MANE INDIA PRIVATE LIMITED,RAANGA REDDY vs. DCIT CIRCLE -5(1), HYDERABAD

Briefly stated relevant facts are that the assessee is engaged in the business of research production, processing and distribution of flavours and fragrance productions. It filed its return of income for the assessment year 2018-19 and in view of certain international transactions, the determination of Arm’s Length Price (ALP) thereof was referred to the ITA-TP No. 479/Hyd/2022 learned Transfer Pricing Officer (TPO). Learned TPO suggested an upward adjustment to the tune of Rs. 3,84,65,678/- by order dated 30/07/2021. Draft assessment order was passed on 28/09/2021. Assessee preferred objections before the learned DRP. Learned DRP issued directions on 20/06/2022. Consequently, final assessment order was passed by learned Assessing Officer on 17/08/2022.

Assessee preferred this appeal. Though the final assessment order was challenged on several grounds, main plank of argument of the learned AR is that the final assessment order dated 17/08/2022 passed under section 143(3) r.w.s. 144C(13) and r.w.s. 144B of the Act is barred by limitation since it is passed beyond the maximum time limit prescribed under section 144C(13) of the Act.

Learned DR submitted that the learned DRP’s directions were issued on 20/06/2022, but the same were served on the learned Assessing Officer on 27/06/2022.

We have gone through the record in the light of the submissions made on either side. There is no dispute that the learned DRP’s directions were issued on 20/06/2022. Assessee requested the department by way of letter dated 26/08/2022 through e-mail to furnish the date of despatch of learned DRP’s directions. By letter dated 01/09/2022, the ITO (OSD) & Secretary (DRP-1), Bengaluru stated that the order was despatched on 20/06/2022 and simultaneously it was delivered to the learned Assessing Officer at the same time. Even otherwise, in the final assessment order, it is stated that the directions of the learned DRP were received by the learned TPO on 27/06/2022.

Section 144C(13) of the Act states that,- “Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained in section 153, the assessment without providing any further opportunity of being ITA-TP No. 479/Hyd/2022 heard to the assessee, within one month from the end of the month in which such direction is received”.

This provision is mandatory. The admitted facts clearly establish that the directions of the learned DRP were received by the learned Assessing Officer/learned TPO at the latest by 27/06/2022. The last date of such month was 30/06/2022 and the period under section 144C(13) expires by 31st July, 2022 whereas the final assessment order in this case was passed on 17/08/2022 clearly beyond limitation.

In M/s. Dentsply India (P) Ltd Vs. ITO in dated 24/05/2019, Altran Technologies India Pvt. Ltd. Vs. DCIT in IT(TP)A No. 977/Bang/2022, dated 05/12/2022 and IPG DXTRA India Pvt. Ltd. Vs. DCIT in IT(TP)A No. 967/Bang/2022, dated 19/12/2022 the Co-ordinate Benches of this Tribunal have taken a consistent view that the order passed beyond the limitation prescribed under section 144C(13) is nonest in the eye of law and consequently liable to be quashed.

Since on the admitted facts, the final assessment order dated 17/08/2022 is barred by limitation, while respectfully following the consistent view taken by the Co-ordinate Benches of this Tribunal in M/s. Dentsply India (P) Ltd Vs. ITO in dated 24/05/2019, Altran Technologies India Pvt. Ltd. Vs. DCIT in IT(TP)A No. 977/Bang/2022, dated 05/12/2022 and IPG DXTRA India Pvt. Ltd. Vs. DCIT in IT(TP)A No. 967/Bang/2022, dated 19/12/2022 (supra), we hold that such an order is nonest in the eye of law and the same is liable to be quashed. We hold and direct so.

In the result, appeal of the assessee is allowed.