INTERWRAP CORP PVT LTD (SUCCESSOR OF OWENS CORNING INDUSTRIES PRIVATE LIMITED PREVIOUSLY KNOWN AS OVC REINFORCEMENT MFG LTD),HYDERABAD vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-5(1), HYDERABAD

ITA 450/HYD/2020Status: DisposedITAT Hyderabad23 September 2026AY 2007-0828 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessment order dated 30.01.2020 was barred by limitation and therefore quashed. The Tribunal rejected the assessee's contention that Section 144C was wholly inapplicable to AY 2007-08, citing the jurisdictional High Court's decision in Zuari Cement Ltd. v. ACIT, which held that Section 144C was attracted if the variation was proposed on or after 01.10.2009, and the draft assessment order was passed on 21.12.2010. However, the Tribunal found that the fresh proceedings initiated pursuant to the Tribunal's order dated 08.07.2013 were governed by Section 153(2A) of the Act. The Tribunal rejected the revenue's argument that the limitation should commence from 03.04.2017, holding that the subsequent internal movement of the order within the department could not postpone the statutory period of limitation, relying on principles from Sunshine Capital Ltd. v. DCIT and Lakhpatrai Agarwal v. CIT. The Tribunal noted that the department's own reassessment order dated 30.06.2014 indicated awareness of the Tribunal's order in FY 2013-14. Even with the benefit of the extended two-year period under the fourth proviso to Section 153(2A), the statutory period expired on 31.03.2016. Consequently, the DRP's order, TPO's order, and the final assessment order were passed after the expiry of the limitation period. As the assessment order was quashed on the ground of limitation, the Tribunal refrained from dealing with the other grounds on the merits of the transfer pricing adjustment, leaving them open.

What were the facts?

The assessee, Interwrap Corp Pvt Ltd (successor to Owens Corning Industries Private Limited), filed an appeal against the final assessment order dated 30.01.2020 passed by the Assessing Officer (AO) under Section 143(3) r.w. Section 92CA(3) r.w. Section 144C(13) of the Income Tax Act, 1961. This order arose from directions issued by the Dispute Resolution Panel-1 (DRP) on 13.12.2019. The assessment year in question is 2007-08. The assessee challenged the transfer pricing adjustment of Rs. 10,60,74,640 made by the AO/TPO/DRP. The procedural history involves a prior order by the Tribunal dated 08.07.2013, which remitted the issue to the DRP for fresh adjudication. The core of the dispute, as decided by the Tribunal, revolved around the limitation period for passing the assessment order.

What were the issues?

The primary question before the Tribunal was whether the assessment order dated 30.01.2020 was passed within the period of limitation prescribed under Section 153(2A) of the Income Tax Act, 1961, considering the Tribunal's prior order dated 08.07.2013. The assessee contended that Section 144C was not applicable to AY 2007-08 and that the entire proceedings under Section 144C were void ab initio. The assessee also argued that the assessment order was barred by limitation. The revenue contended that the limitation period should commence from 03.04.2017, when the DRP claimed to have received the Tribunal's order. The Tribunal also considered whether the DRP's order, TPO's order, and the final assessment order were passed after the expiry of the statutory period of limitation. The assessee also raised numerous grounds concerning the merits of the transfer pricing adjustment, including the computation of margins, selection of comparables, and working capital adjustment, but these were rendered academic by the decision on limitation.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 92CA(3),Section 144C(13),Section 144C(5),Section 254,Section 92CA,Section 153(2A),Section 254(3),Section 92C(2),Section 234B,Section 234D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad

For Appellant: Ms Seema Meena, CIT-DR

PER RAVISH SOOD, JM: The present appeal filed by the assessee company is directed against the order passed by the Assessing Officer (for short, “AO”) under Section 143(3) r.w Section 92CA(3) r.w Section 144C(13) of the Income Tax Act, 1961 (for short, “Act”), dated 30.01.2020, which in turn arises

2 INTER

The order continues below.

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