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Facts
The assessee challenged the final assessment orders for AY 2017-18 and 2018-19. The key issue was whether the assessment orders were passed within the time limit prescribed under Section 144C(13) of the Income Tax Act, 1961.
Held
The Tribunal held that the final assessment orders for both assessment years were passed beyond the time limit stipulated in Section 144C(13) of the Act. Consequently, the impugned assessment orders were set aside.
Key Issues
Whether the final assessment orders passed by the Assessing Officer were within the statutory time limit prescribed under Section 144C(13) of the Income Tax Act, 1961.
Sections Cited
143(3), 144C(13), 92CA, 144C(5), 154
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Income Tax Appellate Tribunal, DELHI
Before: SHRI YOGESH KUMAR U.S. & SHRI BRAJESH KUMAR SINGH
(A.Y 2018-19) Luminous Power Technologies Vs Deputy Director of Income Private Ltd. C-56, Mayapuri Tax, Industrial Area, Phase-II, New Circle 13(1), New Delhi Delhi-110064PAN: AAACS3561K Appellant Respondent Assessee by Sh. Ajay Vohra, Sr. Adv & Ms.Soumya Jain, CA Revenue by Sh. S. K. Jadhav, CIT- DR Date of Hearing 12/11/2025 Date of Pronouncement 05/12/2025 ORDER
PER YOGESH KUMAR, U.S. JM:
The captioned appeals are filed by the assessee pertaining to Assessment Years 2017-18& 2018-19 challenging the Final Assessment Orders passed u/s 143(3) r.w. Section 144C(13) of the Income Tax Act, 1961 ('Act' for short) by Deputy Commissioner of Income Tax, Circle -13(1)- Delhi dated 15/05/2022 & 18/05/2022 respectively.
Both the appeals are pertaining to single assessee and identical contentions are raised by the Ld. Senior Counsel Sh. Ajay Vohra appearing for Assessee's Representative. Therefore, both the Appeals of the Assessee are decided in this common order. For the sake of convenience, brief facts of the case for A.Y 2017-18 has been considered which are as under:-
Assessee filed return of income for A.Y 2017-18 at Rs. 1,66,06,01,330/, which has been processed by CPC on the returned income. The case of the Assessee was selected under CASS and notices were issued which have been replied by the Assessee.
Considering the fact that the Assessee has entered into international transaction with Associated Enterprises (A.E), a reference u/s 92CA of the Act made to the T.P.O. for determining ‘Arm’s Length Price’ in respect of international transaction/specific domestic transactions undertaken by the Assessee during the F.Y 2015-16. The Ld. T.P.O. passed an order u/s 92CA(3) of the Act on 31/01/2021 determining the transfer price adjustment to be made to the income of the Assessee. Subsequently, a rectification order u/s 154 of the Act was passed by the TPO on 05/02/2021 by rectifying the order passed du/s 92CA(3) of the Act, wherein proposed to make an adjustment of Rs. 4,62,26,427/. The Assessee filed objection before the Dispute Resolution Panel (‘DRP’) and the Ld. DRP issued directions u/s 144C(5) of the Act on 04/03/2022. An order giving effect to the directions of TPO came to be passed u/s 144C of the Act on 21/04/2022. Further, a Final Assessment order came to be passed u/s 143(3) r.w. Section 144C(13) of the Act on 15/05/2022, wherein the Ld. A.O. assessed the total income of the Assessee at Rs. 169,48,19,614/- as against the returned income of Rs. 1,66,06,01,230/-.
In so far as Assessment Year 2018-19 is concerned, the DRP issued directions on 04/03/2022 under Section 144C (5) of the Act and order giving effect to the directions of DRP came to be passed u/s 144C of the Act on 21/04/2022 and a final assessment order came to be passed u/s 143(3) r.w. Section 144C(13) of the Act on 18/05/2022, wherein the Ld. A.O. assessed the total income of the Assessee at Rs. 2,33,54,82,920/- as against declared income of Rs. 2,31,92,15,760/-.
Aggrieved by the final assessment orders dated 15/05/2022 for Assessment Year 2017-18 and 18/05/2022 for Assessment Year 2018-19, Assessee preferred the captioned Appeals.
The Ld. Counsel for the Assessee at the outset submitted that the final assessment orders have been passed beyond the time limit specified u/s 144C (13) of the Act, therefore, the impugned assessment orders deserves to be set aside by the Tribunal. The Ld. Counsel for the Assessee relied on following judicial pronouncements:- a)Louis Dreyfus Company India (P.) Ltd. vs. DCIT [2024] 159 taxmann.com 244 (Delhi) b) PCIT vs. Fiberhome India (P.) Ltd. [2024] 159 taxmann.com 772 (Delhi) c) PCIT vs. Sterling Oil Resources Ltd. [2025] 171 taxmann.com 581 (Bombay) d) Rapiscan Systems (P.) Ltd. vs. ADIT [2025] 170 taxmann.com 753 (Telangana) e) CIT vs. Ramco Cements Ltd. [2025] 171 taxmann.com 306 (Madras) f) Hyundai Rotem Company Indian Project Offices vs. ACIT [2024] 169 taxmann.com 367 (Delhi - Trib.) g) Rio Tinto India Private Ltd. vs. ACIT h) Microsoft Corporation (India) P. Ltd. vs. DCIT ITA No.1862/Del/2022
Per contra, the Ld. Department's Representative relying on the orders of the Lower authorities, submitted that the Final Assessment orders have been passed in accordance with law and the addition/disallowance have been made on the merits of the case.
Further submitted that, since the Assessee is liable to pay the actual tax due, shall not be allowed to escape from tax liability on the technical grounds. Thus, sought for dismissal of the Appeals.
We have heard both the parties and perused the material available on record. It is the specific contention of the Ld. Senior Counsel appearing for the Ld. Assessee's Representative that as per u/s 144C(13) of the Act, the time limit prescribed for passing final assessment orders was 30/04/2022 in both the Assessment Years.
However, the assessment orders have been passed on 15/05/2022 and 18/05/2022 respectively which are beyond the limitation prescribed u/s 144C(13) of the Act. The Ld. Assessee's Representative has filed the date chart reflecting the dates and events/particulars in both the years which is reproduced as under:-
As per Section144C (13) of the Act, upon receipt of direction issued under Sub Section (5) of Section 144C by the DRP, the A.O. shall inconformity with the directions, complete, the assessment within one month from the end of month in which such direction received. For the sake of convenient Section 144C(13) is reproduced as under:-
“Section 144C(13) :
Upon receipt of direction issued under Sub Section (5), the Assessing Officer, shall, in conformity 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 Jurisdictional High Court in the case of Louis Dreyfus Company India (P.) Ltd. Vs. Deputy Commissioner of Income tax reported in [2024] 159 taxmann.com 244(Delhi), held that the assessment order made beyond the period of one month from the end of the month in which directives of DRP were received by the Assessing Officer, amounts to an abject failure on the part of the Assessing Officer to comply with the mandatory time lines as incorporated in Section 144C(13) of the Act, accordingly, set aside the assessment order. Similar view has also been taken in the following Judgments:- i) PCIT vs. Fiberhome India (P.) Ltd. [2024] 159 taxmann.com 772 (Delhi) ii) PCIT vs. Sterling Oil Resources Ltd. [2025] 171 taxmann.com 581 (Bombay) iii)Rapiscan Systems (P.) Ltd. vs. ADIT [2025] 170 taxmann.com 753 (Telangana) iv) CIT vs. Ramco Cements Ltd. [2025] 171 taxmann.com 306 (Madras) v) Hyundai Rotem Company Indian Project Offices vs. ACIT [2024] 169 taxmann.com 367 (Delhi - Trib.) vi) Rio Tinto India Private Ltd. vs. ACIT vii) Microsoft Corporation (India) P. Ltd. vs. DCIT ITA No.1862/Del/2022
In view of the fact that the Final Assessment order should have been passed on or before 30/04/2022 as per Section 144C(13) of the Act in both the Assessment Years under consideration in the captioned Appeals, as the assessment orders have been passed on 15/05/2022 and 18/05/2022 respectively for Assessment Years 2017-18 and 2018-19, which are beyond the time limit prescribed u/s 144C(13) of the Act. Therefore, both the impugned assessment orders are hereby set aside.
In the result Appeals of the Assessee in and 1594/Del/2022 are allowed.