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TMI Blog2019 (8) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The cross appeals filed by assessee and Revenue were heard together and are being disposed of by this consolidated order for the sake of convenience. 3. The learned Authorized Representative for the assessee pointed out that additional ground of appeal has been raised by assessee, which goes to the root of jurisdiction exercised by Assessing Officer and the same needs to be taken up first. 4. The additional ground of appeal raised by assessee reads as under:- X. On the facts and in the circumstances, learned Assessing Officer ('learned AO') has erred in completing assessment proceedings under section 143(3) of the Act without following the mandatory provisions of section 144C(1) of the Act and without issuing draft assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2CA(3) of the Act, dated 28.01.2013, wherein adjustment of Rs. 91,94,100/- was proposed. Consequent thereto, assessment proceedings were taken up by Assessing Officer vide letter dated 15.02.2013. The assessee had offered addition as per transfer pricing order along with other offers. The Assessing Officer passed assessment order under section 143(3) of the Act, dated 21.03.2013. The learned Authorized Representative for the assessee before us has placed copy of demand notice issued in Form No.7 and also notice issued under section 274 r.w.s. 271(1)(c) of the Act initiating penalty proceedings, dated 21.03.2013. It has been pointed out that the said issue stands covered by decision of Hon'ble Bombay High Court in Pr.CIT Vs. Lionbridge Techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This is mentioned in para 1 of assessment order. Further, in the body of order at page 23 while talking about disallowance of depreciation out of non compete fee, the Assessing Officer refers to the written submissions filed by assessee vide letter dated 15.02.2013 wherein the assessee has offered addition on account of transfer pricing adjustment and other additions. The Assessing Officer completes the assessment after verification on other issues vide order dated 21.03.2013 but along with the assessment order, the Assessing Officer also issues demand notice in Form No.7, dated 21.03.2013 and also notice under section 274 r.w.s. 271(1)(c) of the Act dated 21.03.2013. 10. The issue which arises in the present appeal is whether where the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he scheme of the Act is that a draft order is to be proposed by the Assessing Officer to the eligible assessee if he proposes to make any variation in the income or loss returned, which is prejudicial to the interest of assessee. Thereafter, on receipt of draft order, the eligible assessee shall either file his acceptance of the variation to the Assessing Officer or file objections to the DRP and Assessing Officer. Thereafter, the Assessing Officer has to pass final assessment order under section 144C(3) of the Act. 12. In the facts of present case, the TPO had passed order under section 92CA(3) of the Act proposing variation in the income which is prejudicial to the interest of assessee, such adjustment needs to be proposed in the draft a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance was placed on the decision of Hon'ble Bombay High Court in International Air Transport Association Vs. DCIT (2016) 68 taxmann.com 246 (Bom), wherein it was held that draft assessment order is necessary in terms of section 144C(1) of the Act before the Assessing Officer can proceed to pass final assessment order. It was held that in the absence thereof, order is without jurisdiction. The Hon'ble Bombay High Court in the facts before it in Pr.CIT Vs. Lionbridge Technologies (P.) Ltd. (supra) did not accept the contention on behalf of Revenue that the Respondent was estopped from challenging the corrigendum, which was passed after the date of passing of draft assessment order, as it was accepted by it and representation was also filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra), wherein the facts are at variance. Since the assessee suo motu in good faith claims to have offered additional income to tax at the beginning of assessment proceedings itself, the said income was assessed in the hands of assessee and the Tribunal held that variation in income was not on account of any addition made by the Assessing Officer but was on account of voluntary offer of additional income by the assessee and it could not be said that the Assessing Officer had made variation in the income returned, which was prejudicial to the interest of such assessee. Then the issue was decided on merits of the said case. However, the said proposition does not hold good as the facts are at variance. 16. We further find that similar issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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