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Facts
The assessee filed an appeal against the final assessment order dated 27.03.2025. The primary ground raised by the assessee was that the assessment order was barred by limitation under Section 144C(13) of the Act. The assessee presented a timeline of events, including DRP directions and the AO's passing of the final assessment order, to support its claim.
Held
The Tribunal, relying on decisions from the Hon'ble Delhi High Court and other High Courts, held that the assessment order dated 27.03.2025 was indeed passed beyond the time limit prescribed under Section 144C(13) of the Act. The uploading of DRP directions on the ITBA portal was considered the effective date for computing the limitation period.
Key Issues
Whether the final assessment order passed by the AO was barred by limitation as per Section 144C(13) of the Income Tax Act, 1961.
Sections Cited
144C, 144C(13), 260, 144B, 270A, 234A, 234B, 234D, 153, 153B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, ‘I’: NEW DELHI
Before: SHRI C.N. PRASAD & SHRI M. BALAGANESH
Date of Hearing 11.12.2025 Date of Pronouncement 28.01.2026 ORDER
PER C.N. PRASAD, JM,
This appeal is filed by the assessee against the final assessment order dated 27.03.2025 passed u/s.144 r.w.s 260 r.w.s 144B. The assessee in its appeal raised the following grounds :- 1. Legal Grounds pertaining to annulment of final assessment order 1 & mistakes apparent from record
(Please refer Para A of Annexure A for detailed grounds of appeal
) Rs. 151452708
2. Transfer Pricing adjustment of Rs. 19,23,88,103/-w.r.t payment 2 of lead member fee (Please refer Para B of Annexure A for detailed grounds of appeal) Rs. 151452708
3. Without prejudice to above grounds, consideration of incorrect 3 transaction amount for computation of adjustment (Please refer Para C of Annexure A for detailed grounds of appeal) Rs. 118061920
4. Without prejudice to above grounds, Ld. AO applied tax rate @ 40% instead of 30% and surcharge @ 37% instead of 15% (please refer Para C of Annexure A for detailed grounds of appeal) Rs. 151452708
5. Without prejudice to above grounds, Ld. AO erred in short grant 5 of TDS while computing the tax payable (refundable) [Please refer Para C of Annexure A for detailed grounds of appeal) Rs. 5656136
6. Without prejudice to above grounds, Ld. AO erred in levying 6 interest u/s 234A & 234B & 234D while computing tax payable/(refundable) [Please refer Para C of Annexure A Rs. 32203064
7. Without prejudice to above grounds, Ld. AO has erred in initiating penalty proceedings u/s. 270A of the Act.
8. The Appellant craves leave to add, alter, amend, amplify or modify any or all of the above grounds of appeal at or before the time of hearing of appeal.”
Referring to ground No.1 of grounds of appeal the Ld. Counsel for the assessee, at the outset, submitted that the assessment order passed by the AO is barred by limitation u/s.144C(13). The Ld. Counsel for the assessee submitted that the impugned order dated 27.03.2025 is barred by limitation interms of the statutory timeline mandated as per sub section (13) to section 144C of the Act. The Ld. Counsel for the assessee referring to the said provision submitted that upon receipt of the directions issued under sub section-5, the AO shall inconformity 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.
The Ld. Counsel for the assessee submitted that in the light of the above provisions the following data are relevant to ascertain whether the impugned order dated 27.03.2025 is passed within the prescribed time as mandated under the Act. Date Particulars 30.09.2024 Date of DRP Directions as mentioned in the DRP directions 30.09.2024 Date of DRP Directions as mentioned in the final assessment order 21.10.2024 Date on which TPO passed order giving effect to DRP Directions 27.03.2025 Date on which AO passed final assessment order
Referring to the above dates the Ld. Counsel submitted that it is evident that the DRP directions have been issued in the month of September, 2024 and uploaded on ITBA portal in the same month and hence the service of order to the AO stands completed on the date of such upload.
The Ld. Counsel submitted that consequentially it was incumbent upon the AO to complete the assessment within one month from the end of the month in which such directions were received by him in terms of Section 144C (13) of the Act which would end on October 31, 2024. However, in the case of the assessee the final assessment order has been passed in March, 2025 and, therefore, is clearly barred by limitation.
Reliance was placed on the decisions of the Hon’ble Delhi High Court in the case of Louis Dreyfus Company India Private Limited Vs. DCIT (2024) 159 taxmnan.com 244 and in the case of PCIT Vs. M/s. Fiberhome India Private Limited (2024) 159 taxmann.com 772. Relying on these decisions the Ld. Counsel submitted that it was held by Hon’ble High Court that it is mandatory upon the AO to complete the assessment as per the timeline prescribed as per provisions of sub section- (13) of section144C of the Act, failing which assessment proceedings are barred by limitation and liable to be set aside. The Ld. Counsel for the assessee further placed reliance on the following decisions :- a. Vodafone Idea Ltd. v. CPC, [2023] 459 ITR 413 (Bom.) (Bombay HC) b. Taeyang Metal India Private v. DCIT, [2024] 160 taxmann.com 536 (Madras) (Madras HC) c. Rapiscan Systems (P.) Ltd. v. ADIT, [2025] 170 taxmann.com 753 (Telangana) (Telangana HC)
d. CIT v. Ramco Cements Ltd., [2025] 171 taxmann.com 306 (Madras) (Madras HC) e. PCIT v. Sterling Oil Resources Ltd., [2025] 171 taxmann.com 581 (Bombay) (Bombay HC) f. Microsoft Corporation (India) Pvt. Ltd v. DCIT, (ITAT Delhi) g. Nikon India Private Ltd. v. ACIT Central Circle -3(1), (ITAT Delhi) h. Canon India Pvt. Ltd. v. DCIT, (ITAT Delhi) i. Aero Club v. ACIT, ITA No. 2957/Del/2022 (ITAT Delhi) j. Hyundai Rotem v. ACIT, ITA No.2027/Del/2022 (ITAT Delhi) k. BBC World Service India Pvt. Ltd v. ACIT, ITA No. 1627/Del/2022 (ITAT Delhi) l. CNH Industrial (India) Pvt. Ltd. v, ITO, ITA No.688/Del/2025 (ITAT Delhi) m. Arm Embedded Technologies P. Ltd. v. DCIT, IT(TP)A No. 971/Bang/2022 (ITAT Bangalore) n. Signify Holdings B.V. v. ACIT, ITA No. 314/Kol/2023 (ITAT Kolkata)
In the light of the above the Ld. Counsel for the assessee submits that the impugned assessment order dated 23.03.2025 is barred by limitation and as such is null and void.
On the other hand the Ld. DR strongly supported the orders of the authorities below. The Ld. DR also submitted that a report from the AO shall be furnished in 2 weeks time ascertaining the facts. However, till the date of dictation of this order no such report has been submitted before us controverting the submissions of the Ld. Counsel for the assessee.
Heard rival submissions, perused the orders of the authorities below. We find considerable merits in the submissions of the Ld. Counsel for the assessee that the final assessment order dated 27.03.2025 passed u/s.144C r.w.s 260 r.w.s. 144B was passed beyond the time limit specified in Sub-section (13) of section 144C of the Act.
In the case of Louis Dreyfus Company India Private Limited Vs. DCIT (supra), the Hon’ble Delhi High Court held as under :-
"20. Undisputedly, the directive of the DRP came to be uploaded on the ITBA portal on 24 June 2022 It is additionally stated to have been dispatched through Speed Post to the third respondent (TPO) and the fourth respondent (Additional /Joint / Deputy /Assistant Commissioner of Income Tax, National Faceless Assessment Centre, New Delhi) on 27 June 2022. It is thereafter that the TPO appears to have passed the order dated 25 July 2022. 21.
We, however note that paragraph 4(2) of the E-as, 2019 makes the following salient provisions:- "4(2). All communication among the assessment unit, review unit, verification unit or technical unit or with the assesse or any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making an assessment under this Scheme shall be through the National e-assessment Centre."
It is thus manifest that as per the provisions of E-as, 2019, all orders, notices and decisions have to be necessarily uploaded on the ITBA portal and as part of the larger faceless assessment regime which now holds the field. The uploading of the directive of the DRP on the ITBA portal would thus constitute valid and sufficient service and the period of limitation as prescribed in Section 144C(13) of the Act would be liable to be computed bearing that crucial date in mind. Once the aforesaid position becomes clear, it is evident that the order of assessment, if at all could have been framed lastly by 31 July 2022. There has thus been an abject failure on the part of the first respondent to comply with the mandatory timelines as incorporated in the aforenoted provisions. Accordingly, the writ petition is liable to be allowed and the impugned order of assessment and the consequential penalty proceedings are thus liable to be set aside on this short score alone.
The writ petition is allowed. The order of assessment dated 24 August 2022 as well as the penalty show cause notice dated 24 August 2022 are quashed and set aside. For reasons aforenoted and consequent to a failure on the part of the respondents to implement the directives of the DRP, the return as submitted by the petitioner would be deemed to have been accepted and the tax liability worked accordingly."
We further find that the Hon’ble Delhi High Court in the case of Honda R & D (India) (P) Ltd. Gurgaon vs. ACIT, Circle -10(1), New Delhi (ITA No.1733/Del/2022) held as under :-
"17. In the context of faceless assessment process time and place of dispatch and receipt of electronic document (in this case DRP order) is required to be ascertained by reference to section 13 of Information Technology Act, 2000 which is the basis prescribed under section 144B of Income Tax Act also (refer section 144 B (6)(v)). Hon'ble Supreme Court in case of G.S Chatha Rice Mills (supra), interpreted this very provision. Applying principles laid down by Hon'ble Supreme Court, only relevant fact necessary for deciding Ground No. 4 in present appeal relating to time barred assessment, is time of uploading by DRP of DRP order onto ITBA portal. Intimation letter to DRP order unambiguously shows Page | 7
27th April 2022 as date of uploading of DRP order. This fact cannot be disputed. Except this critical and relevant information everything else (like when order is visible to AO, date of uploading some document by DCIT/ACIT circle 2 (1) (1) Delhi) has been submitted by Respondents. It is fair to conclude that date of uploading DRP order on ITBA portal is 27.04.2022. As per section 144C(13) of the Act, assessment had to be completed on or before 31.05.2022. In present case the assessment is completed only on 30.06.202 i.e. it is time barred null and void. Therefore, impugned assessment order dated 30.06.2022 is set aside being barred by limitation. Other grounds having become academic in nature are left open.”
Ratio of the above decisions squarely applies to the facts of the assessee’s case. Thus, respectfully following the above said decisions we hold that the final assessment order dated 27.03.2025 passed u/s.143(3) r.w.s. 144C (13) is barred by limitation and the same is hereby quashed. Ground No.1 of grounds of appeal of the assessee is allowed.
13. Since we have quashed the final assessment order on legal ground all other grounds on merits need not be adjudicated as they become only academic in nature at this stage and they are left open.
In the result, the appeal of the assessee is partly allowed as indicated above.
Order pronounced in the open court on 28.01.2026.