DAMANDEEP KAUR,MOHALI vs. ASSISTANT COMMISSIONER OF INCOME TAX (CENTRAL CIRCLE-2), CHANDIGARH, CHANDIGARH

Chandigarh University (CU), VPO, Gharuan, NH-95, Chandigarh-Ludhiana Highway, SAS Nagar, Mohali. Note: If digitally signed, the date of digital signature may be taken as date of document. CR BUILDING, HIMALAYA MARG, SECTOR 17-E, CHANDIGARH, CHANDIGARH, Chandigarh (UT), 160017 Note:- The website address of the e-filing portal has been changed from www.incometaxindiaefiling.gov.in to www.incometax.gov.in DIN-Document identification No. Damandeepkour, GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX DCIT/ACIT(CEN)-2 CHD

Chandigarh University (CU), VPO, Gharuan, NH-95, Chandigarh-Ludhiana Highway, SAS Nagar, Mohali. Note: If digitally signed, the date of digital signature may be taken as date of document. CR BUILDING, HIMALAYA MARG, SECTOR 17-E, CHANDIGARH, CHANDIGARH, Chandigarh (UT), 160017 Note:- The website address of the e-filing portal has been changed from www.incometaxindiaefiling.gov.in to www.incometax.gov.in. DIN-Document identification No. Amand incometa

Chandigarh University (CU), VPO, Gharuan, NH-95, Chandigarh-Ludhiana Highway, SAS Nagar, Mohali. Note: If digitally signed, the date of digital signature may be taken as date of document. CR BUILDING, HIMALAYA MARG, SECTOR 17-E, CHANDIGARH, CHANDIGARH, Chandigarh (UT), 160017 Note:- The website address of the e-filing portal has been changed from www.incometaxindiaefiling.gov.in to www.incometax.gov.in. DIN-Document identification No. Damandalam. Higher for AY2016-17 the Assessing Officer had mentioned status of assessee as resident:

Besides the above, the assessee was a Non-Resident within the meaning of Section 6 of the Income-tax Act, 1961 during the Assessment Years under consideration. Section 6 of the Act 1961 as on 01/04/2020 which reads as under:- Residence in India. 6. 23 24 For the purposes of this Act, - (1) An individual is said to be resident in India in any previous year, if he- (a) is in India in that year for a period or periods amounting in all to one hundred and eight-two days or more; or (b) 25[***] (c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year. 26[2Z[Explanation 1.]—In the case of an individual, - (a) being a citizen of India, who leaves India in any previous year2822 [as a member of the crew of an 30Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or] for the purposes of employment28 outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted ; (b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and 31[eighty-two] days" had been substituted 319[and in case of 3199 [the citizen or person of Indian origin] having total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the previous year, for the words "sixty days" occurring therein, the words "one hundred and twenty days" had been substituted].] 32[Explanation 2.—For the purposes of this clause, in the case of an individual, being a citizen of India and a member of the crew of a foreign bound ship leaving India, the period or periods of stay in India shall, in respect of such voyage, be determined in the manner and subject to such conditions as may be prescribed.33]

The assessee's stay in India during each of the relevant financial years was well below the statutory threshold of 182 days. In fact, her stay was exceptionally short in each year, demonstrating that her centre of life, personal residence and economic presence during these years was outside India. The details of stay as independently verified and recorded by the FRRO and the Joint Director (Investigation), Black Money Unit, are summarized hereunder.

In view of the above, it is clear that the assessee did not satisfy the statutory criteria under Section 6 of the Act to be treated as a resident for the relevant years. In our view, this fact has been independently verified and accepted by the Black Money Investigation Wing and the FRRO, whose findings are binding and consistent with the statutory framework of Section 6. The finding of the FRRO and Black Money Investigation Wing is further supported by the document on record which clearly confirms that the assessee was not available in India for more than 182 days and therefore her status has rightly been mentioned as “Non Resident” by the Ld. CIT(A).

Once the assessee is held to be a Non-Resident, she falls squarely within the ambit of an "eligible assessee" under Section 144C(15)(b), and therefore, it was contended by the Ld. AR for the assessee that the newly inserted provision will be applicable to the case in hand.

At the time of dictation of the matter it came to our notice that relevant provision i.e; Section 144C(15B) was inserted in the statute book w.e.f 01/04/2020 and the year under consideration were A.Y. 2016-17 onwards. In view of the above we fixed the matter for clarification on 12/11/2025. 21. Today both parties appeared before us, and have made submissions. The Ld. AR had filed the written submissions which are taken on record. The Ld. AR has further submitted that the present issue is clearly covered by the Hon'ble premium for his mistake / misrepresentation / concealment of the information as the assessee had not submitted at any point of time that the assessee is an NRI.

We have heard the rival contention of the parties and perused the material available on the record as recorded hereinabove, the assessee is an NRI which aspect has been accepted by the Assessing Officer in the years mentioned hereinabove and further the Assessing Officer in the black money case has categorically accepted the status of the assessee an NRI. In view of the above there is no doubt that the assessee is an NRI and therefore the argument of the Ld. DR objecting to the status of the assessee is not sustainable.

Now coming to the issue whether the issuance of draft assessment order is mandatory and in failure to issue the draft assessment order would lead to quashing of the order passe by the Assessing Officer or not. In this regard it would be appropriate to produce the provision of section 144C which provides as under: [Reference to dispute resolution panel. 83 144C. (1) The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward4 a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation 84a[***] which is prejudicial to the interest of such assessee. (2) On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order,— (a) file his acceptance of the variations to the Assessing Officer; or (b) file his objections, if any, to such variation with,— (i) the Dispute Resolution Panel; and (ii) the Assessing Officer. (15) For the purposes of this section,— (a) "Dispute Resolution Panel" means a collegium comprising of three [Principal Commissioners or] Commissioners of Income-tax constituted by the Board1 for this purpose; (b) "eligible assessee" means, — (i) any person in whose case the variation referred to in sub-section (1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of 92CA; and 21a [(ii) any non-resident not being a company, or any foreign company. ]]

From a conjoint reading of the above legal position and the statutory provisions, it is abundantly clear that the Act contemplates the issuance of a draft assessment order in the case of an "eligible assessee." Once the assessee falls within the definition under Section 144C(15)(b) and the Assessing Officer proposes variations prejudicial to their interest, the procedure prescribed under Section 144C becomes mandatory. The scheme encapsulated in Section 144C is not merely directory but mandatory; Section 144C opens with a non-obstante clause that overrides other provisions of the Act. Consequently, the argument that search assessments under Section 153A are special provisions cannot defeat the express, overriding mandate of Section 144C. The non-issuance of a draft assessment order constitutes a fatal and incurable juri ictional defect. We draw strength from the provisions of Section 144C(2), (3), and (4) of the Act. The statute prescribes a strict outer limit for passing the assessment order. Even if the assessee fails to file objections or explicitly accepts the draft order, the Assessing Officer is bound to pass the final assessment order within the time limit provided by the Act. If the Assessing Officer fails to pass the final order within this statutory period-despite the absence of objections—they are precluded from passing any order thereafter. In the present case, the assessment was framed after 01.04.2020 without adhering to the mandatory DRP mechanism, despite the variations proposed. Since the failure to follow the procedure under Section 144C renders the assessment order non est and void ab initio, and any order passed beyond the statutory limitation is bound to be quashed, the impugned assessment order is legally unsustainable and liable to be set aside. Recently, the Hon'ble Bombay High Court in the case of Barentz India (P.)[2025] 179 taxmann.com 582 (Bombay) Ltd.has held as under:

We find that to the provisions of Section 144B(1) and more particularly Sections 144B(1)(xxi) to 144B(1)(xxix), the provisions of Sections 144C have been made applicable. These provisions clearly stipulate that in case of an eligible assessee, a draft assessment order has to be served on the Petitioner to enable the Petitioner to approach the DRP. This, in fact, has not been done in the facts of the present case. In the facts of the present case, a final assessment order has been directly passed by the Faceless Officer without serving a draft assessment order on the Petitioner to enable it to approach the DRP. This is in clear violation not only of the provisions of Section 144C but also of Section 144B(1)(xxi) to (xxix) thereof. Once this is the case, the final assessment order in the above Petition cannot stand and would have to be set aside.

In the view that we take, we are supported by the decision of this Court in the case of Danfoss Fluid Power (P.) Ltd. v. Union of India [2025] 179 taxmann.com 283 (Bombay)/Writ Petition No. 10403 of 2025 decided on 29th September 2025). In the facts of Danfoss (supra), a final assessment order was passed without serving the draft assessment order on the Petitioner. This Court held that the same would clearly be in contravention of the provisions set out in Section 144C. In fact, while deciding the case of Danfoss (supra), this Court relied upon another decision of this Court in the case of SHL(India) Pvt. Ltd. v. Deputy Commissioner of IncomeTax [2021] 128 taxmann.com 426 (Bombay)/[2021] 282 Taxman 334/ 438 ITR 317 (Bombay). The relevant portion of Danfoss (supra) reads thus:- "

We have heard the learned Counsel for the parties. We have also perused the papers and proceedings in the present Writ Petition. It is not in dispute that in the present case, the shares of Danfoss Systems Limited were sought to be purchased by the Petitioner inter alia from a Company in Mauritius, at the price of Rs.363.10 per share. When the Assessing Officer referred the above matter to Transfer Pricing Officer, the Transfer Pricing Officer made a variation to the Arm's Length Price and valued the transaction at Rs.517.82 per share. In other words, he recommended a variation in the Arm's Length Price. In these circumstances, the Petitioner would certainly be an eligible Assessee as contemplated under Section 144C(15)(b) (i) of the IT Act. Since this variation was prejudicial to the interest of the eligible Assessee, it was mandatory for the Assessing Officer, in the first instance, to forward to the Petitioner a draft of the proposed order of assessment as contemplated under Section 144C(1). Only once this draft assessment order was served upon the Petitioner could it then choose, either to file its objections [to the draft assessment order] before the Dispute Resolution Panel (DRP), as contemplated under Section 144C(2), or choose to go by the normal route, i.e. to ask the Assessing Officer to pass a final assessment order and thereafter challenge the same before the CIT [Appeals]. By directly passing a final assessment order without serving a draft assessment order on the Petitioner clearly flies in the teeth of Section 144C. Once this is the case, we find that the assessment order dated 28th March 2025 cannot be allowed to stand and has to be quashed and set aside.

In the view that we take, we are supported by a decision of a Division Bench of this court in the case of SHL (INDIA) PVT. LTD. V. DEPUTY COMMISSIONER OF INCOME-TAX AND OTHERS, [2021] 438 ITR 317 (Bom). The relevant portion of this decision reads thus :- "

Applying the aforesaid principles to the facts of this case, we are of the view that the failure on the part of the Assessing Officer to follow the procedure under Section 144C(1) is not a merely procedural or inadvertent error, but a breach of a mandatory provision. We are also not impressed with the arguments of the Revenue that the Assessing Officer was under pressure of two charges, as there were timelines to adhere to, since the said timelines from time to time have been extended, the most recent one being to September 30, 2021. The Revenue ought to have appreciated that the requirement under Section 144C(1) to first pass a draft Assessment Order and to provide a copy thereof to the assessee is a mandatory requirement which gave substantive right to the assessee to object to any variation, that is prejudicial to it. In this case, the order under Section 92CA(3) of the Income-tax Act, proposed to make an adjustment of Rs.107,454,337/- to the arm's length price considered as Nil by Petitioner and to that extent the said adjustment was evidently prejudicial to the interest of the Petitioner. Depriving Petitioner of this valuable right to raise objection before Dispute Resolution Panel would be denial of substantive rights to the assessee, for which, in our view, the Assessing Officer has no power under the statute, as the provision clearly mandates the Assessing Officer to pass and furnish a draft Assessment Order in the first instance in such a case. The Legislature, in our view, has intended to give an important opportunity to the Petitioner, who is an eligible assessee, which in our view, has been taken away. In our view, failure to follow the procedure under Section 144C(1) would be a juri ictional error and not merely procedural error or a mere irregularity. The Assessment Order has not been passed in accordance with the provisions of Section 144C of the Income-tax Act. This is not an issue, which involves a mistake in the said order, but it involves the power of the Assessing Officer to pass the order. By not following the procedure laid down in Section 144C(1) to pass and furnish a draft Assessment Order to the Petitioner and directly passing a final Assessment Order and without giving the Petitioner an opportunity to raise objections before the Dispute Resolution Panel, there is a complete contravention of Section 144C, the Assessing Officer having wrongly assumed juri iction to straight away pass the final order. This is not a mere irregularity but an incurable illegality. Even the provisions of Section 292B of the Income-tax Act would not protect such an order as Section 292B of the Income- tax Act cannot be read to confer juri iction on the Assessing Officer, where none exists. The Supreme Court decision in the case of ITO v. M. Pirai Choodi; [2011] 334 ITR 262 (SC) referred to in the Revenue's reply is also not applicable to the issue at hand as that was a case where the assessee was not given an opportunity to cross-examine the concerned witness and which assessee also had a statutory appellate remedy which the assessee had failed to avail of, whereas there is no such right available to the Petitioner in this case. In fact, the Petitioner has lost a substantive right due to the failure of the Respondents to pass and forward a draft assessment order in the first instance on 19 a variance, prejudicial to the interest of the Petitioner. In our view, this is clearly a case of juri ictional error. The final assessment order passed by the Assessing Officer stands vitiated on account of lack of juri iction, which is incurable and deserves to be set aside as void ab initio. We, therefore, quash and set aside the impugned assessment order, demand notice and penalty notice, all dated April 6, 2021 for the assessment year 2017-18. The Writ Petition is allowed in the above terms. However, there shall be no order as to costs."

In view of the foregoing discussion, the impugned assessment order dated 28th March 2025 is hereby quashed and set aside.

As far as the prayer for remand is concerned, we see no reason to remand the matter back to the Assessing Officer. If the Assessing Officer, in law, is entitled to initiate this process again by passing a fresh draft assessment order and serving it upon the Petitioner, they are free to do so if they are entitled to do in law. We have not opined on this aspect of the matter one way or the other. Similarly, Sumitomo Corporation India (P.) Ltd. [2024] 166 taxmann.com 55 (Delhi) Hon'ble Delhi High Corut has held as under:

It becomes pertinent to note that the issue of whether the AO could ignore the requirement of drawing up a draft assessment order and pass a final order and the same being in violation of the procedure contemplated under section 144C appears to have arisen before our Court on previous occasions also. The consistent view which this Court appears to have taken in that respect was that a failure to frame an assessment order in draft would clearly be violative of the mandatory prescriptions of Section 144C and the final order of assessment framed in violation thereof liable to be viewed as a nullity.

This view stands duly expressed in numerous decisions of this Court including those in JCB India Ltd. v. Dy. CIT [2017] 85 taxmann.com 155/251 Taxman 143/398 ITR 189 (Delhi) 2017 SCC OnLine Delhi 10424, Turner International India (P.) Ltd. (supra), Nokia India (P.)Ltd. v. Addl. CIT 2017 SCC Online Delhi 13027, Control Risks India (P.)Ltd. v. Dy. CIT [W.P.(C) No. 5722 of 2017, dated 27-7-2017], Pr. CIT v. CITI Financial Consumer Finance India (P.) Ltd. 2015 SCC Online Delhi 14678 as well as Headstrong Services India (P.) Ltd. (supra).

The decision of Headstrong Services India (P.) Ltd. (supra), while examining the scheme of Section 144C in paragraphs 17 and 18 had held as follows: - "

In the opinion of this court, section 144C is a self contained provision which carves out a separate class of assesses, i. e., "eligible assessee", i. e., any person in whose case the variation arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA. For this class of assessees, it prescribes a collegium of three commissioners, once objections are preferred. The Dispute Resolution Panel's powers are coterminous with the Commissioner of Income-tax (Appeals), including the power to confirm, reduce or enhance the variation proposed and to consider the issues not agitated by the assessee in the objections. In fact, under section 144C, the Dispute Resolution Panel can issue directions as it thinks fit for the guidance of the Assessing Officer to enable him to complete the assessment and the Dispute Resolution Panel can confirm, reduce or enhance the variations proposed in the draft order. It is specifically stipulated in section 144C that every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer. This is akin to the Assessing Officer giving effect to an order passed by the appellate authority or the courts.

Consequently, section 144C envisages a change of forum and it leads to complete cessation of the juri iction of the Assessing Officer on passing of the draft order. Thereafter the Assessing Officer is to give effect to either the direction of the Dispute Resolution Panel or pass an order on acceptance by the assessee. The expression "in the first instance" has been used in section 144C to signify the first step to be taken by the Assessing Officer in a series of acts contemplated by the said section. To accept the appellant's argument would be to permit the Assessing Officer to decide the objections filed by the assessee— which power has been specifically denied by the statute."

It appears that the respondents in Headstrong India had contended that the expression "in the first instance" as appearing was suggestive of the requirement of framing a draft assessment order being obviated in a situation where the assessment proceedings are to be renewed consequent to a remit by the Tribunal.

This submission came to be rejected with the Court in Headstrong Services India (P.) Ltd. (supra) observing thus:- "

The expression "in the first instance" has been used in section 144C to signify the first step to be taken by the Assessing Officer in a series of acts contemplated by the said Section while dealing with the case of an eligible assessee. This Court is further of the view that if the Assessing Officer under section 144C can prepare a draft assessment order only, then by virtue of a remand order which directs the Assessing Officer to decide the matter de novo, the Assessing Officer cannot get the power to pass an assessment order, when there is an objection by the Assessee like in the present case, without reference of the Dispute Resolution Panel which comprises of three Principal Commissioners or Commissioners of Income-tax constituted by the Board.

Now to accept the appellant's argument would be to permit the Assessing Officer to decide the objections filed by the Assessee -which power has been specifically denied by the statute. It is settled law that when a power is given to do certain thing in a certain way the thing must be done in that way or not at all and other methods of performance are forbidden"

The argument of an obligation to frame a draft assessment order and a failure to abide by that process being a mere irregularity came to be stoutly rejected by the Court in Headstrong Services India (P.) Ltd. (supra) as would be evident from the following observations which came to be rendered: - "

The appellant has also contended that the failure to follow the procedure under section 144C of the Act, at the highest, was a procedural irregularity and not an illegality. This issue is no longer res integra. It is now settled law that failure to adhere to the mandatory procedure prescribed under section 144C of the Act would vitiate the entire proceedings and the same cannot be treated as an irregularity/curable defect.

In ESPN Star Sports Mauritius S.N.C. ET Compagnie v. Union of India [2016] 388 ITR 383 (Delhi) this court, after discussing the judgments of the Andhra Pradesh High Court, High Court of Bombay as well as the Madras High Court in Vijay Television Pvt. Ltd. v. DRP [2014] 369 ITR 113 (Mad.) has held that failure to pass a draft assessment order under section 144C(1) of the Act would render the final assessment order without juri iction, null and void and unenforceable. The said view was reiterated by this court in Turner International India Pvt. Ltd. v. Dy. CIT [2017] 398 ITR 177 (Delhi) W. P. (C) Nos.4260 and 4261 of 2015 as well Nokia India Pvt. Ltd. v. Addl. CIT WP (C) No. 3629 of 2017. The relevant portion of the judgment in Turner International India Pvt. Ltd. (supra) is reproduced hereinbelow (page 180 of 398 ITR) : "The question whether the final assessment order stands vitiated for failure to adhere to the mandatory requirements of first passing draft assessment order in terms of section 144C(1) of the Act is no longer res integra. There is a long series of decisions to which reference would be made presently. In Zuari Cement Ltd. v. Asst. CIT (decision dated February 21, 2013 in W. P. (C) No. 5557 of 2012), the Division Bench (DB) of the Andhra Pradesh High Court categorically held that the failure to pass a draft assessment order under section 144C(1) of the Act would result in rendering the final assessment order 'without juri iction, null and void and unenforceable'. In that case, the consequent demand notice was also set aside. The decision of the Andhra Pradesh High Court was affirmed by the Supreme Court by the dismissal of the Revenue's SLP (C) (CC No. 16694 of 2013) on September 27, 2013. In Vijay Television P. Ltd. v. DRP [2014] 369 ITR 113 (Mad.), a similar question arose. There, the Revenue sought to rectify a mistake by issuing a corrigendum after the final assessment order was passed. Consequently, not only the final assessment order but also the corrigendum issued thereafter was challenged. Following the decision of the Andhra Pradesh High Court in Zuari Cement Ltd. v. Asst. CIT (supra) and a number of other decisions, the Madras High Court in Vijay Television P. Ltd. v. DRP (supra) quashed the final order of the Assessing Officer and the demand notice. Interestingly, even as regards the corrigendum issued, the Madras High Court held that it was beyond the time permissible for issuance of such corrigendum and, therefore, it could not be sustained in law. Recently, this court in ESPN Star Sports Mauritius S.N.C. ET Compagnie v. Union of India [2016] 388 ITR 383 (Delhi), following the decision of the Andhra Pradesh High Court in Zuari Cement Ltd. v. Asst. CIT (supra), the Madras High Court in Vijay Television P. Ltd. v. DRP (supra) as well as the Bombay High Court in International Air Transport Association v. Deputy CIT [2016] 7 ITR-OL 227 (Bom); [2016] 290 CTR (Bom) 46, came to the same conclusion. Mr. Dileep Shivpuri, learned counsel for the Revenue sought to contend that the failure to adhere to the mandatory requirement of issuing a draft assessment order under section 144C(1) of the Act would, at best, be a curable defect. According to him the matter must be restored to the Assessing Officer to pass a draft assessment order and for the petitioner, thereafter, to pursue the matter before the Dispute Resolution Panel. 19 The court is unable to accept the above submission. The legal position as explained in the above decisions is unambiguous. The failure by the Assessing Officer to adhere to the mandatory requirement of section 144C(1) of the Act and first pass a draft assessment order would result in invalidation of the final assessment order and the consequent demand notices and penalty proceedings."

The Court ultimately opined as follows: - "

Consequently, in the present case, in complete contravention of section 144C, the Assessing Officer wrongfully assumed the juri iction and passed the final assessment order without passing a draft assessment order and without giving the respondent-assessee an opportunity to raise objections before the Dispute Resolution Panel.

Keeping in view the aforesaid, this court is of the opinion that no question of law, let alone a substantial question of law, arises in the present appeal.

This court is of the view that till the Income-tax Department ensures that the Assessing Officers follow the mandate of law, in particular, the binding provisions like section 144C and eschew filing of unnecessary appeals rather than in nearly all matters where the Assessing Officer has taken a view against the assessee, the assessments will not achieve finality for a number of years like in the present case where the case of assessment year 2007-08 stands remanded and restored to the file of the Assessing Officer."

We note that the legal position as enunciated by this Court also finds resonance in the decisions rendered by the Madras, Gujarat and Bombay High Courts in the decisions rendered in Vijay Television (P.) Ltd. v. Dispute Resolution Panel [2014] 46 taxmann.com 100/225 Taxman 35/369 ITR 113 (Mad.) 2014 SCC OnLine Mad 12885, CIT v. C-Sam (India) (P.) Ltd. [2017] 84 taxmann.com 261/398 ITR 182 (Guj.) 2017 SCC OnLine Guj 2651 and Pr. CIT v. Andrew Telecommunications (P.) Ltd. 2018 SCC Online Bom 21360 respectively. 20

Similarly, The Hon'ble Madras High Court in the case of Ahmed Buhari Vs. ACIT, Central Circle 2025(7) TMI 451 have held that issuance of the draft assessment order under section 144C(1) is mandatory and non issuance is not just a procedural lapse and therefore it is not curable. The consistent view of various High Courts is that failure to follow Section 144C procedure is not a procedural irregularity but a juri ictional illegality, not curable u/s 292B. The Hon'ble High Courts have consistently held that where a draft order is not issued, the final assessment is void and liable to be quashed. Participation in assessment proceedings cannot confer validity on a void order; there is no estoppel against statute.

In the present case, the AO admittedly passed final assessment orders u/s 153A without issuing draft assessment orders, despite the assessee being an eligible assessee. Respectfully following the decisions of Hon'ble Bombay High Court in the case of Barentz India (P.) (supra) and the decision of Hon'ble Delhi Accordingly, the assessments passed for A.Ys.2016-17, 2018-19, 2019-20 and 2020-21 u/s 153A without issuance of draft assessment orders u/s 144C are quashed as being void and without juri iction.

In the result, all appeals of the assessee are allowed. Order pronounced in the Open Court 15/12/2025. कृणवन्त सहाय (KRINWANT SAHAY) लेखा सदस्य / ACCOUNTANT MEMBER ललित कुमार (LALIET KUMAR) न्यायिक सदस्य / JUDICIAL MEMBER AG आदेश की प्रतिलिपि अग्रेषित /