of section 144C of the Act and further on the ground that the time for passing the final order of assessment is barred by time, we are of the view that the other issues raised by the assessee in its grounds of appeal and the grounds raised by the revenue in its appeal does not require any consideration. As far as the decision cited by the learned DR in the case of H & M Hennes & Mauritz India (P) Ltd. (supra) is concerned, we find that in the s aid decision, the counsel for the Assessee as in p o the said order prayed for setting as the final order of assessment of AO to pass orders in accordance with the directions of the DRP. Thus, it is a case of concession by the Assessee and not on the basis of arguments advanced by the parties.) The law is well settled that a decision on concession of the counsel cannot be regarded as a precedent. Therefore, the decision cited by the learned DR does not support the case of the revenue.

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IT(TP)A No.626/Bang/2026 Page 8 of 11 11. In view of the conclusion that the assessment order is null and void, the other grounds of appeal raised by the assessee on merits of the addition made do not require any adjudication. 12. In the result, the appeal of the assessee is allowed." In the present case also, as pointed out by the AR, the DRP included Evoke Technologies Limited in the list of comparables and similarly the DRP excluded ICRA Techno Analytics Limited from the list of comparables. The ALP adjustment made by the TPO has been changed on account of these two directions of DRP, however, the Assessing Officer retained the original Transfer Pricing Adjustment at Rs.8,67,23,600 in the final assessment order as made in the draft assessment order. Being so, we are not in a position to uphold the order of the Assessing Officer on this count. As provided in the Section 144C(13) of the Act, the final order of the Assessing Officer should be in conformity with the directions given by the DRP. In the present case, while working out the ALP adjustment, he has not followed the direction of the DRP, consequently, the assessment order is bad in law as held by co-ordinate Bench in the case cited above. Accordingly, the assessment framed in this case is quashed and set aside. However, we make it clear that, this order would not, in any way, stop the revenue from taking such steps as are available to it in law and the assessee also from contesting the action of the revenue in accordance with the law, if it so desires.” 10. In holding so, we also draw support and guidance from the judgment of Karnataka High Court in the case of M/s Flextronics Technologies (India) Pvt. Ltd., in ITA No.332 of 2019 dated 09/01/2023, wherein the question framed stands as under: 2. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that final assessment order as bad on the ground at assessing authority has not passed order as per directions of Dispute Resolution Panel? 3. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in not following the decision of Hon'ble Punjab and Haryana High Court in the case of Des Kul Bhushan (reported in 47 Taxmann 79 (P&H) wherein it is observed that when an assessment order is set aside the limitation gets extended under Section 153(3) of the Act?” 11. The above question was answered by the Hon’ble High Court as detailed below: “6. Shri Suryanarayana is right in his submission that under Section 144C of the IT Act, the Assessing Officer is bound by the directions issued by the DRP and required to pass the assessment order in conformity with the directions issued within one month from the end of month in which such directions are issued.

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IT(TP)A No.626/Bang/2026 Page 9 of 11 7. The ITAT has recorded that impugned order is not in conformity with the provisions of Section 144C of the IT Act and barred by time. 8. Shri Dilip's contention is, the Assessing Officer has rightly passed the order within time. But it is relevant to note that the said order is not in conformity with Section 144C of the IT Act. Hence, no exception can be taken to the impugned order passed by the ITAT.” 12. In view of the above we hold that the final assessment framed by the AO in contravention to the direction of the ld. DRP is not sustainable.

9.4 Respectfully following the aforesaid binding precedents and considering the facts of the present case, we hold that the impugned final assessment order having been passed without incorporating and giving effect to the directions of the Ld. DRP is contrary to the mandatory provisions of section 144C of the Act. Consequently, the impugned final assessment order is rendered unsustainable in law and deserves to be quashed. Accordingly, we hold that the final assessment order passed by the AO is void ab initio and liable to be quashed. Since the assessment itself stands quashed on this legal issue, the grounds raised on merits do not call for adjudication and are left open.

9.5 The Ld. DR, however, contended that the impugned defect is merely a mistake apparent from the record and is rectifiable u/s 154 of the Act. According to the Revenue, the AO had taken cognizance of the directions of the Ld. DRP and the error occurred only while giving effect thereto.

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IT(TP)A No.626/Bang/2026 Page 10 of 11 directions of the Ld. DRP as mandated u/s 144C(13) of the Act. Admittedly, the final assessment order retains the original transfer pricing adjustment proposed in the draft assessment order and does not give effect to the relief granted by the Ld. DRP. Thus, the statutory requirement of passing the final assessment order in conformity with the directions of the Ld. DRP remains unfulfilled. In our considered view, once the final assessment order is found to be contrary to the directions of the Ld. DRP, the same suffers from a jurisdictional defect and cannot be treated as a mere clerical or arithmetical mistake capable of rectification u/s 154 of the Act. The provisions of section 144C(13) of the Act cast a mandatory obligation upon the AO to pass the final assessment order strictly in accordance with the directions of the Ld. DRP. The validity of the assessment order has to be examined with reference to the order actually passed and not on the basis of what the AO intended to pass. Therefore, the plea of the Revenue that the defect is a rectifiable mistake does not come to its rescue. Once the final assessment order has been passed in violation of the mandatory provisions of section 144C(13) of the Act, the same becomes unsustainable in law and cannot be cured by resorting to the provisions of section 154 of the Act.

10.1 The decisions relied upon by the Revenue explain the scope of rectificatory jurisdiction u/s 154 of the Act and the circumstances in which a mistake apparent from the record may be corrected. However, none of those decisions lay down that an assessment order passed in violation of the mandatory requirement contained in section 144C(13) of the Act should nevertheless be treated as valid merely because such defect may be capable of rectification. In our considered view, the existence of a

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IT(TP)A No.626/Bang/2026 Page 11 of 11 rectificatory power cannot validate an order which is otherwise contrary to the express mandate of the statute.

10.2 More importantly, the issue before us stands directly covered by the decision of the Coordinate Bench in Tavant Technologies India Private Limited (supra), which has subsequently received approval from the Hon'ble Karnataka High Court in Flextronics Technologies (India) Pvt. Ltd. (supra). Respectfully following the aforesaid binding precedents, we are unable to accept the plea of the Revenue that the defect in the impugned assessment order is a mere procedural irregularity warranting remand or rectification. Therefore, we do not endorse the argument advanced by the assessee. Hence, the ground of appeal of the assessee is hereby allowed.

Order pronounced in court on 18th day of June, 2026 Sd/- Sd/- (KESHAV DUBEY) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 18th June, 2026 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order

Asst. Registrar, ITAT, Bangalore

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