Delhi High Court To Examine If Limitation For Income Tax Assessments Applies To Final Orders Passed Under DRP Procedure
Kapil Dhyani
28 July 2026 10:46 AM IST
The Delhi High Court has admitted the Income Tax Department's appeal to examine whether the statutory deadline for passing income tax assessment orders under Section 153 also governs final assessment orders passed under Section 144C, which lays down a separate assessment procedure for eligible assessees.
Section 144C of the Act prescribes a special assessment procedure involving a draft assessment order, review by the Dispute Resolution Panel (DRP), and the passing of a final assessment order for certain eligible assessees.
A Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta admitted the Revenue's appeal against the Income Tax Appellate Tribunal's (ITAT) order dated January 21, 2026, and framed the following substantial question of law:
“Whether, the Income Tax Appellate Tribunal was legally correct in holding that the limitation period prescribed under Section 153 of the Income Tax Act 1961, governs the passing of final assessment order under Section 144C of the Act, despite Section 144C being a self-contained code with specific timelines and overriding effect by virtue of its non obstante clause?”
The appeal arises from a common order passed by the ITAT, Delhi Bench, in five appeals involving Pioneer India Electronics Pvt. Ltd., Mitsui & Co. India Pvt. Ltd., Rohde & Schwarz India Pvt. Ltd., Itron India Pvt. Ltd. and Mori Seiki India Pvt. Ltd.
The assessees had challenged the validity of the final assessment orders on the ground that they were barred by limitation under Section 153 read with Section 144C of the Income Tax Act.
Before the Tribunal, the Revenue argued that Section 144C constitutes a self-contained code governing assessments involving the Dispute Resolution Panel (DRP), and therefore the limitation prescribed under Section 153 does not govern the passing of final assessment orders under Section 144C.
It further contended that the issue is pending before a larger bench of the Supreme Court in the Shelf Drilling Ron Tappmeyer Ltd. case and should not have been decided by the tribunal.
Rejecting the Revenue's preliminary objection, the ITAT proceeded to decide the issue on merits.
It relied on the Madras High Court's decision in Roca Bathroom Products Pvt. Ltd., to hold that Sections 144C and 153 are "mutually inclusive" and that the limitation period under Section 153 continues to govern the passing of final assessment orders under Section 144C.
Consequently, ITAT held the impugned assessment orders to be barred by limitation.
Challenging the Tribunal's decision, the Revenue approached the Delhi High Court under Section 260A of the Income Tax Act.
Admitting the appeal, the High Court issued notice to the respondent-assessees and listed the matter for hearing on September 15.
For Appellant: Advocates Puneet Rai, SSC with Ashvini Kr. & Rishabh Nangia, JSCs & Nancy Jain
For Respondent: Advocates Vishal Kalra, Snigdha Gautam