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Facts
The assessee challenged the final assessment order for AY 2010-11 as time-barred, contending it was passed on 23.11.2021, beyond the statutory time limit under Section 144C(13). The DRP order was dated 13.09.2021 and electronically communicated to the AO on 29.09.2021, while the Revenue argued it was physically received on 08.10.2021, making 30.11.2021 the last date for passing the order.
Held
The Tribunal, relying on various High Court and Tribunal decisions, held that the limitation period commences from the date the DRP order is electronically available/visible to the Assessing Officer in the ITBA portal. It concluded that the DRP order was available on 29.09.2021, making the final assessment order passed on 23.11.2021 time-barred. The assessment order was declared *non est* and quashed.
Key Issues
Whether the final assessment order passed under Section 143(3) r.w. Section 144C(13) is time-barred if the DRP directions are available electronically to the AO, and the assessment order is passed beyond one month from the end of the month of such electronic receipt.
Sections Cited
143(3), 144C(13), 254
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Income Tax Appellate Tribunal, DELHI BENCHES: H : NEW DELHI
Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL
Assessment Year: 2010-11 Rio Tinto India Private Ltd., Vs ACIT, 21st Floor, DLF Building No.5, Circle-19(1), Tower-A, DLF Cyber City, New Delhi. Phase-3, Gurgaon, Haryana – 122 002. PAN: AAACR5591A (Appellant) (Respondent) Assessee by : Shri Nageshwar Rao, Advocate Revenue by : Shri S.K. Jadhav, CIT-DR Date of Hearing : 08.04.2025 Date of Pronouncement : 04.06.2025 ORDER
PER ANUBHAV SHARMA, JM:
This appeal is preferred by the Assessee against the final assessment order dated 30.11.2021 passed by the ACIT, Circle-19(1), New Delhi (hereinafter referred to as the Ld. AO) u/s 254 r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the AY 2010-11.
Heard and perused the records. The ld counsel for the assessee has stressed for disposal of the additional ground which goes on to question the legality of the final assessment order passed. As for convenience, the additional ground as raised is reproduced below:- “1A. Impugned order dated 30th November, 2021 is passed beyond the statutory time limit prescribed under section 144C(13) of the Act and is time- barred, null and void.”
At the time of hearing on 08.04.2025, the ld. DR has sought adjournment on the basis that report has to be called from the AO which was opposed by the ld. counsel on the basis that the additional ground was filed on 11.03.2025 and on 20th March, 2025 the Bench had directed the ld. DR to call for a report from the AO on the aforesaid additional ground. He opposed the adjournment on the basis that from the facts available on record the additional ground can be adjudicated. Accordingly, the Bench had heard the argument and was convinced that the record available is sufficient to determine the issue raised. However, still, the ld. DR was given an opportunity to file a factual report, if any, rebutting the additional ground and, accordingly, a report has also been filed by the Revenue.
At outset it is pertinent to mention that as the additional ground is a pure question of law which can be adjudicated on basis of admitted facts, same is admitted.
The contention of the ld. counsel is that the DRP order is dated 13.09.2021 and vide DIN & Document No.ITBA/DRP/S/91/2021-22/1036002837(1)/172 dated 29.09.2021, the DRP order was communicated to the AO and thereupon as per the provisions of section 144C(13) of the Act, the final assessment order could have been passed upto 31.10.2021, but, the impugned final assessment order has been passed on 23.11.2021. Thus non est in the eyes of law.
The same is rebutted by the ld. DR on the basis of the report received from ld. AO submitting as follows:-
This issue with regard to as to when the DRP order is said to have been received by AO, in case of electronic transmission, is now sufficiently settled and we rely decision dated 11.04.2025 in the case of Trans Union International Inc. vs. DCIT, wherein, taking note of all relevant decisions of the Hon’ble High Courts and different benches of this tribunal, the co0rdinate Bench has held as follows:-
11. In order to decide the issue, the critical fact to be examined is whether the DRP order once signed is automatically available i.e. received by the AO in the ITBA portal. We in this regard notice that the Hon'ble Madras High Court in the case of Ramco Cements Ltd (supra) has examined the functionalities of the ITBA Portal with regard to DRP directions and has given the finding that the DRP directions are immediately available to the Faceless AO (FAO) as well as JAO. It was contended by the revenue in the said case that when the DRP user has initiated the DRP proceedings by using an option of manually entering the details of the Section 144C order in the screen, the DRP order does not reflect automatically in the case history notings (CHN) of the assessment proceedings. However, the Hon'ble High Court rejected the said contentions by holding that “26. According to the Report, the second option has been availed by the DRP user and hence though the order was uploaded by the DRP user in the ITBA on 31.01.2022 itself, such uploading was not noticed by the Assessing Officer. 4 However, as far the Assessing Officer is concerned, an Advisory issued by the ITBA team on 'Visibility of orders passed by DRPs to other ITBA users, is relevant. The Advisory reads thus: Visibility of orders passed by DRPs to other ITBA users Kind Attn. All ITBA Users Sub: Visibility of orders passed by DRPs to other ITBA users – Reg. This is to inform that on passing order by the DRP in ITBA(DRP Module) [either through online system mode or through Manual to system mode], the DRP Directions/Order would be reflected automatically in the pending assessment work-item either with FAO or JAO – provided that at the time of initiating DRP proceedings, in ITBA DRP Module, DRP users had selected the Draft order u/s 144C in the system itself, rather than entering the details on the ITBA screen on its own. If, at the time of initiating DRP proceedings, the DRP user had not selected the Draft Order u/s 144C in the system, and had rather entered the details manually on the ITBA screen on its own, then the DRP Order will not reflect inside the pending / Assessment Proceedings work-item. In either of the above scenarios, however, the DRP order would be visible in the ‘360 Degree’ screen to the FAO if any assessment work item is pending with the FAO related to that PAN. The JAOs can view the DRP order in ‘360 Degree’ screen for all the PANs existing in their jurisdiction. Besides, JAO can also get the details from DRP by offline letter/communication. FAOs can also call for any details from JAOs by using the ‘Issue Letter’ functionality inside the workitem, and in response the JAOs can upload the details by using “Uploading of Documents based on the DIN/PAN-AY screen in ITBA. Regards, ITBA Team (Emphasis supplied) 27. Paragraphs 1 and 2 of the above Advisory stipulate the two methods/options for uploading of the order. However, whatever be the method chosen, the directions of the DRP would be visible in the 360 degree screen to the FAO, if any assessment work item were pending with the FAO, in relation to a PAN number 28. In other words, in the event of pending assessment proceedings, an FAO would have to key in the concerned PAN number of the assessee, such that, panoramic, 360 degree visibility is available to the officer to view the DRP directions as and when uploaded, which, in this case, is on 31.01.2022. In the present case, order of assessment dated 22.03.2022 has been passed (per serial no.12 of assessment order dated 22.3.2022) under Section 143(3) read with Section 144C (13) read with Section 144B of the Act. This provision requires an assessment to be framed only in faceless mode by an FAO and in fact, it is the FAO who has framed the assessment.
The Advisory makes it clear that the FAO would be able to view the DRP order in the 360 degree screen, since the assessment was pending with that officer. This feature has evidently been provided to ensure that an officer can access/receive the directions of the DRP as soon as it is uploaded by the Secretariat of the DRP and the pending proceedings would be completed within the statutory limitation provided.
Hence, there is no protection available to the Department by the DRP user having selected the second manual option, as, an assessing officer, in order to ensure that the assessment proceedings are strictly in accordance with statutory limitation, has been given full and complete access to all inputs required for completion of the assessment including the directions of the DRP immediately on their uploading into the ITBA portal by the DRP.
Clearly, limitation cannot be dependent on varying user functionalities which are nothing but internal processes. If this argument were to be accepted, the commencement of limitation would vary depending on the option exercised by the user which would defeat the purpose of statutory limitation apart from being an acceptable proposition. 32. The starting point of limitation has thus to be reckoned from the earliest instance when the directions of the DRP would be visible to the officer and cannot be taken to fluctuate from one methodology to another depending on the option exercised by the user. 37. The fact that the FAO has merely chosen to await intimation when the order had admittedly been uploaded on the ITBA by the DRP user, and his consequent belated response, cannot thus lead to a situation of disadvantage to the assessee, particularly when the Advisory provides a methodology by which the FAO can access the document uploaded by the DRP simultaneously, and realtime. 38. Lastly, Section 144C is a Code by itself that provides for very strict timelines for completion of an assessment. Hence the stipulation in regard to limitation cannot be reckoned in a manner so as to give rise to more than one interpretation, where either party can take benefit of a later date. 39. This issue has also attracted the attention of the Bombay and Delhi High Courts in Vodafone Idea Limited V. Central Processing Centre and others (459 ITR 413) and Louis Dreyfus Company India Private Limited V. Deputy Commissioner of Income Tax, Circle 13(1) and Others (Manu/DE/4671/2024). In both the cases, the very submissions as made before us, were advanced and have been rejected by those Courts.” 12. From the perusal of the Advisory issued by the ITBA Team on "Visibility of Orders passed DRP to other ITBA users" it is clear that the JAO can view the DRP order in "360 Degree" screen for the PANs existing in their jurisdiction. Therefore we are unable to agree with the argument that the decisions relied on 6 by the ld AR is with respect to FAO and cannot be applied to JAO. Accordingly in our considered view, the DRP directions either through online system mode or through manual to system mode, once digitally signed is available to JAO immediately in the ITBA system and hence the clock starts ticking for the JAO from that date for the purpose of passing the final assessment order under section 144C(13) i.e. from 30.06.2022 in assessee's case. ……………………………………………………………………………………………… …………………………………………………………..……………………….
Further, the Hon'ble Madras High Court in the case of Ramco Cements Ltd (supra), has clearly held that the limitation cannot depend on varying user functionalities which is an internal process that cannot be entertained since the same would defeat the purpose of statutory limitation. It is further held by the Hin'ble High Court that the limitation cannot be reckoned in a manner so as to give rise to more than one interpretation where either party can take benefit of a later date. Therefore by placing reliance respectfully on the above judicial pronouncements we hold that the AO of the assessee has received the DRP direction on 30.06.2022 at 9.53 p.m. and therefore the final order of assessment which is passed on 24.08.2022 instead of 31.07.2022 is barred by limitation as per the provisions of section 144C(13) of the Act. Accordingly the addition made therein is not sustainable and liable to deleted, being void ab-initio.”
In this context, further reliance can be placed on: (i) Louis Dreyfus Company India (P.) Ltd vs. DCIT, [2024] 464 ITR 595 (Delhi); (ii) Rapiscan Systems (P.) Ltd. vs. ADIT, [2025] 170 taxmann.com 753 (Telangana); (iii) Commissioner of Income-tax vs. Ramco Cements Ltd., [2025] 171 taxmann.com 306 (Madras); (iv) Haier Appliances (I) Pvt. Ltd. vs. DCIT, & (v) Microsoft Corporation (India) Pvt. Ltd, v. DCIT, ITA No. 1863/Del/2022.