EATON POWER QUALITY PRIVATE LIMITED,PUDUCHERRY vs. THE DEPUTY COMMISSIONER OF INCOME TAX, PUDUCHERRY

आयकर अपीलीय अिधकरण, ’डी’
यायपीठ, चे ई।
IN THE INCOME TAX APPELLATE TRIBUNAL
‘D’ BENCH: CHENNAI

ी एबी टी. वक
, ाियक सद एवं
एवं
एवं
एवं

ी अिमताभ शुा, लेखा सद के सम

BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER

आयकर अपील सं./ITA No.231/Chny/2025
िनधारण वष/Assessment Year: 2021-22

M/s. Eaton Power Quality Pvt. Ltd.,
No.2, EVR Street, Sedarpet,
Puducherry-605 111. [PAN: AAACC 6943 R]
v.
The DCIT,
Circle-1,
Puducherry.
(अपीलाथ/Appellant)
(यथ/Respondent)

अपीलाथ क ओर से/ Appellant by :
Mr.Vishal Kalra, Advocate
(Virtual)
यथ क ओर से /Respondent by :
Mr. ARV Sreenivasan, CIT
सुनवाईकतारीख/Date of Hearing
:
25.09.2025
घोषणाकतारीख /Date of Pronouncement
:
18.12.2025

आदेश / O R D E R
PER ABY T. VARKEY, JM:

This is an appeal preferred by the assessee against the final assessment order dated 28.11.2024 which was passed vide DIN No.
ITBA/AST/S/143(3)/2024-25/1070773150(1) for AY 2021-22. 2. The assessee has, inter-alia, raised the legal ground assailing the final assessment order framed u/s.143(3) r.w.s.144C(3) r.w.s.144B of the Income Tax Act, 1961 (hereinafter referred to as "the Act”) on the ground that the same was time-barred, since it had been passed beyond the M/s. Eaton Power Quality Pvt. Ltd.
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timelines prescribed under section 144C(13) of the Act. Ground Nos.2 &
3, which reads as under:
2. That on the facts and circumstances of the case and in law, the assessment order dated November 28, 2024 is bad in law and liable to be quashed as the same has been passed beyond the timelines prescribed under section 144C(13) of the Act.
3. That on the facts and circumstances of the case and in law, the assessment order dated November 28, 2024 passed by the AO is barred by limitation and liable to be quashed, as the same has been passed beyond the time limit prescribed under third proviso to section 153(1) of the Act.
3. For adjudicating the legal issue, it would be gainful to refer to the relevant date of events in this matter:
Sl.No.
Date
Event
1
ITR filed on 09.03.2022
28.06.2022
notice issued u/s.143 (2) of the Act
2
27.10.2023
TP order u/s.92CA(3) of the Act
3
20.12.2023
Draft assessment order u/s.144C(1) of the Act
4
19.01.2024
Objections raised before the DRP
5
21.09.2024
DRP directions
6
28.11.2024
Final assessment order

(1) …..
(2) …..
(3) …..
(4) …..
(5) …..
(6) …..
(7) …..
M/s. Eaton Power Quality Pvt. Ltd.
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(8) …..
(9) …..
(10) …..
(11) …..
(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 in section 153, 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.[emphasis given]

passed the impugned final assessment order on 28.11.2024 u/s.143(3) r.w.s.144C(1) r.w.s.92CA of the Act. The assessee has challenged the impugned action of the AO passing the final assessment order on 28
November, 2017, on the ground that it was time-barred. According to the Ld.AR, the AO was bound to pass the final assessment order on or before
31st October, 2024 as per the timeline prescribed u/s.144C(13) of the Act.
In order to adjudicate this legal issue, we note that following facts are not disputed i.e. the AO received the directions of the DRP on 21.09.2024 [as noted from Page No.31 of the DRP order that the DRP order dated
21.09.2024 was issued to the AO & TPO as well as to assessee on the same date refer Page No.86 of the Paper Book]; and the AO framed the final assessment order on 28.11.2024. The question is whether the AO has framed the final assessment order well within the time prescribed by the Act or not. In this regard, it would be gainful to refer to relevant statutory provisions which is necessary for adjudicating the dispute:
144C. (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 in the income or loss returned 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.
M/s. Eaton Power Quality Pvt. Ltd.
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(3) ……

(4) ……

(5) The Dispute Resolution Panel shall, in a case where any objection is received under subsection (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment.

(6) The Dispute Resolution Panel shall issue the directions referred to in sub- section (5), after considering the following, namely:—

(a) Draft order;
(b) Objections filed by the assessee;
(c) Evidence furnished by the assessee;
(d) Report, if any, of the Assessing Officer, Valuation Officer or Transfer
Pricing Officer or any other authority;
(e) Records relating to the draft order;
(f) Evidence collected by, or caused to be collected by, it; and (g) Result of any enquiry made by, or caused to be made by, it.

(7) The Dispute Resolution Panel may, before issuing any directions referred to in sub-section (5),—

(a) make such further enquiry, as it thinks fit; or (b) cause any further enquiry to be made by any income-tax authority and report the result of the same to it.

(8) The Dispute Resolution Panel may confirm, reduce or enhance the variations proposed in the draft order so, however, that it shall not set aside any proposed variation or issue any direction under sub-section (5) for further enquiry and passing of the assessment order.

Explanation.—For the removal of doubts, it is hereby declared that the power of the Dispute Resolution Panel to enhance the variation shall include and shall be deemed always to have included the power to consider any matter arising out of the assessment proceedings relating to the draft order, notwithstanding that such matter was raised or not by the eligible assessee.

(9) …….

(10) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer.

(11) No direction under sub-section (5) shall be issued unless an opportunity of being heard is given to the assessee and the Assessing Officer on such directions which are prejudicial to the interest of the assessee or the interest of the revenue, respectively.

(12) No direction under sub-section (5) shall be issued after nine months from the end of the month in which the draft order is forwarded to the eligible assessee.
M/s. Eaton Power Quality Pvt. Ltd.
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(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.

aside any proposed variation or issue any direction under sub-section (5) for further enquiry and passing of the assessment order. As per sub- section (10) of Section 144C of the Act, every direction issued by the DRP shall be binding on the AO. As per sub-section (13) of section 144C of the Act, upon receipt of the directions under sub-section (5) from DRP, the AO shall inconformity with the directions of the DRP, 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.
9. Here, in this case, the pertinent facts to resolve the legal issue raised by the assessee is that the AO has passed the draft assessment order on 20.12.2023 and objection was filed by the assessee before the DRP on 19.01.2024 and the DRP directions were issued on 21.09.2024
and the AO received the DRP directions on 21.09.2024. Therefore, as per section 144C(13) of the Act, the AO has to complete the assessment
(final 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. That means, in this case, the AO had received the directions of the DRP dated 21.09.2024, on the same date.
Therefore, within one month from the end of the month of receipt of the DRP directions means 31st October, 2024 is the last date to pass the final assessment order. However, in this case, it is an admitted fact that the M/s. Eaton Power Quality Pvt. Ltd.
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final assessment order was passed on 28th November, 2024, which means the final assessment order has been passed after the time barring date on 31st October, 2024. Therefore, such an order is bad in law and the AO has passed the order wholly without juri iction and therefore, is null in the eyes of law. For such a proposition, we rely on the decision of the Hon’ble Bombay High Court in the case of Vodafone Idea Ltd. v. Central
Processing Centre & Ors [2023] SCC Online Bombay 2464, wherein, the Hon’ble Bombay High Court held as under:
20. 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 October1, 2009. In the Notes on Clauses to the Finance Bill, 2009 (Budget 2009-10) ([2009] 314 ITR (St.) 57 ), the reason for insertion of section 144C is given as under (page 160 of 314 ITR (St.)):
"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 takes 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."
21. Thus, if the provisions of section 144C as mandated by the statute are not strictly adhered to the entire object of providing for an alternate redressal mechanism in the form of Dispute Resolution Panel 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 Dispute Resolution Panel are binding on the Assessing
Officer. By failing to pass any order in terms of the provision, the Assessing Officer 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 the assessee. Hence, the Faceless Assessing Officer cannot be believed that the Dispute Resolution Panel direction was received by him only on August 23, 2023 despite being uploaded on the Income-tax Business Application portal on March 25, 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.”
M/s. Eaton Power Quality Pvt. Ltd.
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Court in Roca and that of the Division Bench of the Delhi High Court in Louis Dreyfus, I conclude that the assessment order cannot be sustained.
9. In view of the conclusion that the assessment proceedings are barred by limitation, it is unnecessary to examine as to whether the assessing officer was duly authorised to exercise juri iction either under the Whatsapp message issued on 13.04.2022 or upon the physical file being signed on 21.04.2022. 10. For reasons set out above, W.P.No.12159 of 2023 is allowed by quashing the impugned assessment order dated 25.03.2023. There will be no order as to costs.
Consequently, connected miscellaneous petition is closed.
11. In the light of the above discussion and the judicial precedents and the binding decision of the Hon’ble Madras High Court in the case of M/s.Taeyang Metal India Pvt. Ltd., (supra) we hold that the final assessment order passed by the AO/DCIT, Corporate Circle-1(2),
Chennai, dated 28.11.2024 for AY 2021-22 in the case of the assessee was barred by limitation and therefore, passed wholly without juri iction and therefore, null in the eyes of law and therefore, we quash the impugned assessment order dated 28.11.2024. Since, the legal issue has been allowed, we are not inclined to adjudicate the other grounds on merits being academic.
12. In the result, appeal filed by the assessee is allowed.

Order pronounced on the 18th day of December, 2025, in Chennai. (अिमताभ शुा)
(AMITABH SHUKLA)
लेखा सदय/ACCOUNTANT MEMBER (एबी टी. वक
)
(ABY T. VARKEY)
याियक सदय/JUDICIAL MEMBER
चे ई/Chennai,
!दनांक/Dated: 18th December, 2025. M/s. Eaton Power Quality Pvt. Ltd.
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TLN

आदेश क ितिलिप अ$ेिषत/Copy to:
1. अपीलाथ /Appellant
2. थ /Respondent
3. आयकरआयु/CIT, Chennai / Madurai / Salem / Coimbatore.
4. िवभागीयितिनिध/DR
5. गाड फाईल/GF