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AIRBNB INDIA PRIVATE LIMITED,DELHI, INDIA vs THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), CENTRAL REVENUE BUILDING, DELHI, DELHI, INDIA | BharatTax

AIRBNB INDIA PRIVATE LIMITED,DELHI, INDIA vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), CENTRAL REVENUE BUILDING, DELHI, DELHI, INDIA

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ITA 4331/DEL/2024Status: DisposedITAT Delhi23 January 2026AY 2020-21Bench: SHRI YOGESH KUMAR U.S. (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)1 pages

AI SummaryAllowed

Facts

The assessee appealed against the final assessment order passed by the AO, contending that it was time-barred. The assessee argued that the assessment order was passed beyond the time frame prescribed under Section 153(1) read with Section 153(4) of the Income Tax Act, 1961.

Held

The Tribunal held that the final assessment order passed by the AO was barred by limitation as per Section 153 read with Section 144C of the Act. The Tribunal followed the ratio laid down by the Hon'ble High Court of Madras in CIT vs. Roca Bathroom Products Pvt. Ltd. and other binding precedents.

Key Issues

Whether the final assessment order passed under Section 143(3) r.w.s. 144C(13) r.w.s. 144B is barred by limitation as per Section 153 r.w. Section 144C of the Act.

Sections Cited

143(3), 144C(13), 144B, 153, 153(1), 153(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘H’: NEW DELHI

For Appellant: Ms. Reema Grewal, CA

For Respondent: Shri S.K. Jadhav, CIT-DR

Hearing: 20/01/2026Pronounced: 23/01/2026

O R D E R

PER MANISH AGARWAL, AM:

The present appeal is filed by the assessee against the final assessment order passed by AO dated 24.07.2024 u/s 143(3) r.w.s. 144C(13) r.w.s. and 144B of the Income Tax Act, 1961 (“the Act” in short) for Assessment Year 2020-21 subsequent to the direction of the Ld. Dispute Resolution Panel (DRP) vide direction dated 27.06.2024.

The Assessee raised Ground No. 2 contending that the Final Assessment order dated 24/07/2024 passed by the A.O. is time barred by limitation and is bad in law, as it has been passed beyond the time frame prescribed under section 153(1) read with section 153(4) of the Income Tax Act, 1961 ('Act' for short). The Ld. Assessee’s Representative relying on the ratio laid down by the Hon'ble High Court of Madras in the case of Commissioner of Income-tax Vs. Roca Bathroom Products (P.) Ltd. [2022] 445 537 (Madras) and also Airbnb India Pvt. Ltd. vs. ITO plethora of orders passed by the Co-ordinate Bench of the Tribunal, Hyderabad Bench sought for allowing the Ground No. 2 of the Assessee.

Per contra, the Ld. Department's Representative submitted that the issue of limitation arising from the interplay between Section 144C and Section 153 of the Act is presently unsettled and pending adjudication before the Hon'ble Supreme Court in the case of ACIT Vs. Shelf Drilling Ron Tappmeyer Ltd. in Special Leave to Appeal (C) Nos. 20569-20572/2023 therefore, deciding the very same issue by this Tribunal at this stage would be premature, thus submitted that the Tribunal cannot decide the issue of limitation in terms of the ratio laid down by the Hon'ble High Court of Madras in the case of Roca Bathroom Products (P) Ltd. (supra). Accordingly, the Ld. Department's Representative sought for deferral of adjudication of the present Appeal and also the issue of limitation. The Ld. Department's Representative has also filed detail written submission.

4. The identical submissions of the parties have been considered by us in the case of Teva Pharmaceutical & chemical Industries India Private Limited Vs. Assessment Unit, Income Tax Department/DCIT in vide order dated 19/01/2026. The Co-ordinate Bench of the Tribunal while and rejecting the preliminary objection raised by the Revenue and also the request of the Department for deferring the hearing of the Appeal, held as under:- “3. The Ld. Senior Counsel for the Assessee also relied on the several orders of the Hyderabad Bench of the Tribunal, wherein the Co-ordinate Bench of the Tribunal decided the similar issue in favour of the Assessee by quashing the respective assessment orders by relying on the ratio laid down by the Hon'ble High Court of Madras in the case of Commissioner of Income Tax Vs. Roca Bathroom Products (P) Ltd. (supra). Further submitted that, the Tribunal has also reserved liberty to the parties to get the Appeals revived if the decision of the Hon'ble Supreme Court on the issue in hand necessitates modification of the order of the Tribunal. Orders of the Hyderabad Tribunal relied by the Assessee are as under:- a). Aveva Solutions India LLP Vs. ITO-2025(12) TMI 1208 dated 19/11/2025. b) M/s Concentrix Catalyst Technologies (P) Ltd. Vs. Dy CIT- 2025 (12) TMI 1643 dated 05/12/2025 Airbnb India Pvt. Ltd. vs. ITO c) Shakti Hormann Private Limited Vs. DCIT, Circle-3(1)- 2025 (12) TMI 1351 dated 19/12/2025. d) M/s Western UP Tollway Limited, M/s MahuaBharatpur Expressways Ltd. Vs. DCIT, Circle 8(1) Hyderabad TMI-2025 (12) 1345 dated 12/12/2025. (e) DSM Shared Services India Private Limited Vs. The DCIT, Circle 8(1), Hyderabad-2015 (12) TMI 1283 dated 12/12/2025. f) M/s TMEIC Industrial Systems India Private Limited, Hyderabad and Dy. Circle 2(1) Hyderabad, 2025 (12) TMI 1282 dated 12/12/2025. g) Interwrap Corporation Private Ltd Vs. DCIT Circle-5 (1), Hyderabad 2025 (12) TMI 1278 dated 10/12/2025. h) R.A. K. Ceramics India Private Limited, Hyderabad Vs. Dy. CIT, 2025 (12) TMI 1277 dated 10/12/2025. i) Parexel International (IRL) Limited Ireland Vs. ADIT 2025 (12) TMI 1276 dated 10/12/2025. j) Dr. Reddy’s Laboratories Limited vs. The ACIT 2025 (12) TMI 1275 dated 25/12/2205. k) Repal Green Power Private Limited Vs. the DCIT 2025 (12) TMI 1272 dated: 26/11/2025.

7. Per contra, the Ld. Department's Representative at the outset requested not to decide the captioned Appeal and prayed for keeping the Appeal pending till the Larger Bench of the Hon'ble Supreme Court finally decides the case of Shelf Drilling Ron Tappmeyer Ltd. (supra). Further the Ld. Department's Representative submitted that there is a specific Interim Order passed by the Hon'ble Supreme Court on 22/09/2023 in the case of Assistant Commissioner of Income Tax Vs. Shelf Drilling Ron Tappmeyer Ltd. in Petitions for Special Leave to Appeal (C) Nos. 20569-20572/2023, wherein the Hon'ble Supreme Court has observed that the impugned Judgment (of Hon'ble High Court of Judicature at Bombay in the case of Shelf Drilling Ron Tappmeyer Ltd.) shall not be cited as precedent in any other subsequent matters until further order. Further submitted that the issue involved in the Roca Bathroom Products (P) Ltd. (supra) and in the case of Shelf Drilling Ron Tappmeyer Ltd. (supra), being identical, it should be construed that the interim order passed by the Hon'ble Supreme Court dated 22/09/2023 in the case of Shelf Drilling Ron Tappmeyer Ltd. shall also applicable to the ratio laid down by the Madras High Court in the case of Roca Bathroom Products (P) Ltd. (supra). Further submitted that the issue of limitation arising from the interplay between Section 144C and Section 153 of the Act is presently unsettled and pending adjudication before the Hon'ble Supreme Court and therefore, deciding the very same issue by this Tribunal at this stage would be premature, thus submitted that the Tribunal cannot decide the issue of limitation in terms of the ratio laid down by the Hon'ble High Court of Madras in the case of Roca Bathroom Products (P) Ltd. (supra). Accordingly, the Ld. Department's Representative sought for deferral of adjudication of the present Appeal and also the issue of limitation. The Ld. Department's Representative has also filed written submission which is reproduced as under:- “1. At the outset, the Revenue submits that the present written submissions are confined only to the preliminary issue of limitation arising from the interplay between section 144C and section 153 of the Income-tax Act, 1961. The Revenue Airbnb India Pvt. Ltd. vs. ITO respectfully reserves the right to make comprehensive submissions on all other issues on merits, as and when the same are taken up for hearing. A. Introductory submission 2. The present appeals raise the issue whether, in cases governed by section 144C, the time consumed in the proceedings before the Dispute Resolution Panel ("DRP") is required to be subsumed within the limitation prescribed under section 153, or whether section 144C operates as a special statutory mechanism with its own distinct timelines for completing the assessment after passing the draft order.

12. It is respectfully submitted that the ratio laid down by the Hon'ble Bombay High Court in Shelf Drilling Ron Tappmeyer Ltd. and by the Hon'ble Madras High Court in Roca Bathroom Products (P.) Ltd. arises on the same legal controversy, namely the computation of limitation involving the interplay of sections 144C and 153. The principle enunciated in both decisions is, in substance, identical-ie., that the timelines under section 153 continue to govern and must subsume the DRP mechanism under section 144C. In this context, it is material that the Hon'ble Supreme Court has passed a specific interim direction that the judgment of the Hon'ble Bombay High Court in Shelf Drilling shall not be cited as a precedent in any other subsequent matter. The Revenue, therefore, submits that, when the Supreme Court has expressly restrained reliance on the Shelf Drilling ratio, the same cannot be permitted to be applied indirectly through another non-jurisdictional decision laying down an identical proposition, particularly when Roca Bathroom itself is under appeal, and leave has been granted by the Hon'ble Supreme Court. Accordingly, Roca Bathroom cannot be treated as determinative or enforced as a basis to conclude the controversy, and the issue ought to await authoritative settlement by the Hon'ble Supreme Court. C. Revenue's interpretative submissions on sections 144C and 153 (without prejudice) 13. Without prejudice to the prayer for deferral, the Revenue respectfully submits that section 144C was introduced to create a structured and time-bound pre- finalization review mechanism before a panel of Commissioners in cases involving "eligible assessees". The legislative design of section 144C indicates that it is a special statutory mechanism and cannot be interpreted in a manner that renders the Airbnb India Pvt. Ltd. vs. ITO scheme unworkable. Therefore, the timelines prescribed under section 153 will not apply to the final assessment order passed u/s 144C(13) of the Income Tax Act.

11. Further, the Hon'ble Supreme Court in the case of Shree Chamundi Mopeds Ltd. Vs. Church of South India Trust Association (1992) 3 SCC 1, held that, mere grant of stay does not obliterate the binding nature of the Judgment passed by the Hon'ble High Court in following manners:- “In the instant case, the proceedings before the Board under ss. 15 and 16 of the Act had been terminated by order of the Board dated April 26, 1990 whereby the Board, upon consideration of the facts and material before it, found that the appellant-company had become economically and commercially non-viable due to its huge accumulated losses and liabilities and should be wound up. The appeal filed by the appellant-company under s. 25 of the Act against said order dated January 7, 1991. As a result of these orders, no proceedings under the Act was pending either before the Board or before the Appellate Authority on February 21, 1991 when the Delhi High Court passed the interim order staying the operation of the Appellate Authority dated January 7, 1991. The said stay order of the High Court cannot have the effect of reviving the proceedings which had been disposed of by the Appellate Authority by its order dated January 7, 1991. While considering the effect of an interim order staying the operation of the order under challenge, a distinction has to be made between quashing of an order and stay of operation of an order Quashing of an order results in the restoration of the position as it stood on the date of the passing of the order which has been quashed. The stay of operation of an order does not, however, lead to such a result. It only means that the order which has been stayed would not be operative from the date of the passing of the stay order and it does not mean that the said order has been wiped out from existence. This means that if an order passed by the Appellate Authority is quashed and the matter is remanded, the result would be that the appeal which had been disposed of by the said order of the Appellate Authority would be restored and it can be said to be pending before the Appellate Authority after the quashing of the order of the Appellate Authority. The same cannot be said with regard to an order staying the operation of the order of the Appellate Authority because in spite of the said order, the order of the Appellate Authority continues to exist in law so long as it exists, it cannot be said that the appeal which has been disposed of by the said order has not been disposed of and is still pending. We are, therefore, of the opinion that the passing of the interim order dated February 21, 1991 by the Delhi High Court staying the operation of the order of the Appellate Authority dated January 7, 1991 does not have the effect of reviving the appeal which had been dismissed by the Appellate Authority by its order dated January 7, 1991 and it cannot be said that after February 21, 1991, the said appeal stood revived and was pending before the Appellate Authority. In that view of the matter, it cannot be said that any proceedings under the Act were pending before the Board or the Appellate Authority on the date of the passing of the order dated August 14, 1991 by the learned Single Judge of the Karnataka High Court for winding up of the company or on November 6, 1991 when the Division Bench passed the order dismissing O.S.A. No. 16 of 1991 filed by the appellant- company against the order of the learned Single Judge dated August 14, 1991. Section 22(1) of the Act could not, therefore, be invoked and there was no impediment in the High Airbnb India Pvt. Ltd. vs. ITO Court dealing with the winding up petition filed by the respondents. This is the only question that has been canvassed in Civil Appeal No. 126 to 1992, directed against the order for winding up of the appellant-company. The said appeal, therefore, fails and is liable to be dismissed.”

17.

The Co-ordinate Bench of the Tribunal of Hyderabad Bench in the case of Interwrap Corp Private Ltd (Successor of Owens Corning Industries (India) Pvt. Ltd. (Successor of Owens Corning Industries (India) Private Limited Verses The Deputy Commissioner of Income Tax, Circle-5(1), Hyderabad in reported in 2025 (12) TMI 1278-ITAT Hyderabad dated 10/12/2025, considered overall circumstances including the Interim Order passed in the case of Shelf Drilling Ron Tappmeyer Ltd. by the Hon'ble Supreme Court and decided the issue of limitation in favour of the Assessee by following the Judgment of Bombay High Court in the case of Roca Bathroom Products Pvt. Ltd (supra). The Co-ordinate Bench of the Tribunal also safeguarded the interest of the parties by granting liberty. The relevant portions of the order in the case ofInterwrap Corp Private Ltd (supra) are as under:- “17. The sum and substance of the ratio laid down by the Hon'ble Madras High Court in the case of CIT Vs. Roca Bathroom Products Private Limited (supra) and the Hon'ble Bombay High Court in the case of Shelf Drilling Ron Tappmeyer Limited Vs. ACIT, International Taxation (supra), which was later followed by the Co-ordinate Bench of the Tribunal in the case of Aveva Solutions India LLP, Hyderabad Vs. ITO (supra), is) that the upper time limit provided under Section 153(1) and Section 153(4) of the Act is applicable for the final assessment order passed by the A.O. under Section 143(3) r.w.s. 144C(13) r.w.s. 144B of the Act. In case the final assessment order passed by the A.O. under Section 143(3) r.w.s. 144C(13) r.w.s. 144B is beyond the upper time limit provided Airbnb India Pvt. Ltd. vs. ITO under Section 153(1) and Section 153(4) of the Act, then the said order is beyond the limitation prescribed and liable to be quashed. In the present case, there is no dispute with regard to the fact that the normal time limit available for passing the assessment order, as per the provisions of Section 153(1) of the Act, is 18 months from the end of the relevant assessment year, which would expire on 30.09.2020 for A.Y. 2018-19. Further, as per the provisions of Section 153(4) of the Act, where a reference under Section 92CA of the Act was made to the Transfer Pricing Officer (TPO), the time) limit available stands extended by another 12 months, and in the present case, the upper time limit for completion of assessment proceedings would expire on 30.09.2021.

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) 3 SCC 478: 1988 SCC (Tax) 409 at page 4871 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"

Airbnb India Pvt. Ltd. vs. ITO (ii) Govt. of India v. Citedal Fine Pharmaceuticals, [(1989) 3 SCC 483 1989 SCC (Tax) 464 at page 487] 6. Learned counsel appearing for the respondents urged that Rule 12 is unreasonable and violative of Article of 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 but that by itself does not render the rule unreasonable or violative of Article 14 of the Constitution prescribed any period within which recovery of any duty as contemplated by the rule is to be made. 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 Coop. Milk Producers Union Ltd., [(2007) 11 SCC 363: 2007SCC OnLine SC 1254 at page 367] 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 suomotu 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.

23.

The question at would be the reasonable period did not fall for consideration there The binding precedent of this Court, some of which had been referred to us heretobefore had not The counsel appearing for the parties were remissin bringing the same to the notice of the Court Furthermore from a perusal of the impugned notice dated 4-9-2006 is Apparent that the revisional authority did not assign any reason as to why such a notice was being issued considered after a period of 53% years" Generally no hard and fast rule can be laid down to indicate what a reasonable time is. It though depends upon the facts of the each case drawing a clue from Article 113 of the Limitation Act the residual entry, it would be reasonable to conclude that in such cases, action is to be concluded within 3 years Needless to say if the statute prescribes shorter period, the doctrine of reasonable time will not be applicable and the timeline under the statute is to be strictly followed 27. For the reasons set out 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 (24) or 153 (3) is applicable, when the matters are remanded back irrespective of whether it is to the Assessing Officer of 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 ORP 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. (d) In matter involving transfer pricing. upon remand to DRP, the Assessing officer is to pass a de-nova 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. (e) The outer time limit of 33 months in case of reference to 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.