Tribunal held that the AO had passed a regular assessment order along with issue of notice of demand under section 156 of the Act and notice under section 274 read with section 271 was issued to the assesse.

Tribunal noted that undoubtedly, if draft assessment order was wrongly titled an assessment order, section 292B should have come to the rescue of the AO. However given the fact that resultant tax demand and penalty proceedings have been initiated, it was a final assessment order which has been passed by the AO in substance and in effect. Thus the Tribunal concluded that since the AO had failed to follow the mandate of the provisions of section 144C of the Act whereby he was required to pass a draft assessment order which is mandatory and is prescribed by the statute where order is passed under section 92CA proposing transfer pricing adjustment, the final assessment order passed was without jurisdiction. Further, the issuance of a show-cause notice cannot be equated and treated as a draft assessment order as the same would make the provisions of section 144C redundant. Accordingly, the impugned assessment order was set aside and assessee’s appeal was thus allowed. (AY. 2011-12)