HSI AUTOMOTIVES PRIVATE LIMITED,CHENNAI vs. DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1(1), CHENNAI

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ITTPA 26/CHNY/2026Status: DisposedITAT Chennai28 April 2026AY 2022-2315 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the final assessment order dated 19.12.2025 was passed in defiance of the binding directions of the DRP, constituting a gross violation of Section 144C(13) of the Act. The AO was duty-bound to complete the assessment in conformity with the DRP's directions. The fact that the TPO passed an order giving effect to the DRP's directions on 29.12.2025, which reduced the TP adjustment, clearly indicated that the AO's final assessment order did not incorporate these directions. This omission vitiates the final assessment order, rendering it void in the eyes of law. The Tribunal relied on the decisions of the Hon'ble Delhi High Court in *ESPN Star Sports Mauritius S.N.C. ET Compagnie v. UoI* and the Hon'ble Madras High Court in *CIT v. Sanmina SCI India (P.) Ltd.*. Consequently, the final assessment order was quashed. Since the legal issue was decided in favor of the assessee, other grounds were considered academic and not adjudicated. The appeal filed by the assessee was allowed, and the Stay Petition was dismissed as infructuous.

What were the facts?

The assessee, M/s. HSI Automotives Pvt. Ltd., filed an appeal against the final assessment order for Assessment Year 2022-23, passed by the DCIT. The appeal also included a Stay Application. The core of the dispute revolves around the Assessing Officer's (AO) final assessment order dated 19.12.2025, which the assessee contends was not passed in conformity with the directions of the Dispute Resolution Panel (DRP). The DRP had issued directions on 11.12.2025, granting partial relief to the assessee. The AO passed the final assessment order within eight days of receiving the DRP's directions, and prior to the Transfer Pricing Officer (TPO) issuing an order giving effect to the DRP's directions. The TPO's order giving effect was passed later on 29.12.2025, indicating a reduction in TP adjustment by ₹24,21,867/-.

What were the issues?

1. Whether the final assessment order passed by the Assessing Officer (AO) is void and nullity in the eyes of law for not being passed in conformity with the directions of the Dispute Resolution Panel (DRP) as envisaged under Section 144C(13) of the Income Tax Act, 1961? (Question of law) Assessee's Contention: The AO's failure to pass the final assessment order in conformity with the DRP's directions renders the order void. The AO passed the order within eight days of receiving the DRP's directions, without awaiting the TPO's order giving effect, which is arbitrary and a violation of the Rule of Law and Article 14 of the Constitution of India. Reliance was placed on *ESPN Star Sports Mauritius S.N.C. ET Compagnie v. UoI* and *CIT v. Sanmina SCI India (P) Ltd.*. Revenue's Contention: The error in passing the final assessment order not in conformity with the DRP's directions is curable and not fatal to the assessment proceedings. Reliance was placed on *Honda R & D (India) Private Limited*, *Hitachi Astemo Haryana Private Limited*, *SG Asia Holdings India Private Limited*, *Fiberhome India Pvt. Ltd. vs. National E-Assessment Centre*, *SRF Ltd. Vs. National Faceless Assessment Centre, Delhi*, and *Anand NVH Products (P.) Ltd. vs. National e-Assessment Centre Delhi*.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C,Section 144C(1),Section 144C(3),Section 144C(5),Section 144C(10),Section 144C(13),Section 92CA,Section 153

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & MS. PADMAVATHY. S

Hearing: 04.03.2026Pronounced: 28.04.2026

आदेश / O R D E R PER ABY T. VARKEY, JM: IT (TP) A No.26/Chny/2026 is an appeal & SA No.68/Chny/2026 is a Stay Application are preferred by the assessee against the final assessment order dated 19.12.2025 vide DIN No.ITBA / AST / S / 143(3) / 2025-26 / 1083887111(1) for AY 2022-23.

IT (TP) A No.26/Chny/2026 & SA No.68/Chny/2026 (AY 2022-23) HIS Automotives Pvt. Ltd. :: 2 ::

2.

The assessee has, inter-alia, raised a legal issue/ground assailing the final assessment order framed u/s.143(3) r.w.s.144C(3) r.w.s.144B of the Income Tax Act, 1961 (hereinafter referred to as "the Act”) on the ground that the same was not passed in conformity with the directions of the Dispute Resolution Panel (hereinafter referred to as ‘DRP‘) as envisaged u/s.144C(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:

IT (TP) A No.26/Chny/2026 & SA No.68/Chny/2026 (AY 2022-23) HIS Automotives Pvt. Ltd. :: 3 :: Section 144C [ Reference to dispute resolution panel] (1) ….. (2) ….. (3) ….. (4) ….. (5) ….. (6) ….. (7) ….. (8) ….. (9) ….. (10) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer. (11) ….. (12) ….. (13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained in section 153, the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received.

4.

According to the Ld.AR, if the AO doesn’t pass the final assessment order in conformity with the directions passed by the DRP, the impugned action of the AO passing the final assessment order which in this case is dated 19.12.2025 is void; and for such a proposition cited the decision of the Hon’ble Delhi High Court in the case of ESPN Star Sports Mauritius S.N.C. ET Compagnie v. UoI [2016] 388 ITR 383 (Delhi), and also referred to the decision of the jurisdictional High Court in the case of CIT v. Sanmina SCI India (P) Ltd., [2017] 398 ITR 645 (Mad) and other case laws and several other Tribunal decisions placed in Paper Book-I & II and also pointed out that in the present case, the AO had time up to 31st January, 2026, to pass the Final Assessment Order. However, the AO in a whimsical manner, in tearing hurry has passed the impugned Final

IT (TP) A No.26/Chny/2026 & SA No.68/Chny/2026 (AY 2022-23) HIS Automotives Pvt. Ltd. :: 4 :: assessment order within eight (8) days from the date of receipt of DRP direction, without awaiting the giving effect order of the TPO, is bad in law being arbitrary exercise of power, with scant regard for ‘Rule of Law’ and offends Article-14 of the Constitution of India and hence, impugned assessment order is a nullity in the eyes of law.

5.

Per contra, the Ld.DR submitted that that the error in passing the final assessment order not in conformity with the directions of the DRP direction was curable in nature and not fatal to the assessment proceedings. In support of this contention, the Learned DR placed reliance on the following judicial precedents - • Honda R & D (India) Private Limited (ITA 376/Del/2015) • Hitachi Astemo Haryana Private Limited (ITA No. 1005/Del/2022) • SG Asia Holdings India Private Limited (Civil Appeal No. 6144 of 2019 and SLP(C) No. 12126 of 2019) 6. The Ld. DR placing reliance on the following decisions submitted 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).

IT (TP) A No.26/Chny/2026 & SA No.68/Chny/2026 (AY 2022-23) HIS Automotives Pvt. Ltd. :: 5 ::

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 every judicial precedent relied upon by the Learned DR. The relevant extract from the order is provided below – Pg 10, Para 19 of Annexure 1 “19.It is submitted that Hon'ble Tribunal in Jubilant Foodworks (supra) relied upon order passed in Honda R&D Pvt. Ltd. vs DCIT, ITA No.376/Del/2015. It is submitted that Honda R&D (supra) was challenged before Hon'ble Delhi High Court in ITA 33/2025. The appeal is admitted by Hon'ble High Court vide order dated 04.03.2025 and Hon'ble Tribunal order and any pursuant proceedings have also been stayed by Hon'ble High Court.” Consequently, the Hon’ble Tribunal, after due consideration, held that the final assessment order passed was invalid, observing as under- Pg 11, Para 21 of Annexure 1 “21. ….Therefore, respectfully following the decision of the Hon’ble Jurisdictional High Court in the case of ESPN Star Sports Mauritius S.N. C. E. T. Compagnie V. Union of India (388 ITR 383) and the decision of the coordinate Bench in the case of Global One India Private Limited Vs. DCIT (182 ITD 355) we hold that the final assessment order passed by the AO u/s.143(3) r.w.s. 144C(3) r.w.s. 144B dated 28.10.2024 which was passed without incorporating the direction of the DRP is bad in law, null and void. Accordingly the same is hereby quashed. The case laws relied on by the Ld. DR are distinguishable on facts and, therefore, they are not applicable to the fact situation of the present assessee. Ground No.1 and 2 of grounds of appeal of the assessee are allowed.” Further, the Delhi ITAT ruling in the case of Hitachi Astemo Haryana Private Limited (ITA No. 1005/Del/2022), relied upon by the Learned DR, derives its force from the following rulings, all of which have been clearly discussed in the decision of Spectro Analytical Labs Private Limited. The same are set out below along with references to the relevant extracts from the judgment.

IT (TP) A No.26/Chny/2026 & SA No.68/Chny/2026 (AY 2022-23) HIS Automotives Pvt. Ltd. :: 6 :: • Fiberhome India Private Limited vs. Assessment Centre (W.P.(C) 11609/2021 & CM Nos.35897-98/2021) (Pg 6, Para 13 of Annexure 1) • SRF Limited Vs. National Faceless Assessment Centre, Delhi (W.P.(C) 6484/2021) (Pg 7, Para 13 of Annexure 1) • Anand NVH Products Private Limited vs. National e-Assessment Centre Delhi (W.P.(C) 7936/2021) (Pg 7, Para 13 of Annexure 1)

8.

Further, according 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 Hon'ble Tribunal has accepted the Department's prayer for remand by relying on Hon'ble Delhi High Court's judgment in SRF vs NFAC, Delhi, [2021] 129 taxmann.com 174 (Del.) and Anand NVH Products Ltd. vs NE Assessment Centre, Delhi, WP(C) 7936/2021. Ld. Counsel for assessee submitted that

IT (TP) A No.26/Chny/2026 & SA No.68/Chny/2026 (AY 2022-23) HIS Automotives Pvt. Ltd. :: 7 :: Jubilant Foodworks (supra) does not lay down the correct law. Firstly, it fails to distinguish any of the judicial precedents relied upon by the assessee counsel, as mentioned in para 7 of said order. Further, judgments in the case of SRF (supra) and Anand NVH (supra) have been rendered in relation to a distinctly different issue/ facts. The issue before Hon'ble Delhi High Court in both of these cases as well as in Fiberhome India (P.) Ltd. v. Assessment Centre, (2022) 444 ITR 237 (Delhi) relied upon by Ld. DR, was about passage of final assessment order while the objections of assessee were pending before DRP. Without overly emphasizing on the fact that the above judgments were rendered in context of circumstances which existed during COVID-19 pandemic, it is submitted that Hon'ble High Court allowed assessing officer a second opportunity to pass final assessment order in conformity with DRP directions, solely as the limitation for doing the same was still running and had not expired. This is not the situation in the case of the present Assessee, as limitation for passing final assessment order in conformity with DRP's directions has already expired. Ld.Counsel for the Assessee reiterated that transfer pricing order giving effect to DRP directions has not been passed till date.

Further, the decision of the Hon’ble Supreme Court relied upon by the Learned Departmental Representative is also clearly distinguishable. The said ruling arose in the context of appellate proceedings before the Commissioner of Income-tax (Appeals) and did not involve the statutory scheme under section 144C of the Income-tax Act, 1961. Consequently, the provisions governing DRP proceedings were not applicable in that case and the said judgment has no application to the facts of the present case.

9.

Heard both parties. In order to appreciate the legal issue that has been raised before us, we note the relevant facts pertaining to legal issue are that the assessee-company manufactures and then sell rubber products such as low-pressure hose, rubber profiles, weather strips 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 ₹5,49,99,937/-.

IT (TP) A No.26/Chny/2026 & SA No.68/Chny/2026 (AY 2022-23) HIS Automotives Pvt. Ltd. :: 8 :: 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 ₹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 ₹10,18,31,781/- in place of assessee’s returned income of ₹5,49,99,937/- as under: Returned income/loss ₹5,49,99,937/- Add: (Adjustment made by the Transfer ₹4,68,31,844/- Pricing Officer u/s.92CA of the Act) Total taxable income ₹10,18,31,781/-

11.

Aggrieved by the draft assessment order on the above adjustment/addition, the assessee filed its objections before the Ld. Dispute Resolution Panel (DRP) on 21.04.2025. During the course of the proceedings before the Ld.DRP (as well as before the TPO), one of the contentions raised by the assessee was on the selection of comparable companies. During the hearing dated 6th October 2025, the Ld.DRP observed that only those comparables which formed part of the search

IT (TP) A No.26/Chny/2026 & SA No.68/Chny/2026 (AY 2022-23) HIS Automotives Pvt. Ltd. :: 9 :: matrix adopted by the TPO could be considered for inclusion, subject to satisfying comparability parameters. Accordingly, the Ld.DRP directed the TPO to furnish the search matrix to the Assessee for purpose of identifying additional comparable companies. The Ld. DRP further clarified that, upon receipt of the search matrix, the Assessee would be allowed to submit its comments thereon and propose additional comparable companies based on an analysis of the said search matrix. Pursuant thereto, the TPO, vide email dated 15 October 2025, furnished the search matrix to the Assessee. Upon a detailed examination and analysis of the search matrix so provided, the Assessee filed its detailed submissions dated 27 October 2025, seeking inclusion of the following three additional comparable companies. The business description of the companies are also provided below to demonstrate the comparability. S. No Name of company Business Description 1 Eastern Treads Limited Engaged in manufacturing of tread rubber, rubber-based adhesives, tyre retreading accessories & retreading services. 2 Vamshi Rubber Limited Manufacturer of rubber products and tyre retreading materials. 3 Kokoku Intech India Private Engaged in manufacturing high-precision Limited rubber/plastic parts for automotive use.

12.

Subsequently, the TPO accepted the above comparable companies and issued a Remand-Report dated 28 October 2025 stating that the contentions of the Assessee have been accepted and the above companies were included as part of final comparable list.

IT (TP) A No.26/Chny/2026 & SA No.68/Chny/2026 (AY 2022-23) HIS Automotives Pvt. Ltd. :: 10 :: TPO's comment: The submission with regard to additional comparables chosen by the assessee has been perused. The assessee company M/s. HSI Automotive Private Limited is in the manufacturing of rubber product (specially used in automotive industry). The additional comparables chosen by the assessee are in similar activities and are chosen from the search matrix provided by this office, wherein these comparables are passing 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 ₹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 Variation in respect of issue (Adjustment made Rs. 4,68,31,844/- by the Transfer Pricing Officer under section 92CA of the Act) 4 Total taxable income Rs. 10,18,31,781/-

The AO is noted to have confirmed the additions/disallowances made in the draft assessment order u/s.144C(1) as mentioned above without

IT (TP) A No.26/Chny/2026 & SA No.68/Chny/2026 (AY 2022-23) HIS Automotives Pvt. Ltd. :: 11 :: giving effect to the directions of the DRP wherein the assessee was provided partial relief (supra), which facts are discernable from the subsequent order passed by the TPO as noted (infra). The TPO passed the order giving effect thereto on 29.12.2025 and duly included the three comparable companies in the final set of comparables. An extract of the order is provided below- 4. The details regarding additional comparables were called for from the assessee. The assessee vide response dated 24.12.2025 furnished the copy of annual reports of additional comparables submitted during the preceding before Ld. DRP. 5. As discussed above, to give effect the directions of Ld. DRP, revised final list of comparable (including 03 additional comparable of the assessee-since they have passed all the filters) along with their PLI (as per annual report) is tabulated as below:

15.

Therefore, from the above, it is clear that the Ld. DRP, vide its directions dated 11.12.2025, had specifically directed the TPO to include the aforesaid three additional comparable companies, subject to verification of comparability. The said directions were duly complied with by the TPO, and the three companies were included in the final set of comparables, as reflected in the giving effect order of TPO dated 29.12.2025. 16. Consequently, inclusion of these additional comparables reduced the median margin of comparable companies, thereby granting relief to the assessee and restricted the adjustment to ₹4,44,09,977/- in place of ₹4,68,31,844/- as held by the AO in his final assessment.

IT (TP) A No.26/Chny/2026 & SA No.68/Chny/2026 (AY 2022-23) HIS Automotives Pvt. Ltd. :: 12 ::

17.

Hence, it can be seen that the AO, while passing the final assessment order, retained the same transfer pricing adjustment of ₹4,68,31,844/- proposed in the draft assessment order dated 24 March 2025 in complete disregard of the directions of the DRP. However, the TPO, while passing the giving effect order to DRP directions restricted the TP adjustment to ₹4,44,09,977/-. 18. Aggrieved by the impugned action of AO passing the final assessment order as not in consonance 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

IT (TP) A No.26/Chny/2026 & SA No.68/Chny/2026 (AY 2022-23) HIS Automotives Pvt. Ltd. :: 13 :: 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 on 29.12.2025, which clearly shows that the TP adjustment inter-alia has been reduced, and the TPO is noted to have reduced adjustment to the tune of ₹24,21,867/-. Therefore, the action of the AO passing the final assessment order is noted to be not in conformity with the directions given by the DRP which is found to have been passed in violation of sub-section 10 & 13 of Section 144C of the Act, which omission vitiates the final assessment order dated 19.12.2025 and is held to be void in eyes of law. For such a proposition, we rely on the decision of the Hon’ble Delhi High Court in the case of ESPN Star Sports Mauritius S.N.C. ET Compagnie v. UoI [2016] 388 ITR 383 (Del.) and by the Hon’ble Madras High Court in the case of CIT v. Sanmina SCI India (P.) Ltd. [2017] 398 ITR 645 (Mad.) and also in the case of Comparex India (P.) Ltd. v. ITO [2024] 166 taxmann.com 720 (Delhi- Trib.)

IT (TP) A No.26/Chny/2026 & SA No.68/Chny/2026 (AY 2022-23) HIS Automotives Pvt. Ltd. :: 14 :: 20. In the case of ESPN Star Sports Mauritius S.N.C. ET Compagnie (supra), the Hon’ble Delhi High Court held at Para No.29 to 32 as under: 29. The above submissions have been considered. In the first place the Court would like to observe that this is an instance of blatant disregard by the AO of the order of the DRP notwithstanding that the DRP had categorically held that the two Petitioners do not satisfy the conditions of an 'eligible assessee' in terms of Section 144(15)(b)(ll) of the Act. As already noticed under Section 144C(10) of the Act the AO had no option but to comply with the order of the DRP. Even if no direction was issued by the DRP under Section 144C(5) of the Act, the fact that the DRP held that both the Petitioners were not 'eligible Assessees' could not have been ignored by the AO. 30. It appears to the Court that it is plain that under Section 144C, the AO should have proceeded to pass an order under Section 143(3) of the Act. Instead the AO confirmed the draft assessment order passed under Section 144C(1) of the Act. This, therefore, vitiated the entire exercise. The Court has no hesitation in holding that the final assessment order dated 28th January, 2015 is without jurisdiction and null and void. The draft assessment order dated 28th March, 2014, having been passed in respect of entities which were not 'eligible assessees', is also held to be invalid 31. It is a matter of concern that the AO has in the present case has chosen to label the order of the DRP to be invalid and that is the justification for not complying with the said order. As already noticed, the DRP, in terms of Section 144C(15)(a) is a collegium of three Principal Commissioners or the Commissioner of Income Tax. The DRP admittedly is the superior authority in relation to an AO who in this case appears to be Additional CIT. Section 144C(10) read with Section 144C (13) makes it abundantly clear that there is no option with an AO but to be bound by orders and subject to review by the DRP. It is bound by the DRP. A reference may also be made to the decision in Zuari Cement Ltd. (supra) where it was held that an order of assessment which is contrary to the mandatory provisions of Section 144C of the Act was declared as "one without jurisdiction, null and void and unenforceable." It is therefore, for this reason, in the said case, the High Court of Andhra Pradesh set aside the impugned order while allowing the writ petition notwithstanding that the Petitioner had a statutory remedy available to it. 32. The situation as far as the present case is concerned is no different. The said order of the Andhra Pradesh High Court was upheld by the order of the Supreme Court when it dismissed Special Leave Appeal (Civil) 16694 of 2013 by its order dated 27th September, 2013.

21.

In the light of the discussion (supra), it is found that the AO in defiance to the binding directions of the DRP has passed the final assessment order dated 19.12.2025, which is in gross violation of Section 144C(13) of the Act, making it arbitrary, which action vitiates the passing

IT (TP) A No.26/Chny/2026 & SA No.68/Chny/2026 (AY 2022-23) HIS Automotives Pvt. Ltd. :: 15 :: of the impugned assessment order dated 19.12.2025 and is therefore held to be passed wholly without jurisdiction and hence is null in the eyes of law. 22. Since legal issue has been answered in favor of assessee, hence, other grounds raised are academic and so, not adjudicated.

23.

In the result, appeal filed by the assessee is allowed and Stay Petition filed by the assessee is dismissed as infructuous.

Order pronounced on the 28th day of April, 2026, in Chennai. Sd/- Sd/- (प�ावती .एस) (एबी टी. वक�) (PADMAVATHY. S) (ABY T. VARKEY) लेखा सद�य/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER चे�नई/Chennai, �दनांक/Dated: 28th April, 2026. TLN आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Assessee 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

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