Overall Assessment Time Limit Applies Even In Dispute Resolution Panel Cases: ITAT New Delhi

The Delhi Bench of the Income Tax Appellate Tribunal has ruled that final assessment orders under Section 144C (DRP route) must comply with the overarching time limit under Section 153 (assessment deadline), holding that orders passed beyond this limit are time-barred.

A coram comprising Judicial Member Vikas Awasthy and Accountant Member Sanjay Awasthy was dealing with appeals filed by BT India Pvt. Ltd. for Assessment Years 2017-18 and 2018-19, wherein the primary issue was whether the assessment orders were barred by limitation.

The company contended that the final assessment orders were passed beyond the time limit prescribed under Section 153 of the Act, even when read along with the procedure under Section 144C.

Reliance was placed on the Madras High Court judgment in Roca Bathroom Products Pvt. Ltd., which held that Sections 144C and 153 are interdependent and the overall limitation must be computed with reference to Section 153.

On the other hand, the revenue argued that the issue is pending before the Supreme Court and that Section 144C is a complete code with independent timelines. It was further submitted that the Tribunal should defer adjudication in light of the pending larger bench consideration by the Supreme Court.

Rejecting the preliminary objection of the Revenue, the Tribunal held that there is no legal bar in proceeding with the matter, especially when the judgment in Roca Bathroom Products has not been stayed. The Tribunal reiterated that a mere pendency of an issue before the Supreme Court does not preclude adjudication by lower forums.

On merits, the tribunal followed the ratio laid down in Roca Bathroom Products Pvt. Ltd. and held that the provisions of Sections 144C and 153 are “mutually inclusive and overlapping,” and therefore, the limitation period under Section 153 applies to final assessment orders passed under Section 144C(13).

The bench stated, “The provisions of section 144C and section 153 are not mutually exclusive as both contain provisions relating to Section 92CA and are inter-dependent and overlapping.”

Applying the law to the facts, the Tribunal noted that for both assessment years, the final assessment orders were passed beyond the prescribed limitation period. Accordingly, the assessment orders were held to be time-barred and were quashed.

The tribunal, however, granted liberty to both parties to revive the appeals in case the Supreme Court takes a contrary view on the issue.

For Assessee: Advocates Deepak Chopra and Ankul Goyal

For Revenue: Dharm Veer Singh, CIT-DR