The assessee’s case was referred to the Transfer Pricing Officer (TPO) for the determination of the arm’s-length price. The TPO passed an order, and accordingly, the assessee was classified as an ‘eligible assessee’ under Section 144C (15). However, when the Assessing Officer issued the assessment order, they also issued a notice of demand and penalty notices.

The court held that considering the draft assessment order was issued along with the notice of demand and penalty notice, it is, in fact, a final assessment order. Even upon reading the so-called draft assessment order, it was evident that the order was a final assessment, as the operative part of the order mentioned the demand and penalty notices. Given the requirement to issue a draft assessment order under Section 144C, and considering this order was a final assessment, the order is invalid. (AY 2015-16)