STERLING OIL RESOURCES LTD,MUMBAI vs. DCIT 13(2)(2), MUMBAI

This appeal is filed by the assessee against the direction of the DRP-IV Mumbai dated 19.12.2014 pertaining to assessment year 2010-11.

In this appeal the assessee has raised as many as 7 grounds, both on limitation and also on merits. As far as the limitation is concerned, it is the contention of the assessee that the assessment order passed u/s. 143(3) r.w. Sec. 144C(13) dated 27.2.2015 is bad in law and void-ab-initio being barred by time and hence deserves to be quashed.

The Ld. Counsel for the assessee Shri P. Pardiwala submits that draft assessment order was passed on 28.3.2014 and assessee filed objections on 30.4.2013 before the DRP against the draft assessment order. The Ld. Counsel for the assessee submits that the DRP passed order on 19.12.2014 and this was received by the Assessing Officer on 23.12.2014. The final assessment order was passed on 27.2.2015 by the Assessing Officer. Inviting our attention to the provisions of Sub.Sec (13) of Sec. 144(C) of the Act, the Ld. Counsel for the assessee submits that the final assessment order should have been passed within one month from the end of the month, in which such direction was received by the Assessing Officer from DRP. The Ld. Counsel for the assessee submits that in this case, though the Assessing Officer received the directions of the DRP on 23.12.2014, the final order was passed on 27.2.2015 and therefore it is time barred. He submits that the time limit for passing the final order got expired on 31.1.2015 and since the final order was passed on 27.2.2015 the said order of assessment is barred by limitation and therefore the order is null and void- ab-initio.

The Ld. Departmental Representative supports the orders of the authorities below.

We have heard the rival contentions and perused the orders of the authorities below. From the final assessment order we could see that DRP had issued directions by its order dated 19.12.2014 and this order was received by the Assessing Officer on 20.3.2014. The provisions of sub-section (13) of Sec. 144C mandates that upon receipt of the directions issued under sub-sec (5) by DRP, the Assessing Officer shall inconformity with the directions, complete the assessment within one month from the end of the month in which such directions are received by him. Apparently, in this case, the Assessing Officer having received the directions on 23.12.2014, he should have completed the final assessment within one month from the end of the month in which he received the order i.e. by 31.1.2015. However, the final assessment order was passed on 27.2.2015 making the assessment beyond the stipulated period. Therefore, since the final assessment made was barred by limitation, the order passed is null and void. Thus we quash the assessment order dated 27.2.2015 passed u/s. 143(3) r.w.s. 144C(13) of the Act. Since the assessment order is quashed on limitation, we are not going into the merits of addition/disallowance made in the assessment order since it is only an academic exercise.

In the result, the appeal filed by the assessee is allowed.