ADP PRIVATE LIMITED,HYDERABAD, TELANGANA vs. DCIT., CIRCLE 1(1), HYDERABAD, TELANGANA

(a) Not appreciating the fact that when TDS provisions are not applicable, the Appellant is not required to obtain a non-deduction certificate under section 195(2) of the Act. (b) Not appreciating the submissions made by the Appellant that the payments made to recipient/s are not chargeable to tax in India and accordingly, taxes were not liable to be deducted on the same and have erred in concluding that the Appellant is required to deduct TDS on payment for business support service expenses. (c) Not appreciating that the payments made towards business support services cannot constitute Fee for Technical services in the absence of satisfying make available clause of the India-Australia Double Taxation Avoidance Agreement ('DTAA'). (d) Not appreciating that the receipts received for providing business support services would constitute business income and in the absence of permanent establishment of the recipient in India, it cannot be taxed in India in terms of Article 5 read with Article 7 of India-Australia DTAA. (e) Erred in concluding that the business support services are rendered in India without any basis and purely on presumptions, surmises and conjectures. (f) Notwithstanding the above, the Ld. Authorities have erred in not adjudicating the matter on merits, without appreciating that business support services were not liable to tax in India and also have concluded that this ground is not maintainable, without any valid basis for such conclusion. Ground 3: Erroneous addition of INR 4,97,00,962 on account of difference in income as per Form 26AS vis-à-vis books of accounts. 3.1 The order passed by the Ld. AO and upheld by the Ld. DRP is erroneous and bad in law to the extent it made addition on account of difference in income as per Form 26AS vis-à-vis books of accounts, where such income was already offered to tax and therefore leading to double taxation. 3.2 The Ld. AO and Ld. DRP have erred in concluding that the Company has claimed TDS credits without offering the corresponding income to tax by not taking cognizance of the submissions made by the Appellant explaining that such income would have been offered to tax either in the current year or in earlier years or in the subsequent years, depending upon the revenue recognized in the books of accounts on an accrual basis.

4 ADP Private Limited 3.3 The Ld. AO and Ld. DRP have erred by including income for parties (based on Form 26AS) where higher income was reported vis-à-vis the books of accounts. However, the Learned AO and Ld. DRP have failed to acknowledge that for the parties where the income recorded in the books of accounts is higher than the income as per Form 26AS, the Company has duly declared such higher income appearing in the books of accounts and offered it to tax in the subject AY. Accordingly, there is an inconsistency in treatment wherein the Learned AO has selectively considered only those parties which have a higher income in Form 26AS vis-à-vis book of accounts, without making any adjustment for parties which have a higher income in books of accounts vis-à-vis Form 26AS. 3.4 Additionally, on the facts and circumstances of the case, and contrary to the law, the Ld. AO erred, and the Hon'ble DRP have erred to appreciate that on account of amendments made to section 155(20) of the Act and the rules notified thereunder, it was impossible for the Company to comply with the provisions of section 155(20) of the Act and therefore it amounts to impossibility of performance. 3.5 The Assessment Order passed by the Ld. AO is erroneous and bad in law as much as the Ld. AO has passed the order without considering the submissions and prevailing judicial precedents made during the course of hearing. Grounds relating to Transfer Pricing ('TP') matters On the facts and in the circumstances of the case and in contrary to law, the Ld. AO / Ld. TPO erred in, and the Hon'ble DRP further erred in: 4. Ground 4: Invalid reference made by the Ld. AO The Ld. AO made a reference to the Ld. TPO without meeting the preconditions for making reference to the transfer pricing officer under section 92CA(1) of the Act and has not provided an opportunity of being heard before referring the transfer pricing issues to the Ld. TPO.

6. Ground 6: Use of additional/modified filters 5 ADP Private Limited The Ld. TPO / Ld. AO / Hon'ble DRP erred in rejecting certain comparable companies by applying arbitrary filters without any rationale: a) Different financial year-end filter: The Ld. TPO / Ld. AO / Hon'ble DRP have erred in law and in facts by applying the said filter and rejecting companies having different financial year (i.e., companies who follow a financial year that is different from April to March). b) One sided turnover filter: The Ld. AO / Ld. TPO / Hon'ble DRP have erred in law and in facts by applying only the lower turnover filter of less than INR 1 crore as a comparability criterion and not applying a higher threshold limit for turnover filter. c) Persistent loss filter: The Ld. AO / Ld. TPO / Hon'ble DRP have erred in law and in facts by applying persistent loss filter rejecting companies which are incurring losses in any two of the last three previous years from FY 2020-21 to FY 2018-19 (Persistent operating losses). Provision of Information Technology Services ('IT') Ground 7: Not undertaking objective comparative analysis and inter-alia selecting non-comparable companies The Hon'ble DRP erred in upholding/confirming the action of Ld. TPO in accepting the following inappropriate companies as comparable: a) Robosoft Technologies Limited b) Aptus Software Labs Private Limited c) LTI Mindtree Limited (Formerly L&T Infotech) d) Tata Elxsi Limited e) Cybage Software Private Limited f) CG-Vak Software & Exports Limited g) Ksolves India Limited h) Nihilent Limited i) Infosys Limited j) Wipro Limited k) Consilient Technologies Private Limited I) Ezee Technosys Private Limited m) Net4Nuts Limited n) Systango Technologies Limited o) IDS Infotech Limited Ground 8: Not undertaking objective comparative analysis and inter-alia rejecting comparable company 6 ADP Private Limited The Ld. TPO and the Hon'ble DRP erred in not undertaking objective comparative analysis and interalia rejecting Orangescape Technologies Private Limited as comparable company.

9. Ground 9: Not considering certain companies which are functionally comparable to the Assessee The Hon'ble DRP erred in upholding/confirming the actions of the Ld. TPO in rejecting the additional companies selected by the Appellant even though they are functionally comparable and passes the filters applied by the Ld. TPO a) Kcube Consultancy Services Private Limited b) Indianic Infotech Limited c) Macrosoft IT Solutions India Private Limited d) Orchasp Limited e) Toxsl Technologies Private Limited f) Hurix Systems Private Limited g) Rheal Software Private Limited h) Batchmaster Software Private Limited i) Data Collection Infotech India Private Limited Provision of Information Technology enabled Services ('ITes')

10. Ground 10: Not undertaking objective comparative analysis and inter-alia selecting non- comparable companies The Hon'ble DRP erred in upholding/confirming the action of Ld. TPO in accepting the following inappropriate companies as comparables: a) Infosys BP M Ltd. b) Suprawin Technologies Ltd. c) Integra Software Services Pvt. Ltd d) Sutherland Global Services Pvt. Ltd e) Inteq BPO Services Private Limited f) Interactive Manpower Solution Pvt. Ltd. g) MPS Ltd. h) TTEC India Customer Solutions Pvt Ltd i) Canam Consultants Ltd. Ground 11: Not undertaking objective comparative analysis and inter-alia rejecting comparable companies The Ld. TPO erred and the Hon'ble DRP further erred in upholding/confirming the action of Ld. TPO in rejecting the following companies even though they are comparable and pass all the filters applied by the Ld. TPO: a) Global Healthcare Billing Partners Pvt. Ltd 7 ADP Private Limited b) Thomson Reuters International Services Pvt Ltd c) NGA HR (India) Private Limited Ground 12: Not considering certain companies (part of Ld. TPO's search set) which are functionally comparable to the Assessee The Hon'ble DRP erred in upholding/confirming the actions of the Ld. TPO in rejecting the additional companies selected by the Appellant even though they are functionally comparable and pass the filters applied by the Ld. TPO: a) R Systems International Limited b) MAA Business Solutions Private Limited c) I Services India Private Limited d) Cheers Interactive India Pvt Ltd 13. Ground 13: Super Normal Profits The Ld. TPO and the Hon'ble DRP erred in not excluding comparable companies that are earning supernormal profits in comparison to the Assessee.

14. Ground 14: Working capital adjustments The Ld. TPO and the Hon'ble DRP erred in not adjusting the net margins of comparable companies for differences in working capital in accordance with the provisions of Rule 10B(1)(e) of the Rules.

15. Ground 15: Adjustments for risk differences The Ld. TPO and the Hon'ble DRP erred in not adjusting the net margins of comparable companies for differences in financial and risk position.

16. Ground 16: Incorrect margin computation of comparable companies The Ld. TPO and the Hon'ble DRP erred in adopting an inconsistent approach while computing operating margin of certain comparable companies used in the determination of the ALP, resulting in incorrect margins of the comparable companies and other computational errors to arrive at adjustment amount.

17. Ground 17: Interest on outstanding receivables The Ld. TPO and the Hon'ble DRP erred in: a) Not appreciating that outstanding receivables is not covered in the definition of international transaction as defined u/s 92B of the Act and further erred in making transfer pricing adjustment in the nature of notional interest on receivables amounting to Rs. 5,08,183. 8 ADP Private Limited b) Not appreciating that the receivables are consequential/closely linked to the principal transaction of provision of services and hence have been aggregated for determination of Arm's Length Price ('ALP') under Transactional Net Margin Method ('TNMM'). c) Not appreciating the fact that the Assessee is fully funded by its Associated Enterprise with no working capital risk and no interest payments. d) Not appreciating the fact that the working capital adjustments undertaken take into account the impact of outstanding receivables of the controlled transactions vis-à-vis the uncontrolled transactions in determining the arm's length margin and no separate benchmarking is required. e) Not appreciating the facts and circumstances surrounding the receivables and re-characterizing the outstanding receivables as unsecured loans advanced to Associated Enterprises ('AE'). f) Not providing justification or benchmarking analysis for selection of State Bank of India's ('SBI') short-term deposit rates as an appropriate comparable uncontrolled price ('CUP') to benchmark the Appellant's outstanding receivables. g) Without prejudice to the above grounds, not appreciating that the receivables due from overseas AEs are in foreign currency and hence interest, if any, is to be benchmarked with the rates prevalent in the international market for foreign currency loans. h) Not undertaking any comparability benchmarking as prescribed under Chapter X of the Act. i) No custom to charge interest in the industry of the Assessee. j) Not considering netting off of outstanding receivables and payables. k) The Act provides for a longer credit period of 90 days for repatriation of money in the event of primary adjustment. l) Not allowing the credit period as allowed by RBI.

18. Ground 18: Short grant of TDS and TCS credits 18.1 The Ld. AO erred in law and facts by granting TDS credit amounting to INR 8,80,40,347/- instead of INR 8,85,62,654/- as claimed by the Appellant in its Return of Income.

9 ADP Private Limited 18.2 The Ld. AO has erred in law and in facts in not granting the TDS Credit of the transferor company to successor or transferee company even though the income of the transferor company is already considered by the successor company. 18.3 The Ld. AO erred in law and facts by not granting any TCS credit vis-à-vis INR 1,29,734/- as claimed by the Appellant in its Return of Income. 18.4 The Ld. AO has erred in law and in facts in not granting the TCS Credit of the transferor company to successor or transferee company even though the corresponding transactions are recorded by the successor/transferee company.

19. Ground 19: Arithmetic error in calculation of the total interest and fee payable 19.1 The Ld. AO has erred in determining the total interest and fee payable of INR 15,79,38,596 instead of INR 15,35,23,826, resulting in an increase in the total interest and fee payable by an amount of INR 44,14,770 on account of arithmetic error in the computation sheet issued by the Ld. AO. 19.2 The Ld. AO has erred in not appreciating the fact that the erroneous determination of the total interest and fee payable has unjustly increased the total tax liability by an amount of INR 44,14,770.

20. Ground 20: Consequential grounds 20.1 Without prejudice to the above grounds, on the facts and circumstances of the case, the Ld. AO erred in computing interest under section 234C of the Act on the assessed income instead of on the income returned by the Appellant. 20.2 The Ld. AO has erred in levying interest under section 234A and 234B of the Act without appreciating the fact that tax payable has arisen on account of adjustments made above. 20.3 On the facts and in the circumstances of the case, the Ld. AO erred in initiating penalty proceedings under section 270A of the Act for under- reporting and misreporting of income. The Appellant craves leave to add, alter, vary, omit, amend or delete one or more of the above grounds of appeal at any time before, or at the time of, hearing of the appeal, so as to enable the Hon'ble Tribunal to decide this appeal according to law.”

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5. Aggrieved, the assessee filed objections before the Dispute Resolution Panel challenging the TP adjustment on interest for delayed receivables, the disallowance of CSR expenditure under Section 80G, the disallowance under Section 40(a)(ia), and the addition on account of mismatch with Form 26AS. The Ld. DRP, vide its directions issued under Section 144C(5) of the Act dated 12.11.2024, rejected the objections filed by the assessee and 12 ADP Private Limited sustained all the additions made by the A.O. In pursuance of the directions of the DRP, the A.O. has passed the final assessment order under Section 143(3) r.w.s. 144C(13) r.w.s. 144B of the Act on 06.12.2024, determining the total income at Rs. 1,74,92,25,390/- by sustaining the additions towards TP adjustment on delayed receivables, disallowance of donation under Section 80G towards CSR expenditure, disallowance under Section 40(a)(ia), and addition towards Form 26AS mismatch.

“18. The main contentions of the Department, through their counsel are that Section 144C is a code in itself and hence on remand by the ITAT, the power of DRP to take up the dispute on additions by IPO, is not circumscribed by Section 153 and that in the absence of any express time limits contemplated under the Act, the time limits under Section 153 for reassessment cannot be read into Section 144C more particularly when the provisions of Section 153 are excluded by the non-obstante clause in section 144C(13) and hence the proceedings are not barred by limitation. Per contra, it has been contended by the learned senior counsels appearing for the respondent(s)/assessees that the outer time limit under Section 153 is applicable to every proceedings on remand and the department having slept over the issue for several years, cannot now redo the proceedings afresh, after certain rights have vested with the assessees. Even if specific provisions are not there to deal with this situation, the proceedings must be concluded within a reasonable time and hence the impugned proceedings are liable to be struck down and rightly done so by the learned Judge.

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 additional findings, which have been extracted in paragraphs 10 and 11 above, has allowed the writ petitions holding that the time limit 17 ADP Private Limited 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 he 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-dependent 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 hina to do ss, irrespective of the fact that DRP 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 time lines. It is an inter-department arrangement and it cannot defeat the rights of the assessee.

12. In Canado Sugar Refining Co. v. R. [1898 AC 735:67 LJPC 125), 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: 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 harmonise 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 harmonise 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 inexactitude 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]).

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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.

19. The court must ascertain the intention of the legislature by directing its attention not merely to the clauses to be construed but to the entire statute; it must compare the clause with other parts of the law and the setting in which the clause to be interpreted occurs. (See RS. Raghunath v. State of Karnataka [(1992) 1 SCC 335: 1992 SCC (L&S) 286: (1992) 19 ATC 507: AIR 1992 SC 81]) Such a construction has the merit of avoiding any inconsistency or repugnancy either within a section or between two different sections or provisions of the same statute. It is the duty of the court to avoid a head-on clash between two sections of the same Act. (See Sultana Begum v. Prem Chand Jain [(1997) 1 SCC 373: AIR 1997 SC 1006])." (iii) Franklin Templeton Trustee Services (P.) Lid. v. Amruta Garg [2021] 124 taxmann.com 326/164 SCL 720: "17. The concept of "absurdity" in the context of interpretation of statutes is construed to include any result which is unworkable, impracticable, illogical, futile or pointless, artificial, or productive of a disproportionate counter-mischief [See Bennion on Statutory Interpretation, 5th Edn., p. 969.]. Logic referred to herein is not formal or syllogistic logic, but acceptance that enacted law would not set a standard which is palpably unjust, unfair, unreasonable or does not make any sense. [Bennion on Statutory Interpretation, 5th Edn., p. 986.) When an interpretation is beset with practical difficulties, the courts have not shied from turning sides to accept an interpretation that offers a pragmatic solution that will serve the needs of society [Id, p. 971, quoting Griffiths, L.J.J. Therefore, when there is choice between two interpretations, we would avoid a "construction" which would reduce the legislation to futility, and should rather accept the "construction" based on the view that draftsmen would legislate only for the purpose of bringing about an effective result. We must strive as far as possible to give meaningful life to enactment or rule and avoid cadaveric consequences [See Principles of Statutory Interpretation by Justice G.P. Singh, 14th Edn., p. 50.]" 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 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 20 ADP Private Limited learned senior counsels on the judgments in Nokia India (P) Ltd. (supra) and Vedenta Ltd. (Supra) is well founded. The timeline given under the Act is to be strictly followed.

24. Insofar as the challenge to the show cause notice issued is concerned, though generally, the High Court will be circumspected to interfere at the stage of show cause notice, the law on the point is well settled with exceptions carved in the following cases; a. when the notice is issued beyond the period of limitation, b. when the notice is without authority, c. when notice is issued without following the procedures under the applicable Act or the rules framed thereunder and d. when the notice is issued with a prejudiced mind. The challenge must be available ex-facic 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 dewn 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 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 is 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 21 ADP Private Limited 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." (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, 22 ADP Private Limited however, shall be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors.

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.”

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“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 Arms 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 1440 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.

27. Having considered the language of sections 144C and 153, we cannot accept that the provisions of section 153 are excluded to the operation of section 144C.

“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 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 28 ADP Private Limited 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 Parus-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, 2021. 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 Kankanala 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.

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