The officer took the TPO's adjustment straight into a final order without giving me a draft order. The department says s.292B cures it. Does it?
It does not, on this line of authority. The Tribunal held that once the assessee answers the description of an 'eligible assessee' under s.144C(15)(b) and a variation prejudicial to it is proposed, s.144C(1) is mandatory, and passing the final order without first forwarding a draft is a failure of a jurisdictional condition precedent, not a procedural lapse. Section 292B cures only technical or clerical defects in proceedings otherwise validly initiated and cannot confer a jurisdiction that was never lawfully assumed. The Revenue's alternative plea for a remand to let the officer start again was also rejected: a nullity cannot be revived by remand.
Decided by the ITAT (Manu Kumar Giri, Judicial Member and S.R. Raghunatha, Accountant Member (Chennai Bench 'B')) on 2026-05-04, reported as ITA No. 4142/CHNY/2025 (AY 2018-19). It bears on section 144C, section 144C(1), section 144C(2), section 144C(15), section 292B, section 92CA, section 92CA(3), section 153A, section 263 of the Income Tax Act 1961, in Assessment & Scrutiny, Appeals and Revision & Rectification matters.
Three things make this order worth carrying beyond the settled proposition. First, the setting: this was a specified domestic transaction, referred to the TPO after a s.263 revision, assessed under s.153A read with s.263 — the draft order requirement bites there just as it does in an ordinary s.143(3) transfer pricing assessment, because s.144C(15)(b)(i) turns on a variation arising as a consequence of an order of the TPO under s.92CA(3), whatever the assessment provision. Second, the refusal to remand: the Revenue's fallback in these cases is to ask that the matter go back so a draft order can be issued, and the Tribunal held that once the order is void ab initio there is nothing to remit. Third, the record of the other side. The Revenue argued in terms that the omission was a curable procedural irregularity, and in the companion Delhi case the departmental representative added that the ground was raised for the first time before the Tribunal and that no fresh draft order was needed in a second round after a set-aside. Those arguments are alive. The argument has succeeded at High Court level, at least on the second-round question: the Madras High Court in Enfinity Solar Solutions (single Judge, 21 June 2021) called a repeat of the s.144C procedure after a limited remand an "empty formality" and dismissed the writ, before being reversed by the Division Bench on 24 June 2025. Read the Division Bench, but expect the Revenue to run the single Judge's reasoning wherever the remand was partial.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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For AY 2018-19, and pursuant to revisionary directions of the Principal Commissioner under s.263, the Assessing Officer referred the assessee's specified domestic transactions to the TPO under s.92CA. By order dated 25 January 2024 under s.92CA(3) the TPO proposed an upward transfer pricing adjustment of Rs 39,21,15,575. The Assessing Officer incorporated that adjustment in an assessment order dated 30 March 2024 under s.153A read with s.263 without first forwarding a draft assessment order under s.144C(1). The CIT(A) annulled the assessment as void ab initio. The Revenue appealed, contending that the omission was a curable procedural irregularity, that in any event the matter should be restored to the Assessing Officer for fresh compliance with s.144C, and raising a further ground founded on observations said to have been made in separate proceedings before the High Court concerning alleged illegal mining.
The Revenue's appeal was dismissed. The assessee fell within s.144C(15)(b) as an eligible assessee, the variation proposed was prejudicial to it, and s.144C(1) therefore obliged the Assessing Officer to forward a draft order before passing any final order. Bypassing that stage was a complete failure to satisfy a jurisdictional condition precedent and rendered the final order void ab initio and non est. Section 292B could not salvage it. The plea for restoration to the Assessing Officer was rejected, since a nullity cannot be revived through remand so as to confer fresh jurisdiction. With the assessment void, no occasion survived to examine the merits of the transfer pricing adjustment.
The Tribunal identified the short question as whether, after receipt of a TPO order proposing a prejudicial upward adjustment, the Assessing Officer could lawfully assume jurisdiction to pass a final order under s.153A read with s.263 without first forwarding a draft order. It held that once the assessee is an eligible assessee and a prejudicial variation is proposed, the legislative command in s.144C(1) is mandatory, the provision employing 'shall', and that the scheme confers a substantive right to object before the DRP under s.144C(2), after which alone the officer acquires jurisdiction to pass a final order — so s.144C is a complete code and not a procedural embellishment. On s.292B, the Tribunal drew the settled distinction between irregular exercise of jurisdiction and absence of jurisdiction: where a statute prescribes a mode for assuming jurisdiction the authority must act in that manner or not at all, and failure to satisfy a condition precedent strikes at the root of the authority. It followed the jurisdictional High Court in Vijay Television, which held the defect incapable of cure by corrigendum or under s.292B, its own earlier order in the assessee's case for AY 2009-10 in ITA No.1458/Mds/2013, and the decisions of the Bombay High Court in SHL (India) and of the Delhi High Court in PCIT v. Sumitomo Corporation India. Judicial discipline required consistency where the Revenue had shown no distinguishing facts and no change in law.
Section 292B of the Act, which cures only technical or clerical defects in proceedings otherwise validly initiated, cannot be invoked to salvage an order passed in derogation of an express statutory mandate where jurisdiction itself was never lawfully assumed.
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Handle my notice → Ask a CA on WhatsAppIt does not, on this line of authority. The Tribunal held that once the assessee answers the description of an 'eligible assessee' under s.144C(15)(b) and a variation prejudicial to it is proposed, s.144C(1) is mandatory, and passing the final order without first forwarding a draft is a failure of a jurisdictional condition precedent, not a procedural lapse. Section 292B cures only technical or clerical defects in proceedings otherwise validly initiated and cannot confer a jurisdiction that was never lawfully assumed. The Revenue's alternative plea for a remand to let the officer start again was also rejected: a nullity cannot be revived by remand. This was decided by the ITAT (Manu Kumar Giri, Judicial Member and S.R. Raghunatha, Accountant Member (Chennai Bench 'B')) and bears on section 144C, section 144C(1), section 144C(2), section 144C(15), section 292B, section 92CA, section 92CA(3), section 153A, section 263 of the Income Tax Act 1961. It is reported as ITA No. 4142/CHNY/2025 (AY 2018-19). Three things make this order worth carrying beyond the settled proposition. First, the setting: this was a specified domestic transaction, referred to the TPO after a s.263 revision, assessed under s.153A read with s.263 — the draft order requirement bites there just as it does in an ordinary s.143(3) transfer pricing assessment, because s.144C(15)(b)(i) turns on a variation arising as a consequence of an order of the TPO under s.92CA(3), whatever the assessment provision. Second, the refusal to remand: the Revenue's fallback in these cases is to ask that the matter go back so a draft order can be issued, and the Tribunal held that once the order is void ab initio there is nothing to remit. Third, the record of the other side. The Revenue argued in terms that the omission was a curable procedural irregularity, and in the companion Delhi case the departmental representative added that the ground was raised for the first time before the Tribunal and that no fresh draft order was needed in a second round after a set-aside. Those arguments are alive. The argument has succeeded at High Court level, at least on the second-round question: the Madras High Court in Enfinity Solar Solutions (single Judge, 21 June 2021) called a repeat of the s.144C procedure after a limited remand an "empty formality" and dismissed the writ, before being reversed by the Division Bench on 24 June 2025. Read the Division Bench, but expect the Revenue to run the single Judge's reasoning wherever the remand was partial. If it applies to you, the first step is this: Establish 'eligible assessee' status first, by reference to s.144C(15)(b): a variation arising as a consequence of the TPO's order under s.92CA(3), or a non-resident non-company or foreign company.
For AY 2018-19, and pursuant to revisionary directions of the Principal Commissioner under s.263, the Assessing Officer referred the assessee's specified domestic transactions to the TPO under s.92CA. By order dated 25 January 2024 under s.92CA(3) the TPO proposed an upward transfer pricing adjustment of Rs 39,21,15,575. The Assessing Officer incorporated that adjustment in an assessment order dated 30 March 2024 under s.153A read with s.263 without first forwarding a draft assessment order under s.144C(1). The CIT(A) annulled the assessment as void ab initio. The Revenue appealed, contending that the omission was a curable procedural irregularity, that in any event the matter should be restored to the Assessing Officer for fresh compliance with s.144C, and raising a further ground founded on observations said to have been made in separate proceedings before the High Court concerning alleged illegal mining. The matter was decided on 2026-05-04 by the ITAT (Manu Kumar Giri, Judicial Member and S.R. Raghunatha, Accountant Member (Chennai Bench 'B')). On those facts the ITAT held as follows. The Revenue's appeal was dismissed. The assessee fell within s.144C(15)(b) as an eligible assessee, the variation proposed was prejudicial to it, and s.144C(1) therefore obliged the Assessing Officer to forward a draft order before passing any final order. Bypassing that stage was a complete failure to satisfy a jurisdictional condition precedent and rendered the final order void ab initio and non est. Section 292B could not salvage it. The plea for restoration to the Assessing Officer was rejected, since a nullity cannot be revived through remand so as to confer fresh jurisdiction. With the assessment void, no occasion survived to examine the merits of the transfer pricing adjustment.
The Tribunal identified the short question as whether, after receipt of a TPO order proposing a prejudicial upward adjustment, the Assessing Officer could lawfully assume jurisdiction to pass a final order under s.153A read with s.263 without first forwarding a draft order. It held that once the assessee is an eligible assessee and a prejudicial variation is proposed, the legislative command in s.144C(1) is mandatory, the provision employing 'shall', and that the scheme confers a substantive right to object before the DRP under s.144C(2), after which alone the officer acquires jurisdiction to pass a final order — so s.144C is a complete code and not a procedural embellishment. On s.292B, the Tribunal drew the settled distinction between irregular exercise of jurisdiction and absence of jurisdiction: where a statute prescribes a mode for assuming jurisdiction the authority must act in that manner or not at all, and failure to satisfy a condition precedent strikes at the root of the authority. It followed the jurisdictional High Court in Vijay Television, which held the defect incapable of cure by corrigendum or under s.292B, its own earlier order in the assessee's case for AY 2009-10 in ITA No.1458/Mds/2013, and the decisions of the Bombay High Court in SHL (India) and of the Delhi High Court in PCIT v. Sumitomo Corporation India. Judicial discipline required consistency where the Revenue had shown no distinguishing facts and no change in law. In the words reproduced by the source cited on this page: "Section 292B of the Act, which cures only technical or clerical defects in proceedings otherwise validly initiated, cannot be invoked to salvage an order passed in derogation of an express statutory mandate where jurisdiction itself was never lawfully assumed." The decision followed or applied Vijay Television (P.) Ltd. v. DRP (2014) 369 ITR 113 (Mad) — followed as jurisdictional High Court authority; SHL (India) (P.) Ltd v. DCIT [2021] 438 ITR 317 (Bom) — followed; PCIT v. Sumitomo Corporation India (P.) Ltd (Delhi High Court, 2024) — followed; M/s. Enfinity Solar Solutions Pvt Ltd v. DCIT, W.A. No.2006 of 2022 (Madras High Court, Division Bench, 24 June 2025) — relied on by the assessee before the CIT(A); M/s. Enfinity Solar Solutions Private Limited v. DCIT, W.P. No.31165 of 2018 (Madras High Court, single Judge, 21 June 2021) — the contrary decision, holding a repeat of the s.144C procedure after a limited remand an 'empty formality'; reversed by the Division Bench in W.A. No.2006 of 2022; C-SAM (India) Pvt. Ltd. (Gujarat High Court), Turner International India Pvt. Ltd. and JCB India Ltd. — relied on by the assessee before the CIT(A); Transworld Garnet India Pvt. Ltd., ITA No.1458/Mds/2013 (AY 2009-10) — the assessee's own case, followed.
It was decided by the ITAT on 2026-05-04 and is reported as ITA No. 4142/CHNY/2025 (AY 2018-19). Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 144C, section 144C(1), section 144C(2), section 144C(15), section 292B, section 92CA, section 92CA(3), section 153A, section 263, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Revenue's appeal was dismissed. The assessee fell within s.144C(15)(b) as an eligible assessee, the variation proposed was prejudicial to it, and s.144C(1) therefore obliged the Assessing Officer to forward a draft order before passing any final order. Bypassing that stage was a complete failure to satisfy a jurisdictional condition precedent and rendered the final order void ab initio and non est. Section 292B could not salvage it. The plea for restoration to the Assessing Officer was rejected, since a nullity cannot be revived through remand so as to confer fresh jurisdiction. With the assessment void, no occasion survived to examine the merits of the transfer pricing adjustment. It arises in Assessment & Scrutiny, Appeals and Revision & Rectification matters, on section 144C, section 144C(1), section 144C(2), section 144C(15), section 292B, section 92CA, section 92CA(3), section 153A, section 263 of the Income Tax Act 1961, and was decided by Manu Kumar Giri, Judicial Member and S.R. Raghunatha, Accountant Member (Chennai Bench 'B'). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Show the variation is prejudicial — an upward adjustment carried into the assessment is enough — and then point to the mandatory 'shall' in s.144C(1). Raise the ground as a jurisdictional one; it goes to the power to pass the order, not to a mistake in it, which is why s.292B is not an answer. Resist the remand expressly: ask the appellate authority to annul rather than set aside, on the footing that a void order cannot be revived so as to confer fresh jurisdiction. Check the second-round cases separately: whether a fresh draft order is needed after a set-aside is a distinct question on which the department argues no, and on which the library already carries the JCB India and Turner International line. Where the ground was not taken below, be ready for the objection that it is raised for the first time; a pure jurisdictional ground on admitted facts is ordinarily admissible, but say so and rely on the record.
Searched for later treatment; none was found. That is not the same as a source affirming it. The citator search (doc 90454712, confirmed as 'Assistant Commissioner Of Income Tax ... vs Transworld Garnet India Private ...' of 4 May, 2026) returns nothing. A second probe on the company name returned 185 results, none dated after this order on the income-tax side - the most recent related decision is State of Tamil Nadu v Transworld Garnet India Private (Madras High Court, 17 February 2025), a sales-tax matter pre-dating it. The s.144C draft-order and s.292B holding has attracted no later treatment. Nothing overruling, doubting or distinguishing it was found, and no appeal to a High Court against it is disclosed on the record searched. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Paragraphs 17 and 18, which record the assessee's submissions before the CIT(A), list the authorities relied on and include a citation string to a commercial reporter; those citation strings are reproduced in the judgment itself and are neutral references. A separate fragment fetch returned, from within this document, an extended verbatim extract attributed to a Delhi High Court decision and to the Bombay High Court in SHL (India); because I could not establish cleanly which quoted judgment each sentence belonged to, none of that extract is quoted or relied on here. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Revenue's appeal was dismissed. The assessee fell within s.144C(15)(b) as an eligible assessee, the variation proposed was prejudicial to it, and s.144C(1) therefore obliged the Assessing Officer to forward a draft order before passing any final order. Bypassing that stage was a complete failure to satisfy a jurisdictional condition precedent and rendered the final order void ab initio and non est. Section 292B could not salvage it. The plea for restoration to the Assessing Officer was rejected, since a nullity cannot be revived through remand so as to confer fresh jurisdiction. With the assessment void, no occasion survived to examine the merits of the transfer pricing adjustment.
TaxSphere, “ACIT v Transworld Garnet India Private Limited”, https://taxnotice.vittsphere.com/caselaw/case/transworld-garnet-144c-draft-order-292b/ (validity last checked 2026-09-08)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
We are considering objecting to a draft order. Can the Dispute Resolution Panel make our position worse, can it send the matter back for fresh enquiry, and if we lose before it, do we appeal to the Commissioner (Appeals) or straight to the Tribunal?
The Assessing Officer has served a final assessment order on our foreign company raising a transfer pricing addition, without ever serving a draft order. Was he obliged to serve one first, and what was I supposed to do with it if he had?
We received a draft order on 12 March. Nobody objected. When was the final order due, and if we had objected, by when must the Dispute Resolution Panel have issued its directions and by when must the officer have given effect to them?
The Assessing Officer has forwarded a draft order to our partnership firm, which is non-resident but is not a company, and there is no Transfer Pricing Officer's order in the case. Is the firm an eligible assessee at all, and does it matter which assessment year we are in?
