but a breach of a mandatory provision. We are also not
impressed with the arguments of the Revenue that the
Assessing Officer was under pressure of two charges, as
there were timelines to adhere to, since the said timelines
from time to time have been extended, the most recent one
being to 30 th September, 2021. The Revenue ought to
have appreciated that the requirement under Section
144C(1) to first pass a draft Assessment Order and to
provide a copy thereof to the assessee is a mandatory
requirement which gave substantive right to the assessee to
object to any variation, that is prejudicial to it. In this case,
the order under Section 92CA (3) of the IT Act, proposed
to make an adjustment of Rs.107,454,337/- to the arm’s
length price considered as Nil by Petitioner and to that
extent the said adjustment was evidently prejudicial to the
interest of Petitioner. Depriving Petitioner of this valuable
right to raise objection before DRP would be denial of
substantive rights to the assessee, for which, in our view,
the Assessing Officer has no power under the statute, as
the provision clearly mandates the Assessing Officer to pass
and furnish a draft Assessment Order in the first instance
in such a case. The legislature, in our view, has intended to
give an important opportunity to Petitioner, who is an
eligible assessee, which in our view, has been taken away.
In our view, failure to follow the procedure under Section
144C(1) would be a jurisdictional error and not merely
procedural error or a mere irregularity. The Assessment
Order has not been passed in accordance with the
provisions of Section 144C of the IT Act. This is not an
issue, which involves a mistake in the said order, but it
involves the power of the Assessing Officer to pass the
order. By not following the procedure laid down in Section
144C(1) to pass and furnish a draft Assessment Order to
Petitioner and directly passing a final Assessment Order
and without giving Petitioner an opportunity to raise
objections before the DRP, there is a complete
contravention of Section 144C, the Assessing Officer
having wrongly assumed jurisdiction to straight away pass
the final order. This is not a mere irregularity but an
incurable illegality. Even the provisions of Section 292B of
the IT Act would not protect such an order as Section 292B
of the IT Act cannot be read to confer jurisdiction on the
Assessing Officer, where none exists. The Supreme Court
decision in the case of Income-Tax Officer Vs. M. Pirai
Choodi; [2011] 334 ITR 262 (SC) referred to in the
