WESTERN UP TOLLWAY LIMITED,NOIDA vs. ACIT, CIRCLE-8(1), HYDERABAD

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4. The Hon'ble DRP/ Learned TPO/AO has grossly erred in facts and circumstances of the case and in law by: a) Determining of the arm's length price of the impugned international transaction without applying any method and without performing any analysis in accordance with the provisions of Section 92C of the Act read with Rule 10B and 10C of the Rules. b) Rejecting the appellant's economic analysis stating that only SBI linked rate loans have been considered.

5. The Hon'ble DRP/ Learned TPOIAO has grossly erred in rejecting the economic adjustments claimed by the appellant over the SBI Base Rate on account of different credit rating, maturity period and nature of security between the SBI Base Rate and the NCDs issued by the appellant.

6. The Hon'ble DRP/ Learned TPOIAO has grossly erred in rejecting the economic adjustments claimed by the appellant over the internal CUP data on account of different credit rating and nature of security between the NCDs issued by the appellant and the NCDs obtained from third party financial institutions.

7. Without prejudice to the above, the Hon'ble DRP / Learned TPOIAO, based on facts and circumstances of the case, has grossly erred in not considering the effective rate of interest of the NCDs issued by the appellant. 8. The Hon'ble DRPI Learned TPO/AO has erred in disregarding the fact that the SBI PLR rate plus 300 basis points should be considered as arm's length rate of interest basis FEMA regulations. 9. The Learned AO has grossly erred in proposing initiation of penalty proceedings under section 270A r.w.s 274 of the Act. All of the above grounds of appeal are without prejudice and notwithstanding each other. The appellant craves leave to add, alter, omit or substitute any or all of the above grounds of appeal, at any time before or at the time of hearing”.

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On the facts and circumstances of the case and in law, the Ld. TPO/Ld.AO/Hon'ble DRP has Order passed by the A.O without giving effect to the directions of the DRP liable to be quashed. 10. erred in not adhering to the DRP Directions vide order dated 21 December 2021 under section 144C(5) of the Act, and hence the final assessment order under section 143(3) r.w.s. 144C(13) and 144B of the Act dated 12 January 2022 is bad in law and liable to be quashed. Assessment order is barred by limitation 11. Erred in not appreciating that the time limit under section 153 of the Act is the outer time limit for passing the final assessment order and hence the final assessment order under section 143(3) r.w.s. 144C(13) and 144B of the Act dated 12 January 2022 is time barred and liable to be quashed. The appellant craves leave to added to, alter, delete, or modify the above grounds of appeal

4. The Learned Authorized Representative (“Ld. AR”) submitted that the grounds raised in the additional ground are purely legal in nature and do not require investigation of any fresh facts. It was accordingly submitted that, in terms of Rule 11 of the Income Tax Appellate Rules, 1963 (“the ITAT Rules”) and in view of the ratio laid down by the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs. CIT (229 ITR 383), the additional ground merits admission.

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5. Per contra, the Learned Departmental Representative (“Ld. DR”) objected to the admission of the additional ground by placing reliance on para no. 5 of the judgment of the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs. CIT (supra). She submitted that as laid down by the Hon’ble Supreme Court in the said paragraph, an additional ground can be admitted only where a non-taxable item has been taxed or a permissible deduction has been denied. According to the Ld. DR, the present case does not fall in either of these situations and therefore the additional ground raised by the assessee cannot be admitted. She further submitted that the additional ground is not covered by Rule 11 of the ITAT Rules. Accordingly, she argued that the additional grounds raised by the assessee are liable to be rejected.

“5. Under section 254 of the Income-tax Act, 1961, the Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is, thus, expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason Page 5 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see any reason to restrict the power of the Tribunal under section 254 only to decide the grounds which arise from the order of the Commissioner (Appeals). Both the assessee as well as the Department have a right to file an appeal/cross- objections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier.

6. In the case of Jute Corporation of India Ltd. v. CIT [1991] 187 ITR 688, this Court, while dealing with the powers of the AAC, observed that an appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the AAC in entertaining an additional ground raised

by the assessee in seeking modification of the order of assessment passed by the ITO. This Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The AAC must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The AAC should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also.

7. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner (Appeals) takes too narrow a view of the powers of the Tribunal - vide, e.g., CIT v. Anand Prasad [1981] 128 ITR 388/ 5 Taxman 308 (Delhi), CIT v. Karamchand Premchand (P.) Ltd. [1969] 74 ITR 254 (Guj.) and CIT v. Cellulose Products of India Ltd. [1985] 151 ITR 499/[1984] 19 Taxman 278 (Guj.) (FB). Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee.

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8. The reframed question, therefore, is answered in the affirmative, i.e., the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee. We remand the proceedings to the Tribunal for consideration of the new grounds raised

by the assessee on the merits.” 6.1 On a perusal para no. 5 of the above, we find that the objection of the Ld. DR is misplaced. In the same paragraph, particularly in the last two lines, the Hon’ble Supreme Court has clearly stated that the Tribunal should not be prevented from considering a question of law arising in assessment proceedings, although not raised earlier. Thus, the principle emerging from para no. 5 is not restrictive but enabling in nature, enlarging the jurisdiction of the Tribunal to examine any legal issue arising from the material on record. It is only in this broader context that the Hon’ble Supreme Court illustrated situations where an additional ground may be raised. The Ld. DR has misconstrued this illustration as a limitation. Further, at para no. 8 of the judgment, the Hon’ble Supreme Court has once again reiterated that the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee. In our considered view, the intention of the Hon’ble Supreme Court was never to restrict the scope of additional grounds only to cases where a non- taxable item is taxed or a permissible deduction is denied. On the contrary, para no. 5 expressly elaborates that the Tribunal’s powers under section 254 of the Income Tax Act, 1961 (“the Act”) are expressed in the widest possible terms, enabling it to examine any legal issue arising from facts already on record. Applying this Page 7 of 38. ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd settled legal position, we hold that any question of law arising from facts available on record and having a bearing on the tax liability of the assessee is admissible as an additional ground. The additional ground raised by the assessee in the present case satisfies these conditions in entirety. Further, as regards the objection of the Ld. DR concerning Rule 11 of the ITAT Rules, it is crucial to pursue Rule 11 of the ITAT Rules, which is to the following effect:

“11. The appellant shall not, except by leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal, but the Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal under this rule: Provided that the Tribunal shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of being heard on that ground” 6.2 On a perusal of the above, it is seen that the rule 11 of the ITAT Rule merely provides that an appellant may raise an additional ground with the leave of the Tribunal and that before granting such leave, the other party should be afforded sufficient opportunity of being heard. In the present case, such opportunity has indeed been provided to the revenue. Hence, we find no merit in the objection raised by the Ld. DR. Therefore, the objection of the revenue is rejected. Accordingly, the additional grounds raised by the assessee are admitted for adjudication.

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of the assessee, we find that under the additional ground of the appeal, the assessee has raised a purely legal ground challenging the validity of the assessment order passed by the Ld. AO for AY 2017-18 under section 143(3) r.w.s. 144C(13) and 144B of the Act in accordance with the directions of the Learned Dispute Resolution Panel (“Ld. DRP”) under section 144C(5) of the Act (hereinafter referred to as “the final assessment order”), on the ground that it is barred by the limitation prescribed under section 153 of the Act. In this regard, the Ld. AR submitted that the final assessment order passed by the Ld. AO on 12.01.2022 is beyond the period of limitation and therefore invalid and liable to be quashed on this ground alone. He pointed out that the time limit for passing the assessment order for AY 2017-18, in the normal course, as per section 153(1) of the Act was up to 31.12.2019. He further submitted that since the case of the assessee was referred to the Learned Transfer Pricing Officer (“Ld. TPO”) under section 92CA(1) of the Act, by virtue of section 153(4) of the Act, the limitation for completing the final assessment stood extended by 12 months, making the outer limit at 31.12.2020. Accordingly, he argued that since the final assessment order was passed on 12.01.2022, which is much after 31.12.2020, it is barred by limitation. In this regard, the Ld. AR relied on the decision of the Hon’ble Madras High Court in the case of CIT vs. Roca Bathroom Products Pvt. Ltd. (445 ITR 537) and the decision of the Hon’ble Bombay High Court in the case of Shelf Drilling Ron Tappmeyer Ltd. vs. ACIT (International Taxation) (457 ITR 161) to contend that the limitation under Page 9 of 38. ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd section 153 of the Act prevails over section 144C of the Act. He further submitted that the overall limitation for passing the final assessment order cannot exceed the limit prescribed under section 153(1) read with section 153(4) of the Act. He further argued that the limitation under section 144C(13) of the Act is only a restriction on the Ld. AO to pass the final assessment order within one month of receipt of directions of the Ld. DRP but does not enlarge the statutory limitation prescribed under section 153 of the Act. The Ld. AR emphasized that both the Hon’ble Madras High Court and the Hon’ble Bombay High Court have held that section 144C and section 153 of the Act are not mutually exclusive, and that the overriding effect of section 153 of the Act prevails in determining limitation. The Ld. AR further submitted that this Tribunal in the case of Aveva Solutions India LLP, Hyderabad vs. ITO, Ward-8(1), Hyderabad in ITA.No.1170/ Hyd/2024 vide Order dated 19.11.2025 after considering the decision of the Hon’ble Madras High Court in the case of CIT vs. Roca Bathroom Products Pvt. Ltd. (Supra) and the decision of the Hon’ble Bombay High Court in the case of Shelf Drilling Ron Tappmeyer Ltd. vs. ACIT (International Taxation) (Supra) decided the identical issue in favour of the assessee. Accordingly, the Ld. AR prayed before the Bench that the final assessment order is barred by limitation and liable to be quashed.

8. Per contra, the Ld. DR, inviting our attention to para no. 5(I) of M.A No.21/2022 in M.A. No.665/2021 in suo motu writ petition (C) No.3/2020 of the order of the Hon’ble Supreme Court , Page 10 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd submitted that the Hon’ble Supreme Court has granted a general extension of the period from 15.03.2020 to 28.02.2022 for the purpose of calculation of limitation periods prescribed under any general or special law in respect of all judicial or quasi-judicial proceedings. The Ld. DR contended that the limitation period available to the Ld. AO for completion of the assessment stood extended for the period covered between 15.03.2020 to 28.02.2022 by virtue of the directions of the Hon’ble Supreme Court. Accordingly, she submitted that, if the said extended period is taken into account for computing the limitation for passing the assessment order by the Ld. AO, the order passed would fall within the period of limitation.

8.1 The Ld. DR also submitted that the section 144C of the Act begins with a non-obstante clause and therefore is a complete code in itself for assessment of “eligible assessees” as defined under section 144C(15)(b) of the Act. She submitted that due to the non-obstante clause in section 144C(13) of the Act, the limitation under section 153 of the Act stands excluded. The Ld. DR argued that section 153 of the Act predates section 144C of the Act, which was introduced in 2009, and therefore the legislature intended that section 144C of the Act should override section 153 of the Act. She further submitted that the Act provides two different mechanisms of assessment (a) for eligible assessees under section 144C(15)(b) of the Act and (b) for normal assessees governed by section 153 of the Act. Under the special regime of section 144C of the Act, the assessee may accept the draft Page 11 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd assessment order and file appeal before the Ld. CIT(A) or object before the Ld. DRP. Once the assessee chooses to file objections before the Ld. DRP, the limitation applicable is that prescribed under section 144C(13) of the Act. The Ld. DR submitted that once the final assessment order is passed within 30 days from the receipt of directions of Ld. DRP, it is well within limitation. Accordingly, she submitted that the date of direction of the Ld. DRP is 21.12.2021 and the Ld. AO has passed the final assessment order on 12.01.2022, which is within the limitation period as prescribed under section 144C(13) of the Act. Hence, the Ld. AO has passed the final assessment order well within the limitation. In alternate submission, the Ld. DR also submitted that the issue is pending adjudication before the Hon’ble Supreme Court, and therefore the issue may be kept open until decided by the Supreme Court.

11. Accordingly, we do not find any merits in the arguments of the learned DR that the limitation for passing the assessment order was extended by the Hon'ble Supreme Court. “

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19. Admittedly, the facts including the dates are not under dispute. As regards the appeal in W.A.No.1854 of 2021, even though the remand was on 24-1-2013 and the assessee had received the order on 8-2-2013, the first notice by the DRP was issued on 19-2-2014 and the first hearing in the Chennai office was on 10-3-2014. Therefore, it is lucid that the DRP had the knowledge of the order before 19-2-2014. The matter was heard on various dates in Chennai office and written submissions were also filed. Thereafter, the files have been transferred to Bengaluru by the CBDT notification dated 31.12.2014. The Learned Judge relying upon the findings in the batch of cases which was decided first and rendered Page 19 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd additional findings, which have been extracted in paragraphs 10 and 11 above, has allowed the writ petitions holding that the time limit under Section 153 (2A) was not adhered to and in any case, the proceedings have not been concluded within a reasonable time.

21. As held above, the assessment has to be concluded within 21 months when there is no reference and when there is a reference, it has to be concluded within 33 months. In the additional 12 months, the draft order is to be passed, the objections have to be filed, the DRP has to issue the directions, and the final order is to be passed. The provisions under section 144C and section 153 are not mutually exclusive as both contain provisions relating to Section 92CA and are inter- dependant and overlapping. On remand, prior to amendment as per Section 153 (2A), the Assessing officer is given 12 months to pass a fresh assessment order. Therefore, it is incumbent on him to do so, irrespective of the fact that DRP Page 20 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd has completed the hearing and issued the directions or not. As rightly held by the learned judge, we are of the view that the DRP ought to have concluded the proceedings within 9 months from the date of receipt of the Tribunal's order, when it had issued a notice on 19-2-2014 and conducted the hearing as early as on 10-3-2014 and on several dates. The DRP at Chennai, in fact ought to have passed orders before 19-11- 2014, even if the date of receipt of the notice is taken as 19-2- 2014. In that event, the assessing officer ought to have passed the order before 31-12-2014 or at the latest before 31-3-2015 considering that the order was received during the financial year 2013-14. The transfer of the files to Bengaluru, after the lapse of the time, will not indefinitely extend the time and can have no impact on the timelines. It is an inter-department arrangement, and it cannot defeat the rights of the assessee.

12. In Canada Sugar Refining Co. v. R. [1898 AC 735 : 67 LJPC 126], Lord Davy observed: "Every clause of a statute should be construed with reference to the context and other clauses of the Act, so as, as far as possible, to make a consistent enactment of the whole statute or series of statutes relating to the subject-matter." ……….

14. This rule of construction which is also spoken of as "ex visceribus actus" helps in avoiding any inconsistency either within a section or between two different sections or provisions of the same statute.

15. On a conspectus of the case-law indicated above, the following principles are clearly discernible:

Page 21 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd (1) It is the duty of the courts to avoid a head-on clash between two sections of the Act and to construe the provisions which appear to be in conflict with each other in such a manner as to harmonize them. (2) The provisions of one section of a statute cannot be used to defeat the other provisions unless the court, in spite of its efforts, finds it impossible to effect reconciliation between them. (3) It has to be borne in mind by all the courts all the time that when there are two conflicting provisions in an Act, which cannot be reconciled with each other, they should be so interpreted that, if possible, effect should be given to both. This is the essence of the rule of "harmonious construction". (4) The courts have also to keep in mind that an interpretation which reduces one of the provisions as a "dead letter" or "useless lumber" is not harmonious construction. (5) To harmonize is not to destroy any statutory provision or to render it otiose."

(ii) CIT v. Hindustan Bulk Carriers [2003] 126 Taxman 321/259 ITR 449: "16. The courts will have to reject that construction which will defeat the plain intention of the legislature even though there may be some in exactitude in the language used. (See Salmon v. Duncombe [(1886) 11 AC 627 : 55 LJPC 69 : 55 LT 446 (PC)] AC at p. 634, Curtis v. Stovin [(1889) 22 QBD 513 : 58 LJQB 174 : 60 LT 772 (CA)] referred to in S. Teja Singh case [AIR 1959 SC 352 : (1959) 35 ITR 408]).

18. The statute must be read as a whole and one provision of the Act should be construed with reference to other provisions in the same Act so as to make a consistent enactment of the whole statute.

23. Further, similar non-obstante clause is also used in section 144C(4) with a same limited purpose to imply, even though there might be a larger time limit under Section 153, once the order of TPO is accepted or not objected to, causing a deeming fiction of acceptance, the final order is to be passed immediately. The object is to conclude the proceedings as expeditiously as possible, and the authority need not wait for the last date to pass the orders. The limitation prescribed under the statute is for the assessing officer and therefore, it is his duty to pass order in time irrespective of whether the directions are received from DRP or not. As held by us above, the DRP will have no authority to issue directions after nine Page 23 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd months and a further period of one month as per section 144C (13) and three months under section 153 (2A) is available, within which period no orders have been passed in the present cases. The reference made by the learned senior counsels on the judgments in Nokia India (P.) Ltd. (supra) and Vedanta Ltd. (Supra) is well founded. The timeline given under the Act is to be strictly followed.

The challenge must be available ex-facie leaving no room for the court to peruse or discuss intricate facts. In the present case, the challenge is on the ground of limitation and hence, we hold that the proceedings under Article 226 of the constitution are maintainable.

25. As regards the relief sought in other appeals viz., W.A.No.1517/2021 etc. batch, the findings rendered above are equally applicable. In these cases, for the assessment year 2009-10, the order of remand to the Assessing officer was passed on 18-12-2015 and insofar as the assessment year 2010-11 is concerned, for one issue, it was passed on 18-12- 2015 and for other two issues, it was passed on 23-9-2016 after the amendment, by which time, the time limit was brought down to 9 months. As such, fresh orders ought to have been passed before 31-3-2017 for the assessment year 2009- 10 and for one issue relating to the assessment year 2010-11 reckoning the 12 months from the financial year 2015-16 and on or before 31-12-2017 reckoning 9 months from the financial year 2016-17. Therefore, the Assessing officer ought to have passed a draft assessment order immediately and asked the assessee to file their objections with the DRP. For the mistake Page 24 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd and the lapse of the Assessing officer, the vested right of the Assessee cannot be taken away.

26. We are not oblivious of the fact that any finding on the aspect of reasonableness in time in passing orders when no time is provided would be superfluous in view of our decision in earlier paragraphs. It is necessary to decide on the issue as in this case, the revenue has taken more than 5 years in one appeal and 4 years in other appeals, which is unacceptable as rightly held by the learned judge. We are not alone on this issue and are fortified by the following judgments of the Hon'ble Supreme Court in this regard.

(i) Bharat Steel Tubes Ltd. v. State of Haryana 1988 taxmann.com 761 “15. Before we part with the case, we would like to indicate that assessment of tax should be completed with expedition. It involves the revenue to the State. In the case of a registered dealer who collects sales tax on behalf of the State, there is no justification for him to withhold the payment of the tax so collected. If a timely assessment is completed, the dues of the State can be conveniently ascertained and collected. Delay in completion of assessment often creates problems. The assessee would be required to keep up all the evidence in support of his transactions. Where evidence is necessary, with the lapse of time, there is scope for its being lost. Oral evidence as and when required to be produced by the assessing authority may not be available if a long period intervenes between the transactions and the consideration of the matter by the assessing authority. Long delay thus is not in the interest of either the assessee or the State. In view of the fact that a period of limitation has been prescribed for bringing the escaped turnover into the net of taxation, such an eventuality cannot be grappled with appropriately unless timely assessment is completed. In several taxing statutes, even in a situation like this, where assessment under Section 11(3) or 28(3) of the respective Acts is contemplated, a period of limitation is provided. Until by statute, such a limitation is provided, it is proper for the State Governments to require, by statutory rules or appropriate instructions, to ensure completion of assessments with expedition and reasonable haste but subject to rules of natural justice.”

Page 25 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd (ii) Govt. of India v. Citedal Fine Pharmaceuticals [1989] 3 SCC 483 : "6. Learned counsel appearing for the respondents urged that Rule 12 is unreasonable and violative of Article 14 of the Constitution, as it does not provide for any period of limitation for the recovery of duty. He urged that in the absence of any prescribed period for recovery of the duty as contemplated by Rule 12, the officer may act arbitrarily in recovering the amount after lapse of long period of time. We find no substance in the submission. While it is true that Rule 12 does not prescribe any period within which recovery of any duty as contemplated by the rule is to be made, but that by itself does not render the rule unreasonable or violative of Article 14 of the Constitution. In the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period. What would be reasonable period, would depend upon the facts of each case. Whenever a question regarding the inordinate delay in issuance of notice of demand is raised, it would be open to the assessee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice of demand for recovery was made within reasonable period. No hard and fast rules can be laid down in this regard as the determination of the question will depend upon the facts of each case." (iii) State of Punjab v. Bhatinda District Co-op. Milk P. Union Ltd. [2007] 11 SCC 363 : '17. A bare reading of Section 21 of the Act would reveal that although no period of limitation has been prescribed therefor, the same would not mean that the suo motu power can be exercised at any time.

18. It is trite that if no period of limitation has been prescribed, statutory authority must exercise its jurisdiction within a reasonable period. What, however, shall be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors.

19. Revisional jurisdiction, in our opinion, should ordinarily be exercised within a period of three years having regard to the purport in terms of the said Act.

Page 26 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd In any event, the same should not exceed the period of five years. The view of the High Court, thus, cannot be said to be unreasonable. Reasonable period, keeping in view the discussions made hereinbefore, must be found out from the statutory scheme. As indicated hereinbefore, maximum period of limitation provided for in sub-section (6) of Section 11 of the Act is five years.

27. For the reasons set out herein before, we conclude as under:

(a) The provisions of Sections 144C and 153 are not mutually exclusive but are rather mutually inclusive. The period of limitation prescribed under Section 153 (2A) or 153 (3) is applicable, when the matters are remanded back irrespective of whether it is to the Assessing Officer or TPO or the DRP, the duty is on the assessing officer to pass orders. (b) Even in case of remand, the TPO or the DRP have to follow the time limits as provided under the Act. The entire proceedings including the hearing and directions have to be issued by the DRP within 9 months as contemplated under section 144C(12) of the Income-tax Act, (c) Irrespective of whether the DRP concludes the proceedings and issues directions or not, within 9 months, the Assessing officer is to pass orders within the stipulated time, In matter involving transfer pricing, upon remand to (d) DRP, the Assessing Officer is to pass a denova draft order and the entire proceedings as in the original assessment, would have to be completed within 12 months, as the very purpose of extension is to ensure that orders are passed within the extended period, as otherwise the extension becomes meaningless. The outer time limit of 33 months in case of reference to (e) TPO under Section 153, would not refer to draft order, but only to final order and hence, the entire proceedings would have to be concluded within the time limits prescribed, Page 28 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd (f) The non-obstante clause would not exclude the operation of Section 153 as a whole. It only implies that irrespective of availability of larger time to conclude the proceedings, final orders are to be passed within one month in line with the scheme of the Act, When no period of limitation is prescribed, orders are to (g) be passed within a reasonable time, which in any case cannot be beyond 3 years. However, when the statute prescribes a particular period within which orders are to be passed, then such period, irrespective of whether it is short or long, shall be applicable.

28. With the above directions, all the writ appeals are dismissed. However, there will be no order as to costs. Consequently, connected miscellaneous petitions are closed.” 9. Thus, the Hon’ble Madras High Court has held that provisions of sec.144C and 153 are not mutually exclusive but are rather mutually inclusive. The period of limitation u/sec.153 is applicable for completing the assessment and sec.144C(13) is only in the nature of restricting the time period, within which, the Assessing Officer is required to pass the Final Assessment Order after the Directions of the DRP and not enlarging the limitation provided u/sec.153 of the Act. 10. Similar view has been taken by the Hon’ble Bombay High Court in the case of Shelf Drilling Ron Tappmeyer Ltd., vs., ACIT, International Taxation (supra) in Paras-23 to 34 as under : “23. No doubt, section 144C of the Act is a self-contained code of assessment and time limits are inbuilt at each stage of the procedure contemplated. Section 144C envisions a special assessment, one which includes the determination of Arm’s Length Price (ALP) of international transactions engaged in by the assessee. The DRP was constituted bearing in mind the necessity for an expert body to look into intricate matters concerning valuation and transfer pricing and it is for this reason that specific timelines have been drawn within the framework of section 144C to ensure prompt and expeditious finalisation of this special assessment. The purpose is to fast-track a special type of assessment. That cannot be considered to mean that overall time limits prescribed have been given a go by in the process. 24. We find it difficult to accept the submissions of Mr. Suresh Kumar because it would in fact mean that, notwithstanding the Page 29 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd twelve month period prescribed under section 153 (3) of the Act, where it says that an order of fresh assessment in pursuance of an order under section 254 of the Act may be made at any time before the expiry of twelve months from the end of the financial year in which order under section 254 of the Act is received by the Commissioner, would not apply to a case where section 144C of the Act is applicable. It would also mean that the time prescribed in section 153 (1) of the Act cannot apply where section 144C of the Act is applicable in the case of an eligible assessee. If Mr. Suresh Kumar was correct, then in our view, it would have been specifically so provided in section 153 of the Act. We would agree with Mr. Mistri that wherever the legislature intended extra time to be provided, it is expressly provided in section 153 of the Act. Sub- section (3) of section 153 of the Act also applies to fresh order under section 92 CA of the Act being passed in pursuance to an order under section 254 of the Act. Sub-section (4) of section 153 of the Act specifically provides that notwithstanding anything contained in sub-sections (1), (1-A), (2), (3) and (3-A) of the Act, where a reference under sub-section (1) of section 92 CA of the Act is made during the course of the proceeding for assessment or re- assessment, the period available for completion of assessment or re-assessment, as the case may be, under the said sub-sections (1), (1-A), (2), (3) and (3-A) of the Act shall be extended by twelve months.

11. Therefore, following the Judgments of Hon’ble Madras High Court as well as Hon’ble Bombay High Court cited (supra), we hold that the assessment order passed by the Assessing Officer on 18.10.2024 is barred by limitation and consequently, the same is liable to be quashed. We order accordingly.

12. Since the issue is pending adjudication before the Hon’ble Supreme Court in the case of ACIT-[International Taxation] vs., Shelf Drilling Ron Tappmeyer Ltd., [2025] 177 taxmann.com 262 (SC) and the first attempt to resolve the dispute by the Hon’ble Supreme Court is not successful due to divergent views of the Division Bench of the Hon’ble Supreme Court and, therefore, the matter is required to be resolved by the Larger Bench of the Hon’ble Supreme Court. Since the matter is yet to be resolved by the Hon’ble Supreme Court, therefore, we allow the parties to get this appeal revived if the decision of the Hon’ble Supreme Court on this issue necessitates modification of this order.

13. The Hon’ble jurisdictional High Court in the case of Kotha Kantaiah vs., Income Tax Officer in WP.No.344 of 2025 vide order dated 24.04.2025 while dealing with the Page 32 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd issue of validity of the notice issued u/sec.148 issued by the Jurisdictional Assessing Officer [in short “JAO”] instead of Faceless Assessing Officer [in short “FAO”] as per the Faceless Assessment Scheme has quashed the notice issued u/sec.148 by the JAO and consequently, re- assessment order, but, granted the liberty to the parties to get the petition revived as per the outcome of the Judgment of the Hon’ble Supreme Court on the identical issue. The relevant part of the Judgment of Hon’ble Jurisdictional High Court of Telangana in the case of Kotha Kantaiah vs., Income Tax Officer (supra) in Paras-15 to 18 of the said judgement is as under : “15. What is worrying this Bench more is the fact that an endeavour is being made whole heartedly to ensure not to generate further litigation on issues which have been laid to rest by a large number of High Courts all of whom have taken a consistent stand that the action of the Income Tax Department being violative of the Finance Act, 2020 and Finance Act, 21021. Now in order to protect the interest of the Revenue as also that of the assessee, it would be trite at this juncture, if we dispose of the writ petition with an observation/direction that the disposal of the instant writ petition in terms of the judgment rendered by this High Court in the case of Kanakala Ravindra Reddy (1 supra) shall however be subject to the outcome of the SLPs which were filed by the Income Tax Department and which is pending consideration before the Hon'ble Supreme Court.

16. In the given facts and circumstances, this bench is of the considered opinion that unless and until we do not timely dispose of matters which are squarely covered by the decision of this Court and which stands fortified by the decisions of the various other High Courts on the very same issue, the pendency of this High Court would further be burdened which otherwise can be decided and disposed of as a covered matter.

17. So far as the interest of the Revenue is concerned, we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been observed in paragraphs 36, 37 and 38 of the order which for ready reference is reproduced hereunder: 36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent Department is neither tenable, nor sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/quashed As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent- Department pursuant to the notices also issued under Section 147 and 148 would get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principles.

Page 33 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically.

ITA TP Nos.170 & 493/Hyd/2022:

by the assessee in ITA TP No.67/Hyd/2022 for adjudication, therefore, the additional grounds raised by the assessees in both these appeals are also admitted for adjudication.

14. We observe that in both these appeals, under the additional ground the assessee has raised a purely legal ground challenging the validity of the assessment order passed by the Ld. AO under section 143(3) r.w.s. 144C(13) and 144B of the Act in Page 35 of 38 ITA TP Nos 67 and 493 of 2022 Western UP Tollway Ltd and ITA TP 170 of 2022 Mahua Bharatpur Expressways Ltd accordance with the directions of the Learned Dispute Resolution Panel (“Ld. DRP”) under section 144C(5) of the Act, on the ground that it is barred by the limitation prescribed under section 153(1) r.w.s. 153(4) of the Act. In this regard, the Ld. AR submitted that the final assessment order passed by the Ld. AO is beyond the period of limitation and therefore invalid and liable to be quashed on this ground alone. We have decided the identical issue in ITA No.67/Hyd/2022. Therefore, our observations and findings in shall mutatis mutandis apply to these two appeals also. In we have held that the limitation period for passing the final assessment order by the Ld. AO is to be calculated in accordance with the provisions of section 153(1) read with section 153(4) of the Act.