CALLIDUSCLOUD (INDIA) PRIVATE LIMITED,HYDERABAD vs. DCIT., CIRCLE- 1(1), HYDERABAD

Facts

The assessee, Callidus Cloud India Private Limited, engaged in software development and other services, filed its return for AY 2021-22. A Transfer Pricing Officer (TPO) reference led to proposed adjustments for various international transactions. The Dispute Resolution Panel (DRP) partially allowed objections, resulting in a final assessment order dated 23.10.2024, which the assessee challenged as time-barred.

Held

The Tribunal, following precedents from the Madras and Bombay High Courts, held that the final assessment order passed on 23.10.2024 for AY 2021-22 was beyond the statutory limitation period, which, even with extensions for TPO reference under Section 92CA, would have expired on 31.12.2023. Consequently, the assessment order was quashed as time-barred. However, the Tribunal noted that the core legal issue regarding limitation in DRP cases is pending before a Larger Bench of the Supreme Court, and thus, other merits-based issues in the appeal are kept open, allowing for revival if the Supreme Court's decision necessitates modification.

Key Issues

Whether the final assessment order passed under Sections 143(3) read with 144C(13) and 144B of the Income-tax Act, pursuant to DRP directions and TPO adjustments, was barred by limitation as per Section 153(1) and 153(4) for Assessment Year 2021-22.