KOCH BUSINESS SOLUTIONS INDIA PRIVATE LIMITED,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-4(3)(1), BANGALORE

This appeal at the instance of the assessee is directed against the order of ld. AO dated 29.7.2024 vide DIN: ITBA/AST/S/143(3)/2024-25/1067104239(1) passed u/s. 143(3)

The assessee has raised the following grounds of appeal:-

The assessee in the present case has also filed a petition on 21.3.2025 seeking admission of additional grounds, which are reproduced below for ease of reference & convenience:

Since the assessee has raised the additional ground of appeal which is purely legal in nature, we deemed it fit & proper to first adjudicate this legal ground as raised by the assessee and if the necessity so desire, we will further proceed to adjudicate other grounds of appeal as raised by the assessee.

Now the brief facts of the case are that the assessee company is a wholly owned subsidiary of Koch Capabilities International Holdings, LLC. During the assessment year 2020-21, the assessee company provided IT support services to the entities within the Koch Group. The assessee company is compensated on a cost-plus markup of 10%. The assessee company filed its original return of income for the assessment year 2020-21 on 9.2.2021 declaring total income of Rs.11,87,46,830/-. The said return was thereafter processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny under CASS and accordingly notices u/s 143(2) as well as 142(1) of the Act along with show cause notice were issued and duly served upon the assessee. In response to these notices, the assessee company filed its submissions from time to time. The arguments and details furnished by the assessee company were carefully perused and taken into consideration by the AO.

Aggrieved by the order of the AO dated 29.7.2024, the assessee company has filed the present appeal before this Tribunal. The assessee has also filed large volume of paper books on merits of the case along with the synopsis in support of its case.

Before us, the ld. A.R. of the assessee CA Chavali Narayan strongly relied on the additional legal ground raised with regard to validity of the final assessment order passed on 29.7.2024 and vehemently submitted that the said order dated 29.7.2024 is barred by limitation. The ld. A.R. further submitted that as per the provisions of section 144C(13) of the Act, the AO was required to pass the final assessment order within one month from the end of the month in which the direction of the ld. DRP is received. Further, the ld. A.R. submitted that the AO should have passed the final assessment order by 30.6.2024. However, in the present case, the AO had passed the final assessment order only on 29.7.2024 and accordingly, same is in direct violation of the time limit prescribed u/s 144C(13) of the Act and liable to be quashed. The ld. A.R. submitted that on 29.5.2024, the ld. DRP’s directions were uploaded on the portal and the DIN was also generated on the same day and hence, admittedly the last date to pass the final assessment order was 30.6.2024 and therefore, the final IT(TP)A No.1844/Bang/2024 & SA No.35/Bang/2025 Koch Business Solutions India Pvt. Ltd., Bengaluru Page 11 of 50 assessment order passed on 29.7.2024 is clearly barred by limitation and liable to be quashed.

The ld. CIT-D.R. Dr. Divya K.J on the other hand heavily supported the order of the AO and vehemently submitted that the Faceless Assessing Officer(FAO) had not received any such directions issued by the DRP till 25/07/2024 & the FAO felt the need to pass the assessment order within one month from the end of the month in which such direction is received by holding that following the provisions of section 144C(12) of the Act, the DRP directions were supposed to be passed on or before 30/06/2024. It is in view of this, that FAO had passed the Order within July, 2024 as contended in the letter dated 25/07/2024 as the FAO had left with no alternative but to pass the final order on draft assessment order only. Further, the ld. DR Submitted that the directions of the ld. DRP was received neither by the JAO nor FAO & that’s why the FAO had made a request to ascertain the details of receipt of DRP directions. Lastly the ld. DR submitted that the FAO had considered the order passed by the TPO while giving effect to the directions of the Hon’ble DRP. The ld. DR also submitted the copy of the request letter dated 25/07/2024 by the FAO regarding the non-receipt of directions from ld. DRP as well as report of the JAO on the additional grounds as raised by the assessee which are reproduced below for ease of reference & convenience:-

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.

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.

Mr. Narayanasamy has circulated a screen shot of the 360 degree view, that presents as follows: matter not printed here Since the fields in the above image are not clear, the screen shot as provided by the Department is inserted at this point as page 18.

Our understanding of the 360 degree view page is that on entering the details of the assessee including the PAN number and the assessment year, the form would auto populate in regard to all details relating to that assessee including present status of proceedings and all orders, letters and notices.

Learned Standing Counsel draws attention to letter dated 12.12.2024 from the Secretariat of the DRP, specifically the portion where the DRP states that ‘no separate mail had been sent to AO or FAO’. The Assessing Officer thus appears to have been awaiting personal intimation of the order to his e-mail ID.

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 real-time.

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.

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.” 9.2 From the perusal of the advisory issued by the ITBA team on “Visibility of orders passed by 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. In our considered opinion, the DRP directions either through online system mode or through manual system mode once digitally signed and uploaded by the DRP users is available to the AO in the ITBA system and hence the clock starts ticking for the AO from the date of uploading the order by the DRP in the ITBA portal. Once the directions was uploaded in the ITBA portal, the same was received by the AO on the same date of uploading itself. 9.3 In this regard, it is also relevant to take note of the following observations of Hon’ble High Court of Bombay in the case of Vodafone India Ltd. Vs. CPC, Bengaluru reported in (2023) 459 ITR 413 which held as under :- “5. In the meantime, the TPO passed an order proposing an adjustment to the value of the international transaction of Petitioner. The Assessing Officer (“AO”) passed a draft order dated 29th December 2019 under Section 144C(1) of the Act for the relevant AY and proposed various additions/disallowances. Petitioner filed objections under Section 144C(2)(b) of the Act before the Dispute Resolution Panel (“DRP”) on 27th January 2020. A notice was issued by the DRP and Petitioner responded by filing relevant documents/evidence in support of objections raised by it. Finally the DRP issued directions dated 25th March 2021 under Section 144C(5) of the Act. The directions of DRP were uploaded on the Income Tax Business Application (“ITBA”) portal on the same date and the said directions were served on Petitioner vide e-mail dated 6th April 2021. The IT(TP)A No.1844/Bang/2024 & SA No.35/Bang/2025 Koch Business Solutions India Pvt. Ltd., Bengaluru Page 29 of 50 grievance of Petitioner essentially is that the AO failed to pass the final order in terms of the directions of DRP within 30 days, the period of limitation prescribed by Section 144C(13) of the Act and consequently prays that the ROI as filed originally has to be accepted and excess tax paid be refunded with interest.

After the petition was filed on 8th June 2023, the AO passed the assessment order dated 31st August 2023. The same has been placed on record as an additional document.

Mr. Mistri for Petitioner raised various grounds to justify seeking a refund from the department. He emphasized the admitted fact that despite the DRP issuing directions on 25th March 2021, no order was passed by the AO within the period prescribed by law. When no order is passed pursuant to the directions of DRP within the statutory period as prescribed under Section 144C(13) of the Act, the income declared by Petitioner is deemed to be accepted by the department and Petitioner is entitled to a refund of the amount paid by Petitioner in excess of the legitimate tax due from Petitioner. Mr. Mistri took us through the documents on record including the affidavits filed by the Chief Commissioner of Income Tax (International Taxation and Transfer Pricing) West Zone, Mumbai and also that filed by the Joint Commissioner of Income Tax, Ratlam, who was the JAO at the relevant point of time. Mr. Mistry also took us through the affidavits in sur- rejoinder filed by the Deputy Commissioner of Income Tax-5(2)(1), Mumbai (“DCIT”) and also the order sheet details filed by Respondents in support of the affidavit of DCIT. Mr. Mistri finally relied on a decision of this Court in the matter of Shell India Markets (P.) Ltd. v. Additional/Joint/Deputy/Assistant commissioner of Income-tax/ Income-tax Officer, National Faceless Assessment Centre, New Delhi [2022]139 taxmann.com 335(Bombay), to buttress his contention that the AO is duty bound to complete the assessment within the prescribed time set out under Section 144C(13) of the Act.

Mr. Devvrat Singh for the Revenue defended the acts of the department and that of the Faceless Assessing Officer (“FAO”) in passing the final order on 31st August 2023 upon receipt of the directions from the DRP. Mr. Singh’s contention is that the directions of DRP dated 25th March 2021 were received in the Case History Noting (“CHN”) of FAO only on 23rd August, 2023 and as the assessment in conformity with the directions of DRP was completed on 31st August 2023, it was within the one month prescribed under Section 144C(13) of the Act as the limitation period ran from the date of receipt by him of the order and not the date when the same were uploaded on the ITBA portal. Mr. Singh thus says that it was only on the receipt of the directions of DRP that the FAO was duty bound to complete the assessment, i.e., pass the final order. Mr. Singh thus prayed for dismissal of the petition.

Therefore, admittedly, the DRP issued the directions on 25th March 2021 whereas the assessment was completed and an order came to be passed on 31st August 2023.

At the outset it is important to note that the entire assessment proceedings are governed by the Faceless Assessment Mechanism under the scheme known as the e-Assessment Scheme (“eAS”), 2019 as notified by the Ministry of Finance (Department of Revenue) on 12th September 2019. The salient features of the scheme include defining the scope of scheme, jurisdiction of e-Assessment Centre, procedure for assessment, penalty proceedings for non-compliance amongst other features. The Central Government amended the FAS of 2019 and the first IT(TP)A No.1844/Bang/2024 & SA No.35/Bang/2025 Koch Business Solutions India Pvt. Ltd., Bengaluru Page 30 of 50 amendment came into effect on 17th February 2021. Paragraph 5(1) of the original scheme was substituted by the amendment. The amended paragraph 5(1) reads thus : “In the said Scheme, for sub-paragraph (1) of paragraph 5, the following sub- paragraph shall be substituted, namely,— (1) The assessment under this Scheme shall be made as per the following procedure, namely:— (i) the National e-Assessment Centre shall serve a notice on the assessee under sub-section (2) of section 143 of the Act; (ii) the assessee may, within fifteen days from the date of receipt of notice referred to in clause (i), file his response to the National e- Assessment Centre. (iii)……. (xxviii) the National e-Assessment Centre shall, - (a) upon receipt of acceptance as per clause (xxvii); or (b) if no objections are received from the eligible assessee within the period specified in sub-section (2) of section 144C of the Act, finalise the assessment within the time allowed under sub-section (4) of section 144C of the Act and serve a copy of such order and notice for initiating penalty proceedings, if any, to the assessee, alongwith the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment; (xxix) where the eligible assessee files his objections with the Dispute Resolution Panel, the National e-Assessment Centre shall upon receipt of the directions issued by the Dispute Resolution Panel under sub-section (5) of section 144C of the Act, forward such directions to the concerned assessment unit; (xxx) the assessment unit shall in conformity of the directions issued by the Dispute Resolution panel under sub-section (5) of section 144C of the Act prepare a draft assessment order in accordance with sub-section (13) of section 144C of the Act and send a copy of such order to the National e- Assessment Centre; (xxxi) the National e-Assessment Centre shall, upon receipt of draft assessment order referred to in clause (xxx), finalise the assessment within the time allowed under sub-section (13) of section 144C of the Act and serve a copy of such order and notice for initiating penalty proceedings, if any, upon the assessee, alongwith the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment; (xxxii) The National e-Assessment Centre shall, after completion of assessment, transfer all the electronic records of the case to the Assessing Officer having jurisdiction over the said case for such action as may be required under the Act.”

An analysis of eAS and the amendment indicate that various notices, summons and orders are received and issued by the National e-Assessment Centre (“NeAC”) set up to conduct e-assessment proceedings in a centralized manner. Paragraph 4(2) of the eAS provides as under : “4(2). All communication among the assessment unit, review unit, verification unit or technical unit or with the assessee or with any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making an assessment under the scheme shall be through the National e-Assessment Centre.” Thus, any notice, summons, order is deemed to have been received by the FAO once it is available to the NeAC.

Pursuant to our directions of 1st August 2023, two affidavits were filed, one by Mr. Satish Sharma, the Chief Commissioner of Income Tax (International Taxation and Transfer Pricing) West Zone, Mumbai and another by Ms. Anne Varghese, JCIT, Ratlam on 10th August 2023. The relevant portion of the affidavit of Mr. Satish Sharma reads thus : “4. I respectfully say that I have called the factual position and the relevant records from the DRP and perused them in connection with the directions of the Hon’ble Bombay High Court in the aforesaid order dated 01.08.2023 and accordingly, based on the record, I am conversant with the facts of the issue and I am able to depose the same. I respectfully say that I am filing this affidavit on the direction of the Hon’ble Bombay High Court in the aforesaid order for the limited purpose of explaining as to why, when the Faceless Assessment Regime had already kicked in, DRP’s directions were sent to the Jurisdictional Assessing Officer (hereafter JAO) instead of the Faceless Assessing Officer (hereafter FAO).

That the DRP passed directions (with DIN) on 25.03.2021 in the name of Vodafone Mobile Services Pvt. Ltd. (VMSL) (predecessor of Vodafone Idea Ltd.- VIL) by uploading the same on the Income Tax Bussiness Application System. A copy of the ITBA system generated noting/case history is hereto annexed and marked as EXHIBIT-1 . The DRP directions are automatically visible to FAO in the ITBA system, if any assessment work item is pending related to that particular PAN.

There is an additional feature on the ITBA system in the DRP segment from which communication through e-mail can be made through ITBA system. As precaution, the copy of direction was sent to the assessee and the JAO on their available e-mail IDs. The e-mails were sent on sameer.baig@vodafoneidea.com and mumbai.dcit5.2.2@ income tax.gov.in . These e-mails bounced and a copy of ITBA system generated delivery status is hereto annexed and marked as EXHIBIT- 2.

Therefore, as a matter of abundant precaution, the DRP ascertained the details of JAO [DCIT(5)(2)(1)] under whose domain the VMSL PAN was placed and delivered to him/her a downloaded physical copy of the uploaded/passed direction on 30.03.2021 for consequential actions on his/her part. Here it is stated that since the entire process was automated on the ITBA system, therefore, the DRP was not mandated to send a physical copy of the direction to the FAO, whose identity is not known to any authority. As mentioned above, the physical copy of the direction was sent to the JAO also only as an abundant precaution because the Faceless Assessment regime was new.

Further, the DRP also e-mailed a copy of the direction to the Petitioner on a different e-mail ID on 06.04.2021. The same e-mail is mentioned in the referred order of the Hon’ble Bombay HC.” (emphasis supplied) 14. The relevant portion of the affidavit of Ms. Anne Varghese reads thus : “3. I say that at the relevant time I was working as Jurisdictional Assessing Officer in my capacity as Deputy Commissioner of Income Tax 5(2)(1), Mumbai.

I respectfully say that Physical copy/offline order of the Dispute Resolution Panel (D.R.P.) dated 25.03.2021 was received in tapal/inward register by the Jurisdictional Assessing Officer in its office on 30.03.2021 in the case of “Vodafone Mobile Services Limited”.

I respectfully say that Document Identification Number (D.I.N.) had been duly generated for the directions of the D.R.P. which is visible on the first page of the hard copy of the D.R.P. directions received by the undersigned which clearly indicated that the directions by D.R.P. were passed digitally on the Income Tax Business Application (I.T.B.A.).

I respectfully state that it was under these circumstances that the undersigned was not required to forward the directions of D.R.P. to the concerned Faceless Assessing Officer.” (emphasis supplied) 15. Annexed to the affidavit of Mr. Satish Sharma is a screenshot of the CHN-Case History Notings of DRP proceedings uploaded on the ITBA portal. The screenshot is of the page as it appears on the ITBA portal. A perusal of the screenshot of CHN of DRP read with the affidavit filed by Mr. Satish Sharma, the CCIT and Ms. Anne Varghese, the JCIT, clearly indicate that once the DRP directions are uploaded and the Document Identification Number (“DIN”) is generated, which is also visible on the first page of the hard copy of DRP directions, the said document is visible to the AO of the Faceless Assessment Unit (“FAU”) having jurisdiction over the PAN of the assessee concerned. Thus, both the affiants agree that the DRP directions once uploaded on the ITBA portal are automatically visible to the FAO, if any assessment work item is pending related to a particular PAN. Admittedly assessment proceedings of Petitioner were pending. Thus, undoubtedly the DRP directions uploaded on the ITBA portal were readily and clearly visible and accessible to the FAO of assessee.

A reply affidavit in sur-rejoinder dated 14th September 2023 filed by Shri. L. A. Janbandhu, the Deputy Commissioner of Income Tax-5(2)(1), Mumbai also affirms that the DRP directions were uploaded on the ITBA portal on 25th March 2021. In fact Mr. Singh, in fairness admitted the directions of DRP were available on the ITBA portal. The defense of Respondents, however, was that the direction of DRP under Section 144C(5) of the Act were noted in the CHN of FAO only on 23rd August 2023 and hence, that is the day he should be deemed to have received it. On the Court putting a question to Mr. Singh as to how and under what mechanism are the directions of DRP noted in the CHN of FAO, Mr. Singh candidly stated that was entered by the FAO. The fact remains that the DRP directions were always visible and accessible to the FAO on the ITBA portal.

Mr. Singh made all attempts to persuade us that despite the ITBA portal displaying the DRP directions and the same being accessible to the FAO, it was only on 23rd August 2023 that the same were received by the FAO. We cannot accept this because, the E-assessment Scheme itself provides that all communication is deemed to have been received by the assessment units concerned once received through the NeAC. Thus, once the E-assessment Centre is in receipt of the DRP directions, the period of limitation runs from that day. There is no IT(TP)A No.1844/Bang/2024 & SA No.35/Bang/2025 Koch Business Solutions India Pvt. Ltd., Bengaluru Page 34 of 50 requirement of a deep dive in an analysis of the phrase ‘upon receipt of directions’ as it appears in Section 144C(13) of the Act. The fundamental principle of interpretation is to assign words their natural, original and precise meaning, provided that the words are clear and take into account the purpose of the Statute. It is settled law that a provision should be interpreted in its literal sense and given its natural effect. This is the elementary golden rule of interpretation of Statutes. Since there is no ambiguity pertaining to the phrase ‘upon receipt of the directions issued under Sub-section 5 of 144C of the Act, the AO shall …..’ there is no requirement of delving in a further in-depth analysis of the clear provision.

Another important aspect is that the FAO himself has not filed any affidavit to affirm the date on which he purportedly ‘received’ the directions of DRP. But in the affidavit of Mr. Janbandhu, it is explained that the contents of his affidavit are the inputs from the PCIT (AU) and CCIT (IT & TP) along with all the relevant records available in the office in connection with the issue as also the comments of FAO invited by him through the National Faceless Assessment Centre. He says that the procedure of handling writ litigation regarding proceedings by FAO are contained in the SOP dated 1st August 2022 issued by CBDT which have been followed in dealing with the present proceedings. Since said Mr. Janbandhu has affirmed that the affidavit contains the comments of FAO, we safely presume that the FAO has said what he will through this affidavit.

Surprising to note is not what is stated, but that which remains unstated in this affidavit. The deafening silence in the affidavit of Mr. Janbandhu, to the affirmed statements of Mr. Satish Sharma and Ms. Anne Varghese as quoted above itself speak volumes. Though Mr. Janbandhu admits being aware of the affidavits of Mr. Satish Sharma and Ms. Anne Varghese, there is neither any rebuttal nor an explanation to the statements of Mr. Satish Sharma and Ms. Anne Varghese regarding availability of DRP directions on the ITBA portal. That the DRP directions were automatically visible to the FAO in ITBA system, JAO was not mandated to forward the directions to FAO whose identity was not known to any authority etc. Mr. Janbandhu states that only on 23rd August 2023 the JAO has uploaded the DRP order dated 25th March 2021 in response to his letter dated 23rd August 2023 and therefore, he received the order only on 23rd August 2023 and hence, the assessment was within time. This according to us is an unacceptable statement in view of what Ms. Anne Varghese in her affidavit has stated that the physical copy was not forwarded to the FAO since it was ascertained that the directions dated 25th March 2021 of the DRP were available under “the view Downloadorder/ letter/notices Tab” functionality of ITBA and those were visible to the FAO also who had jurisdiction over the PAN. Moreover, Mr. Satish Sharma states the DRP directions cannot be sent to the FAO directly because no authority will be aware of his identity. Though we had highlighted all these defects in Revenue’s case in our order dated 5th September 2023, no attempt has been made to clarify. It is thus very difficult to agree with the proposition advanced by Mr. Singh that as per the CHN the DRP direction was received by the FAO only on 23rd August 2023. There is no whisper of any explanation as to why the FAO, who was seized with the pending assessment of Petitioner, remained inactive and silent for two long years and swung into action only when information about filing of this writ petition was uploaded on the CHN. Strangely enough a noting pertaining to this writ petition filed on 8th June 2023 appears on the CHN of 11th July 2023, but still the DRP directions of 25th March 2021 appear only on IT(TP)A No.1844/Bang/2024 & SA No.35/Bang/2025 Koch Business Solutions India Pvt. Ltd., Bengaluru Page 35 of 50 23rd August 2023. No explanation on behalf of the department is forthcoming. We have to draw adverse inference.

Section 144C of the Act is a self contained provision which carves out a separate class of assessees, i.e., ‘eligible assessee’. Section 144C of the Act was inserted in the Finance Act of 2009 and came into effect from 1st October 2009. In the notes on clauses to the Finance Bill, 2009 (Budget 2009-2010), the reason for insertion of Section 144C is given as under : “The subjects of transfer pricing audit and the taxation of foreign company are at nascent stage in India. Often the Assessing Officers and Transfer Pricing Officers tend to take a conservative view. The correction of such view take very long time with the existing appellate structure. With a view to provide speedy disposal, it is proposed to amend the Income-tax Act so as to create an alternative dispute resolution mechanism within the income-tax department and accordingly, section 144C has been proposed to be inserted so as to provide inter alia the Dispute Resolution Panel as an alternative dispute resolution mechanism.”

Thus, if the provisions of Section 144C as mandated by the Statute are not strictly adhered the entire object of providing for an alternate redressal mechanism in the form of DRP stand defeated. That is not the intention of the legislature when the provision was introduced in the Act. Section 144C(10) of the Act provide that the directions of DRP are binding on the AO. By failing to pass any order in terms of the provision, the AO cannot be permitted to defeat the entire exercise and render the same futile. When a Statute prescribes the power to do a certain thing in a certain way, then the thing must be done in that way and other methods of performance are forbidden. Once the statute has prescribed a limitation period for passing the final order, it is expected that the internal procedure of the department should mould itself to give meaning to and act in aid of the provision. Any procedural defect (there is none in this case) in the internal mechanism of the working of E-assessment Scheme, cannot operate against the interest of assessee. Hence, the FAO cannot be believed that the DRP direction was received by him only on 23rd August 2023 despite being uploaded on the ITBA portal on 25th March 2021. The failure on the part of department to follow the procedure under Section 144C of the Act is not merely a procedural irregularity, but is an illegality and vitiates the entire proceeding.

In a decision in the matter of Turner International India Private Limited v. Deputy Commissioner of Income Tax, Circle-25(2), New Delhi 2017 SCC OnLine DEL 8441, the Delhi High Court has held that the question “whether the final assessment order stands vitiated for failure to adhere to the mandatory requirements of Section 144C of the Act?”, is no longer res integra and any order passed contrary to Section 144C of the Act cannot be sustained.

In a decision cited by Mr. Mistri in the matter of Shell India Markets (P.) Ltd. (supra), this Court has also held as follows : “10. Sub-section (13) of Section 144C, therefore, is very clear inasmuch as the Assessing Officer shall, upon receipt of the directions issued under Sub-section (5), in conformity with the directions, complete the assessment within one month from the end of the month in which such direction is received. Sub-section (13) also provides that the Assessing Officer can complete the assessment without providing any further opportunity of being heard to the assessee. This means that the moment the Assessing Officer receives the directions under Sub-section (5), he has to IT(TP)A No.1844/Bang/2024 & SA No.35/Bang/2025 Koch Business Solutions India Pvt. Ltd., Bengaluru Page 36 of 50 straightaway complete the assessment and he does not even have to hear the assessee. The Assessing Officer shall simply comply with the directions received from the DRP within one month from the end of the month in which such directions is received.”

In view of the aforesaid discussion, we have no hesitation in holding that the assessment order dated 31st August 2023 passed by FAO two years after the DRP directions, is time barred and cannot be sustained. Consequently, the ROI as filed has to be accepted. Petitioner is entitled to receive the refund together with interest, in accordance with law. The procedure to be completed within 30 days of this order being unloaded. This would, however, not preclude revenue, should the need arise, from reopening the assessment by following due process and in accordance with law.”

Before dealing with rival contentions, it is apposite to consider Sections 144C(13) and 282(1)(c) of the Income Tax Act and Section 13 of the I.T. Act which reads thus: “Section 144C: Reference to dispute resolution panel:- (1) to (12)… (13) 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 insection 153 or section 153B, the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received.” “Section 282: Service of notice generally:- (1) The service of a notice or summon or requisition or order or any other communication under this Act (hereafter in this section referred to as “communication”) may be made by delivering or transmitting a copy thereof, to the person therein named,— (a) and (b)… (c) in the form of any electronic record as provided in Chapter IV of the Information Technology Act, 2000 (21 of 2000); or” “Section 13: Time and place of despatch and receipt of electronic record.:- (1) Save as otherwise agreed to between the originator and the addressee, the despatch of an electronic record occurs when it enters a computer resource outside the control of the originator. (2) Save as otherwise agreed between the originator and the addressee, the time of receipt of an electronic record shall be determined as follows, namely:- (a) if the addressee has designated a computer resource for the purpose of receiving electronic records,-(i)receipt occurs at the time when the electronic IT(TP)A No.1844/Bang/2024 & SA No.35/Bang/2025 Koch Business Solutions India Pvt. Ltd., Bengaluru Page 37 of 50 record enters the designated computer resource; or(ii)if the electronic record is sent to a computer resource of the addressee that is not the designated computer resource, receipt occurs at the time when the electronic record is retrieved by the addressee; (b) if the addressee has not designated a computer resource along with specified timings, if any, receipt occurs when the electronic record enters the computer resource of the addressee.” (Emphasis Supplied) 14. The E-Assessment Scheme, 2019 placed reliance on Section 13 of the I.T. Act for the purpose of delivery of electronic record. The relevant portion reads thus: “Delivery of electronic record: 10. (1) Every notice or order or any other electronic communication under this Scheme shall be delivered to the addressee, being the assessee, by way of:- (a) placing an authenticated copy thereof in the assessee’s registered account; or (b) sending an authenticated copy thereof to the registered email address of the assessee or his authorized representative; or (c) uploading an authenticated copy on the assessee’s Mobile App; and followed by a real time alert. (2) and (3) xxx (4) The time and place of dispatch and receipt of electronic record shall be determined in accordance with the provisions of Section 13 of the Information Technology Act, 2000 (21 of 2000).” (Emphasis Supplied) 15. The Delhi High Court in Louis Dreyfus Company India Private Limited (supra) held as under: “15. In terms of sub-section (13) of Section 144C of the Act, the AO is mandated to complete the assessment ?in conformity with the directions as framed by the DRP. That very provision commands the AO to complete the assessment within one month from the end of the month in which such a direction is received.

As is manifest from a reading of sub-section (13) of Section 144C of the Act, the AO is not accorded any discretion in the framing of an order of assessment once directions have come to be framed by the DRP. In fact, the provision requires the AO to frame an order of assessment in conformity with those directions and without providing any further opportunity of hearing to the assessee. This principle of law has been affirmed by the Bombay High Court in the aforenoted paragraphs of Vodafone Idea and in Shell India Markets Private Limited v. Additional Commissioner of Income Tax Officer, National Faceless Assessment Centre &Ors10. The relevant paragraph of the decision in Shell India are extracted hereinbelow: ‘10. Sub-section (13) of Section 144C, therefore, is very clear inasmuch as the Assessing Officer shall, upon receipt of the directions issued under sub-section (5), in conformity with the directions, complete the assessment within one month from the end of the month in which such direction is received. Sub-section (13) also provides that the Assessing Officer can complete the assessment without providing any further opportunity of being heard to the assessee. This means that the moment the Assessing Officer receives the directions under sub-section (5), he has to straightaway complete the assessment and he does not even have to hear the assessee. The Assessing Officer shall simply comply with the directions received IT(TP)A No.1844/Bang/2024 & SA No.35/Bang/2025 Koch Business Solutions India Pvt. Ltd., Bengaluru Page 38 of 50 from the DRP within one month from the end of the month in which such direction is received.’ 20. Undisputedly, the directive of the DRP came to be uploaded on the ITBA portal on 24 June 2022. It is additionally stated to have been dispatched through Speed Post to the third respondent (TPO) and the fourth respondent (Additional/Joint/Deputy/Assistant Commissioner of Income Tax, National Faceless Assessment Centre, New Delhi) on 27 June 2022. It is thereafter that the TPO appears to have passed the order dated 25 July 2022.

We, however note that paragraph 4(2) of the E-as, 2019 makes the following salient provisions:- ‘4(2). All communication among the assessment unit, review unit, verification unit or technical unit or with the assesse or any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making an assessment under this Scheme shall be through the National e-assessment Centre.’ 22. It is thus manifest that as per the provisions of E-as, 2019, all orders, notices and decisions have to be necessarily uploaded on the ITBA portal and as part of the larger faceless assessment regime which now holds the field. The uploading of the directive of the DRP on the ITBA portal would thus constitute valid and sufficient service and the period of limitation as prescribed in Section 144C(13) of the Act would be liable to be computed bearing that crucial date in mind. Once the aforesaid position becomes clear, it is evident that the order of assessment, if at all could have been framed lastly by 31 July 2022. There has thus been an abject failure on the part of the first respondent to comply with the mandatory timelines as incorporated in the aforenoted provisions. Accordingly, the writ petition is liable to be allowed and the impugned order of assessment and the consequential penalty proceedings are thus liable to be set aside on this short score alone.” (Emphasis Supplied) 16. The Bombay High Court in Vodafone Idea Ltd. (supra) opened as under: “15. Annexed to the affidavit of Mr. Satish Sharma is a screenshot of the CHN- Case History Notings of the Dispute Resolution Panel proceedings uploaded on the Income-tax Business Application portal. The screenshot is of the page as it appears on the Income-tax Business Application portal. A perusal of the screenshot of Case History Notings of the Dispute Resolution Panel read with the affidavit filed by Mr. Satish Sharma, the Chief Commissioner of Income-tax and Ms. Anne Varghese, the Joint Commissioner of Income-tax, clearly indicate that once the DRP directions are uploaded and the Document Identification Number ("DIN") is generated, which is also visible on the first page of the hard copy of the DRP directions, the said document is visible to the AO of the Faceless Assessment Unit ("FAU") having jurisdiction over the permanent account number of the assessee concerned. Thus, both the affiants agree that the Dispute Resolution Panel directions once uploaded on the Income-tax Business Application portal are automatically visible to the Faceless Assessing Officer, if any assessment work item is pending related to a particular permanent account number. Admittedly assessment proceedings of the petitioner were pending. Thus, undoubtedly the Dispute Resolution Panel directions uploaded on the Income-tax Business Application portal were readily and clearly visible and accessible to the Faceless Assessing Officer of the assessee. 16...

The Madras High Court in Taeyang Metal India (P) Ltd. (supra) followed the principle laid down by the Delhi High Court in the aforesaid judgment.

The common string traveling through the judgments of the aforesaid three High Courts leaves no room for any doubt that the Courts have taken a uniform view that Section 144C(13) mandates the assessing officer to complete the assessment within one month from the end of the month in which such a direction is issued. Interestingly, the Bombay High Court considered paragraph No.4(2) of Scheme of 2019 which makes it clear that all communications among the assessment unit, review unit, verification unit or technical unit or with the assessee or with any other person shall be through the national e-assessment centre. The use of words IT(TP)A No.1844/Bang/2024 & SA No.35/Bang/2025 Koch Business Solutions India Pvt. Ltd., Bengaluru Page 40 of 50 ‘any other person’ makes it very wide and shows the intention of the scheme makers that they intended to bring within its fold all nature of communications which shall be made through national e-assessment centre.

The Delhi High Court in Louis Dreyfus Company India Private Limited (supra) further held that it is obligatory under the scheme to necessarily upload the communication on the ITBA portal. Upon uploading the information on the portal, the period of limitation as prescribed under Section 144C(13) of the Income Tax Act would be liable to be computed bearing that crucial date in mind.

Importantly, the Bombay High Court in Vodafone Idea Ltd. (supra) poignantly held that as per the said scheme once e-assessment centre is in receipt of DRP directions, the period of limitation runs from that date. No further deep dive is required in view of language of Section 144C(13) of the Income Tax Act.

Sri Vijhay K Punna, learned Standing Counsel for revenue, placed reliance on the judgment of Supreme Court in the case of National Faceless Assessment Centre (supra). The said case is arising out of faceless assessment procedure envisaged in Section 144B of the Income Tax Act. The Apex Court while upholding the view of the High Court observed that faceless assessment scheme came into being recently and therefore, the revenue ought to have been given some leverage to correct themselves and take corrective measures. The said observation of the Supreme Court is related to the faceless regime and cannot be stretched and made applicable in this case. This is trite that the precedential value of a judgment relates to the point which has been actually decided and not what is logically flowing from it (see Dr. (Mrs.) Chanchal Goyal v. State of Rajasthan 2003 (3) SCC 485). It is equally settled that a singular different fact or point may change the precedential value of a judgment (see Bhavnagar University Vs. Palitana Sugar Mill (P) Ltd. (2003) 2 SCC 111).

So far, the judgment in the case of Commissioner of Income Tax, Chennai (supra) is concerned on which reliance is placed by Sri Vijhay K Punna, it is profitable to note that in the said case, the Supreme Court considered Section 263(2) of the Income Tax Act, in the said Section the word used is ‘made’ and not ‘receipt of the order’. The Supreme Court emphasized the cardinal principle of the law that provision of statute is to be read as it is and nothing is to be added or taken away from the provision of the statute. In other words, this is well settled that when language of statute is clear and unambiguous, it has to be given effect to irrespective of its consequences (see Nelson Motis vs. Union of India 1992 (4) SCC 711).

The pivotal question is whether in view of the language employed in Section 144C(13) whether directions of DRP can be said to be received by the assessing officer on 30.06.2022. A conjoint reading of Section 144C (5) and (13) makes it clear that upon receipt of directions issued under Section 144C(5), it is imperative for assessing officer to complete the proceedings within one month from end of the month in which such a direction is received. Thus, key words used in Section 144C(13) are ‘upon receipt of directions issued under Sub-Section (5)’ .

Although, Delhi, Bombay and Madras High Courts have already taken a view and we respectfully agree with that once such directions of DRP are uploaded on the portal, the DRP lost control over it and date on which it entered the portal, the recipient i.e, the assessing officer comes to know about it.

To elaborate, it is profitable to refer to Section 13(1) of the I.T.Act. This Sub- Section deals with ‘despatch of electronic record’ and envisages that ‘despatch’ of IT(TP)A No.1844/Bang/2024 & SA No.35/Bang/2025 Koch Business Solutions India Pvt. Ltd., Bengaluru Page 41 of 50 an electronic record is when it enters the computer resource outside the control of originator. Indisputedly, in this case, the ‘originator’ is the DRP. Sub-Section (za) of Section 2 of the I.T.Act defines the word ‘originator’ and reads thus: “Section 2: Definitions (za) ?originator means a person who sends, generates, stores or transmits any electronic message or causes any electronic message to be sent, generated, stored or transmitted to any other person but does not include an intermediary;” (Emphasis Supplied) 26. Once ‘originator’ enters a computer resource outside his control, ‘despatch’ takes place. Sub-Section 2 (a) of Section 13 of the I.T.Act deals with ‘receipt’ which makes it clear that ‘receipt’ occurs at the time when the electronic record enters the designated computer resource. Thus, the meaning of ‘despatch’ or ‘receipt’ is elaborately defined in aforesaid Sub-sections of Section 13 of the I.T.Act. The word ‘computer resource’ is also defined under Section 2(k) of the I.T.Act, which reads thus: “Section 2: Definitions (k) ? computer resource means computer, computer system, computer network, data, computer data base or software;”

In the instant case, parties have taken a diametrically opposite view on the aspect whether the directions uploaded on the portal on 30.06.2022 can be treated to be ‘receipt’ on the part of the assessing officer. Sri Vijhay K Punna, learned Standing Counsel for revenue contends that ‘receipt’ will be the date when the e- mail was received by the revenue containing the DRP directions i.e., on 05.07.2020.

As per the view taken by the aforesaid three High Courts there is no doubt that when the originator/DRP sends its directions in computer resource outside its control, it amounts to ‘despatch’ and similarly, ‘receipt’ takes place when said electronic record enters the computer resource.

Section 282 of the Income Tax Act on which reliance was placed by Sri Vijhay K Punna, learned Standing Counsel for revenue makes it clear that in Sub-Section 1(c) of Section 282, the communication through electronic record as per Chapter IV of the I.T.Act was recognized and treated to be service of notice generally. Chapter IV of the I.T.Act contains Section 13, which envisages time, place of ‘despatch’ and ‘receipt’ of electronic record.

In order to meticulously examine the aspect of ‘despatch’ and ‘receipt’, in the present case, it is apt to quote the relevant portion of letter dated 05.03.2024 filed along with I.A.No.1 of 2024 in the present matter, which reads as under: “2. In this regard, it is hereby stated that the direction dated 30.06.2022 were uploaded on ITBA portal on 30.06.2022. Further, physical copy of the Directions was also sent to the Assessing Officer on 30.06.2022 through Speed Post.” ( EmphasisSupplied ) 31. The Income Tax Department through communication dated 30.06.2022 (Annexure P-19) informed that the order under Section 144C(5) dated 30.06.2022 is having Document No.(DIN) ITBA/DRP/M/144C(5)/2022-23/1043689612(1). This is a system generated document and it does not require any signature. A conjoint reading of communications dated 30.01.2024 and 05.03.2024 (Annexure P-18) and communication dated 30.06.2022 (Annexure P-19) leaves no room for any doubt that DRP’s directions were despatched on 30.06.2022 and also uploaded on the portal on the same date. Thus, the DRP/originator had lost IT(TP)A No.1844/Bang/2024 & SA No.35/Bang/2025 Koch Business Solutions India Pvt. Ltd., Bengaluru Page 42 of 50 control over it on the date and time the said directions were uploaded on the portal. Hence, same must be treated to be a ‘receipt’ by the recipient i.e., the assessing officer on the same day i.e., 30.06.2022. (See paragraph No.26.7 of Suman Jeet Agarwal v. Income-tax Officer (2022) 449 ITR 517, where the Delhi High Court poignantly held that the portal of the department is the ‘computer resource in the control of the department’).

In view of forgoing discussion, there is no cavil of doubt that assessing officer received the DRP’s directions on 30.06.2022 and therefore, the limitation must be counted from that date and not from 05.07.2022. The impugned assessment orders dated 30.08.2022 and 01.09.2022 that were issued counting the limitation from 05.07.2022 in both the Writ Petitions are liable to be set aside as the same are issued beyond permissible period of limitation.”

In terms of sub-section (13) of Section 144C of the Act, the AO is mandated to complete the assessment ?in conformity with the directions? as framed by the DRP. That very provision commands the AO to complete the assessment within one month from the end of the month in which such a direction is received.

This is evident from Section 144C of the Act which is extracted hereinbelow:- “144-C. Reference to Dispute Resolution Panel.—(1) The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation which is prejudicial to the interest of such assessee. (2) On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order,— (a) file his acceptance of the variations to the Assessing Officer; or (b) file his objections, if any, to such variation with,— (i) the Dispute Resolution Panel; and (ii) the Assessing Officer. (3) The Assessing Officer shall complete the assessment on the basis of the draft order, if— (a) the assessee intimates to the Assessing Officer the acceptance of the variation; or (b) no objections are received within the period specified in sub-section (2).

In this backdrop, we note that both the judgments of the Bombay High Court in Shell India and Vodafone Idea construe the time lines as provided in Section 144C to be mandatory in character. In our considered opinion, this interpretation is in accord with the intent behind insertion of that provision and the bare text and spirit of that section. Thus, we accord our approval to the interpretation as set out in the aforenoted decisions of the Bombay High Court.

Further, the procedure of assessment as provided under Section 144C does not envisage or contemplate the interdiction or involvement of the TPO once a directive has been framed by the DRP. The role of the TPO comes to an end once an order as contemplated under Section 92 CA(4) of the Act has come to be framed and remitted to the AO. There was thus no occasion for the TPO having resumed proceedings post the passing of the direction by the DRP on 20 June 2022.

Undisputedly, the directive of the DRP came to be uploaded on the ITBA portal on 24 June 2022. It is additionally stated to have been dispatched through Speed Post to the third respondent (TPO) and the fourth respondent (Additional/Joint/Deputy/Assistant Commissioner of Income Tax, National Faceless Assessment Centre, New Delhi) on 27 June 2022. It is thereafter that the TPO appears to have passed the order dated 25 July 2022.

We, however note that paragraph 4(2) of the E-as, 2019 makes the following salient provisions:- “4(2). All communication among the assessment unit, review unit, verification unit or technical unit or with the assesse or any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making an assessment under this Scheme shall be through the National e-assessment Centre.”

It is thus manifest that as per the provisions of E-as, 2019, all orders, notices and decisions have to be necessarily uploaded on the ITBA portal and as part of the larger faceless assessment regime which now holds the field. The uploading of the directive of the DRP on the ITBA portal would thus constitute valid and sufficient service and the period of limitation as prescribed in Section 144C(13) of the Act would be liable to be computed bearing that crucial date in mind. Once the aforesaid position becomes clear, it is evident that the order of assessment, if at all could have been framed lastly by 31 July 2022. There has thus been an abject failure on the part of the first respondent to comply with the mandatory timelines as incorporated in the aforenoted provisions. Accordingly, the writ petition is liable to be allowed and the impugned order of assessment and the consequential penalty proceedings are thus liable to be set aside on this short score alone.” 9.6 The Jurisdictional High Court of Karnataka in the case of M/s. Himalaya Drug Company V. The Deputy Commissioner Of Income Tax Central Circle-1 (1) Bengaluru reported in (KAR-HC) 2025 ITL 5117 has held as under:- 9. The facts are not in dispute. The appellant/assessee filed returns for the year 2011-12 on 30.09.2011, within the time prescribed. On process of the returns, notice under Section 143(2) of the IT Act was issued to the appellant calling for certain information. Thereafter, the case of the appellant was referred to the IT(TP)A No.1844/Bang/2024 & SA No.35/Bang/2025 Koch Business Solutions India Pvt. Ltd., Bengaluru Page 46 of 50 Transfer Pricing Officer under Section 92CA of the IT Act. The Transfer Pricing Officer passed order under Section 92CA of IT Act on 30.01.2015 for the assessment year 2011-12. Subsequently, the respondent-Revenue passed draft assessment order under Section 144C read with Section 143(2) of the IT Act on 27.03.2015. Against the said draft assessment order, appellant filed objections/appeal before the DRP and the DRP after hearing, passed order on 17.12.2015 under Section 144C(5) of the IT Act. The said order passed by the DRP was communicated to the Assessing Officer on 29.12.2015. On receipt of the order/direction of the DRP, the Assessing Officer is required to pass order in terms of Sub-section (13) of Section 144C of the IT Act. Section 144C(13) of the IT Act reads as follows: “144C. (13) 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 or section 153B, the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received.”

In terms of the above provision, the Assessing Officer shall complete the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received. In the instant case, the Assessing Officer received the direction from the DRP passed under Sub-Section (5) of Section 144C of the IT Act on 29.12.2015 and the Assessing Officer was required to pass assessment order within one month from the end of December 2015 i.e., the Assessing Officer ought to have passed assessment order on or before 31.01.2016. However, the Assessing Officer passed assessment order only on 18.02.2016, beyond the prescribed time under Sub- Section (13) of Section 144C of the IT Act. Under Sub-Section (13) of Section 144C of the IT Act, the Assessing Officer is mandated to pass order within the time prescribed thereunder and no discretion is vested with the Assessing Officer. Under Sub-Section (13) of Section 144C of the IT Act, the Assessing Officer on receipt of direction under Sub-Section (5) from DRP, mandated to complete the assessment within one month from the end of the month in which such direction is received. In other words, immediately on receipt of direction from the DRP under Sub-Section (5), the Assessing Officer shall complete the assessment within the timeline. The timeline prescribed under Sub-Section 144C are to be construed as mandatory.

The High Court of Delhi in the case of LOUIS DREYFUS COMPANY INDIA (P) LTD., (supra) was considering an identical factual situation and at paragraphs 17, 18, 19 and 20, held as follows: “17. As is manifest from a reading of subsection (13) of Section 144-C of the Act, the assessing officer is not accorded any discretion in the framing of an order of assessment once directions have come to be framed by the Dispute Resolution Panel. In fact, the provision requires the assessing officer to frame an order of assessment in conformity with those directions and without providing any further opportunity of hearing to the assessee. This principle of law has been affirmed by the Bombay High Court in the aforenoted paras of Vodafone Idea Ltd. case [Vodafone Idea Ltd. v. Central Processing Centre, (2023) 459 ITR 413 : 2023 SCC OnLine IT(TP)A No.1844/Bang/2024 & SA No.35/Bang/2025 Koch Business Solutions India Pvt. Ltd., Bengaluru Page 47 of 50 Bom 2464] and in Shell India Markets (P) Ltd. v. CIT [Shell India Markets (P) Ltd. v. CIT, (2022) 443 ITR 366 : 2022 SCC OnLine Bom 379] judgment dated 14-2-2022 in WP No. 3298 of 2021. The relevant para of the decision in Shell India Markets (P) Ltd. case [Shell India Markets (P) Ltd. v. CIT, (2022) 443 ITR 366 : 2022 SCC OnLine Bom 379] are extracted hereinbelow: “10. Sub-section (13) of Section 144-C, therefore, is very clear inasmuch as the assessing officer shall, upon receipt of the directions issued under sub-section (5), in conformity with the directions, complete the assessment within one month from the end of the month in which such direction is received. Sub-section (13) also provides that the assessing officer can complete the assessment without providing any further opportunity of being heard to the assessee. This means that the moment the assessing officer receives the directions under sub-section (5), he has to straightaway complete the assessment, and he does not even have to hear the assessee. The assessing officer shall simply comply with the directions received from the Dispute Resolution Panel within one month from the end of the month in which such direction is received.”

In this backdrop, we note that both the judgments of the Bombay High Court in Shell India Markets (P) Ltd. case [Shell India Markets (P) Ltd. v. CIT, (2022) 443 ITR 366 : 2022 SCC OnLine Bom 379] and Vodafone Idea Ltd. case [Vodafone Idea Ltd. v. Central Processing Centre, (2023) 459 ITR 413 : 2023 SCC OnLine Bom 2464] construe the timelines as provided in Section 144-C to be mandatory in character. In our considered opinion, this interpretation is in accord with the intent behind insertion of that provision and the bare text and spirit of that section. Thus, we accord our approval to the interpretation as set out in the aforenoted decisions of the Bombay High Court.

Further, the procedure of assessment as provided under Section 144-C does not envisage or contemplate the interdiction or involvement of the transfer pricing officer once a directive has been framed by the Dispute Resolution Panel. The role of the transfer pricing officer comes to an end once an order as contemplated under Section 92-CA(4) of the Act has come to be framed and remitted to the assessing officer. There was thus no occasion for the transfer pricing officer having resumed proceedings post the passing of the direction by the Dispute Resolution Panel on 20-6- 2022.

Undisputedly, the directive of the Dispute Resolution Panel came to be uploaded on the Income Tax Business Application portal on 24-6-2022. It is additionally stated to have been dispatched through speed post to the third respondent (TPO) and the fourth IT(TP)A No.1844/Bang/2024 & SA No.35/Bang/2025 Koch Business Solutions India Pvt. Ltd., Bengaluru Page 48 of 50 respondent (Additional/Joint/Deputy/Assistant Commissioner of Income Tax, National Faceless Assessment Centre, New Delhi) on 27-6-2022. It is thereafter that the transfer pricing officer appears to have passed the order dated 25 July 2022.”

In RAPISCAN SYSTEMS PVT. LIMITED (supra), the Division Bench of Telangana High Court while considering Section 144C of the IT Act at paragraph 32 and 33 has observed as follows: “32. In view of the forgoing discussion, there is no cavil of doubt that the Assessing Officer received the Dispute Resolution Panel's directions on June 30, 2022 and, therefore, the limitation must be counted from that date and not from July 5, 2022. The impugned assessment orders dated August 30, 2022 and September 1, 2022 that were issued counting the limitation from July 5, 2022 in both the writ petitions are liable to be set aside as the same are issued beyond permissible period of limitation.

In the result, both the writ petitions are allowed by setting aside the impugned assessment orders dated August 30, 2022 and September 1, 2022. There shall be no order as to costs. Miscellaneous applications, if any, shall stand closed.”

The reason of the Tribunal while passing the impugned order placing reliance on the RAIN CEMENTS LIMITED is misplaced, as the said decision though arises from Section 144C of the IT Act, it was under a different context or different fact situation; in the said case, no direction under Sub-Section (5) of Section 144C of the IT Act was passed within the time prescribed therein. In the said circumstances, the said decision would have no application to the facts of the present case, as in the present case upon the direction issued by DRP, the order should have been passed within the time prescribed. under Section 144C(13) of the I.T. Act.”

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

The assessee company has also filed a stay application vide SA No.35/Bang/2005 seeking stay of outstanding demand of Rs.10,14,59,904/- for the AY 2020-21 under Rule 35A of the I.T. Rules, 1963. Since we have already allowed the appeal in favour of the assessee and therefore, the Stay petition filed by the assessee becomes infructuous and accordingly dismissed.

In the result, the appeal filed by the assessee is allowed and stay petition filed by the assessee is dismissed.