Assessee’s Contentions

Revenue’s Contentions

Tribunal’s Judgment

The AO was required to pass the final assessment order strictly in accordance with the DRP's directions under section 144C (13). Since the AO retained the original TP adjustment instead of giving effect to the DRP's relief, the assessment order was invalid

The AO had considered the DRP's directions, but the error occurred while giving effect to them. Therefore, the mistake was only an apparent error that could be rectified under section 154 or the matter could be remanded to the AO.

The Tribunal held that section 144C(13) is mandatory, and the AO has no discretion to ignore or deviate from the DRP's directions. Since the final assessment order did not incorporate the DRP's relief, it was not passed in accordance with law and was liable to be quashed.

The assessee relied on earlier decisions holding that an assessment order passed contrary to the DRP's binding directions is void ab initio and cannot be sustained.

The Revenue argued that the defect was procedural in nature and could be cured through rectification under section 154 without quashing the assessment.

The Tribunal rejected the Revenue's contention and held that the defect was jurisdictional, not procedural and quashed the assessment order as void ab initio.