IPG DXTRA INDIA PRIVATE LIMITED ,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(1)(1), BANGALORE

The brief facts of the case show that assessee is a company engaged in the provision of public relations and communication management services, filed its return of income on 25.11.2022. The case was selected for scrutiny on TP risk parameters. Consequently notice u/s. 143(2) of the Act was issued on 28.6.2022. Thereafter notice u/s. 143(2) of the Act was issued on 12.10.2022. Subsequently the draft order u/s. 144C(13) of the Act was passed on 27.10.2023 wherein the upward adjustment proposed by the ld. TPO u/s. 92CA(3) dated 17.10.2023 of Rs.7,88,23,426 was incorporated. Subsequently the assessee filed its objections before the ld. DRP-1, Bengaluru [ld. DRP], who passed directions on 29.7.2024. Based on these directions, final assessment order was passed by the ld. AO, Assessment Unit on 24.9.2024.

As per ground No.2 of the appeal, it is the contention that the ld. AO has passed the final assessment order beyond the time limit prescribed u/s. 144C(13) of the Act and therefore the final assessment order dated 24.9.2024 is time barred and deserves to be quashed.

The ld. AR, Mr. Sharath Rao and Shri Dheeraj, submitted that the DRP directions are dated 29.7.2024, whereas the assessment order is dated 24.9.2024. He submitted that according to the provisions of section 144C(13) of the Act upon receipt of the directions of the ld. DRP, the AO must complete the assessment within one month from the end of the month in which such directions are received. He submitted that the ld. DRP Secretariat has confirmed that those directions were uploaded

He further submitted that the ld. TPO has passed an Order Giving Effect to the directions of the ld. DRP on 05.08.2024 and therefore it is apparent that the AO received the direction on 29.7.2024. He submits that in the same email, the ld. TPO was also marked as a recipient.

To support his case, he referred to the plethora of judicial precedents wherein it has been held that the date of uploading of the directions of the ld. DRP is the date of receipt of such direction by the ld. AO. Accordingly the assessment order is barred by limitation. He referred to the following judicial precedents :-

The ld. DR vehemently submitted that the date of uploading is not the date of receipt of the order and therefore the date on which the AO received the orders, that could only be the date for counting of the limitation period.

We have carefully considered the rival contentions and perused the orders of the ld. lower authorities. The undisputed fact shows that the direction of the ld. DRP are issued on 29.7.2024. These directions were issued by the email by the Secretary, DRP-1, Bengaluru. On 29.7.2024 at 1.18 PM through email to the assessee as well as to the TPO and the AO. The ld. DRP through its Secretary has also confirmed that the DRP directions were uploaded on ITBA System on 29.7.2024. According to the provisions of section 144C(13) of the Act, the ld. AO shall upon the receipt of the directions, within one month from the end of the month in which such directions are received, shall complete the assessment. In this case, as the DRP directions were uploaded and receipt of the direction by the email by the ld. AO is 29.7.2024, therefore the time limit provided u/s. 144C(13) expires on 31.8.2024. Admittedly the assessment order is passed on 24.9.2024, therefore the order passed by the ld. AO is barred by limitation and hence quashed. If we consider the date of uploading [29-07-2024] or the date of email [29-07-2024] as the date of receipt of the order, in either case, the order passed by the ld. AO cannot be held to be passed in time.

Accordingly the impugned assessment order passed on 24.9.2024, relying upon several judicial precedents cited before us and in the absence of any details submitted by the Revenue about the date of receipt of the order, is quashed. Ground No.2 of the appeal is allowed.

In view of the above order in ground No.2, no other grounds of appeal are required to be adjudicated.

In the result, the appeal filed by the assessee is allowed accordingly.