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TEVA PHARMACEUTICAL & CHEMICAL INDUSTRIES INDIA PRIVATE LIMITED,MUMBAI vs DCIT, CIRCLE-25(1), DELHI | BharatTax

TEVA PHARMACEUTICAL & CHEMICAL INDUSTRIES INDIA PRIVATE LIMITED,MUMBAI vs. DCIT, CIRCLE-25(1), DELHI

ITA 4197/DEL/2024Status: DisposedITAT Delhi19 January 2026AY 2020-21Bench: YOGESH KUMAR U.S. (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)1 pages

AI SummaryAllowed

Facts

The Assessee filed an appeal challenging the Final Assessment Order. The primary ground raised was that the order was barred by limitation, as it was passed beyond the time prescribed under Section 153 read with Section 144C of the Income Tax Act, 1961.

Held

The Tribunal, following the ratio laid down by the Madras High Court in the case of Roca Bathroom Products Pvt. Ltd. and numerous Hyderabad Bench orders, held that the Final Assessment Order was indeed barred by limitation. Consequently, the impugned order was quashed.

Key Issues

Whether the Final Assessment Order passed under Section 143(3) r.w.s. 144C(13) was barred by limitation as per Section 153 r.w. Section 144C of the Income Tax Act, 1961.

Sections Cited

Section 143(3), Section 144C, Section 144B, Section 153, Section 158AB, Section 260A, Section 261, Article 136, Article 141

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI

Hearing: 19/01/2026Pronounced: 19/01/2026

(A.Y. 2020-21) Teva Pharmaceutical & Chemical Vs Assessment Unit, Income Industries India Private Limited, Tax Department/Deputy 8th Floor, C-Wing time Square, Commissioner of Income AndheriKurla Road, Marol Naka, Tax, Circle 25(1), Opp Mittal Industrial Estate C. R. Building, Delhi- Andheri (E), Mumbai 400059, 110001 Maharashtra, India PAN: BNSPK7225H Appellant Respondent Assessee by Sh. Sachit Jolly, Sr. Adv, Sh. SohamDua, Adv& Sh. Abhiudaya Shankar Bajpai, Adv Revenue by Sh. S. K. Jadhav, CIT DR Date of Hearing 19/01/2026 Date of Pronouncement 19/01/2026 ORDER

PER YOGESH KUMAR, U.S. JM:

The captioned appeal is filed by the Assessee challenging the Final Assessment Order passed u/s 143(3) r.w.s. 144C(13) r.w.

Section 144B of the Income Tax Act, 1961 (the Act in short) dated 26/07/2024 pertaining to the Assessment Year 2020-21.

The Assessee has challenged the legality or otherwise of the impugned Final Order raising several grounds of Appeal on merits as well as on the legal issues including the issue of limitation. However, the Ld. Senior Counsel Sh. Sachit Jolly, appearing for the Assessee, reserving the right to make comprehensive submission on all other issues on merits at a later stage if required, addressed on Ground No. 3 of the Assessee, submitted that the impugned Final Assessment Orderdated 26/07/2024 passed u/s 143 (3) r.w. Section 144C(13) r.w.

Section 144B of the Act is barred by limitation in terms of Section 153r.w.s Section 144C of the Act and is liable to be quashed. The Ld. Counsel has relied on the Judgment of Hon'ble High Court of Madras in the case of Commissioner of Income Tax Vs. Roca Bathroom Products (P) Ltd. (2022) 445 ITR 537 (Madras) and submitted that, the Hon'ble High Court of Madras held that the time limit prescribed u/s 153 of the Act has to be adhered to and that both Section 144C and 153 of the Act are mutually inclusive and interdependent. Further submitted that, presence of notwithstanding clause in Section 144C(13) of the Act would not exclude the operation of Section 153 of the Act. Hence, the Assessing Officer is required to complete the assessment proceedings withinthe time prescribed under Section 153 of the Act.

17. A further significant facet is that the eligible assessee activates the DRP route. If objections are not filed, the statute permits expedited finalisation. If objections are filed, the statutory mechanism consumes time by design. The assessee cannot, after choosing the statutory route, contend that the assessment becomes void due to the time consumed in the process statutorily created for his benefit. 10. In view of the above, the assessee's contention is required to be rejected as the final assessment order is within the time limits prescribed under section 144C D. Issue presently judicially pending: combined effect 19. In the present circumstances: (i) the Bombay High Court judgment in 'Shelf Drilling Ron Tappmeyer Ltd. is under an express Supreme Court restraint on citation: (ii) the Madras High Court judgment in the case of 'Roca Bathroom' is under appeal with leave granted; and (iii) the Supreme Court has delivered a split verdict in Shelf Drilling Ron Tappmeyer Ltd and referred the issue to a Larger Bench. 20. Therefore, no binding law exists, and the issue remains judicially pending. E. Hyderabad ITAT order(s) - respectfully distinguishable and unsafe to follow 21. The Revenue respectfully submits that the Hyderabad Bench, in certain cases, including Aveva Solutions India LLP v.Income-tax Officer, [2025] 180 taxmann.com 731 (Hyderabad Trib.) in IT APPEAL NO. 1170 (HYD) OF 2024 dated NOVEMBER 19,2025 has taken an approach that ought not to be followed by this Hon'ble Tribunal. 22. The Hyderabad Bench has proceeded to finally quash the assessment on this issue by relying upon non- jurisdictional High Court decisions and by taking note of the Supreme Court proceedings. With respect, the approach is legally vulnerable for the following reasons: (1) Supreme Court restraint overlooked: The Supreme Court has expressly restrained, citing the Bombay High Court judgment in Shelf Drilling as precedent. Any reasoning that substantially draws strength from the Bombay High Court view is inconsistent with such restraint (ii) Internal inconsistency pendency acknowledged yet final relief granted: The Hyderabad order notes the issue is pending before the Supreme Court / Larger Bench, but proceeds to grant final relief. Once a matter is acknowledged as pending authoritative adjudication, judicial discipline favours deferral, (iii) Conditional final relief with "revival liberty" is procedurally unsound: The adoption of a device of quashing with "liberty to revive based on Supreme Court outcome is not contemplated within the statutory appellate framework and creates uncertainty.

“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 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.”

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 23 interpreted occurs. (See R.S. 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) Ltd. v. AmrutaGarg, (2021) 6 SCC 736 : 2021 SCC OnLine SC 88 at page 752: “ 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 [ SeeBennion 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.] .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 24 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.]”

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" (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 resvisional 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.