RAPISCAN SYSTEMS INC,UNITED STATES vs. ADIT, (INTERNATIONAL TAXATION)-2, HYDERABAD

The common ques�on that arises for our considera�on in these two appeals is whether the final assessment orders that were passed on 29/8/2022 for the assessment years 2018-19 and 2019-20 pursuant to the direc�ons that were issued and uploaded on 30/6/2022 by the Ld. Dispute Resolu�on Panel (DRP), are barred by limita�on under sec�on 144C (13) of the Income Tax Act, 1961 (for short “the Act”). Relevant facts are that the learned DRP issued direc�ons in the case of the assessee for the assessment years 2018-19 and 2019-20 on 30/6/2022 and as is evidenced by the le�er dated 30/1/2024 issued by the secretary, DRP-1, Bangalore said direc�ons were uploaded on ITBA portal on 30/6/2022 itself and a physical copy of direc�ons was also sent to the learned Assessing Officer on 30/6/2022 through speed post. Learned Assessing Officer, however, passed final assessment order under sec�on 143(3) read with sec�on 144C (13) of the Act on 29/8/2022.

By way of addi�onal grounds assessee challenged the same. Learned DR placed reliance on the email dated 7/5/2022 to the effect that the direc�ons of the learned DRP under sec�on 144 C(5) of the Act were communicated in the month of May 2022, and submi�ed that from the end of the month in which the direc�ons were communicated the impugned assessment orders are within 30 days and therefore, regardless of the date of passing of the direc�ons, the impugned assessment orders are within �me. 4. Ld. AR placed reliance on the decision of the Hon’ble Delhi in the case of Louis Dreyfus company India private Ltd vs. DCIT [2024] 159 taxmann.com 244 (Delhi) and submi�ed that the uploading of the learned DRP’s direc�ons on the ITBA portal would be considered as the receipt of the direc�ons by the learned Assessing Officer, and therefore, the �me limit for passing the final order should be within 30 days from the end of the month in which the direc�ons were uploaded on the ITBA portal. Since the date of direc�ons in these two appeals happens to be 30/6/2022, 30 days from the end of the month in which the direc�ons for uploaded to the ITBA portal would expire by the end of July 2022, and therefore, the assessment orders that were passed on 29/8/2022.

We have gone through the record in the light of the submissions made on either side. In view of the le�er dated 30/1/2024 wri�en by the Secretary, DRP-1, Bangalore to the assessee, it is established that the direc�ons dated 30/6/2022 issued by the learned DRP are uploaded on ITBA portal on 30/6/2022 itself, and as held by the Hon’ble Delhi the date of uploading of the direc�ons on ITBA portal should be taken as the date of receipt of such direc�ons by the learned Assessing Officer. For the sake of completeness we extract hereunder the observa�ons of the Hon’ble Delhi High Court in the case of Louis Dreyfus (supra) hereunder,- 20. Undisputedly, the direc�ve of the DRP came to be uploaded on the ITBA portal on 24 June 2022. It is addi�onally stated to have been dispatched through Speed Post to the third respondent (TPO) and the fourth respondent (Addi�onal/Joint/Deputy/Assistant Commissioner of Income Tax, Na�onal Faceless Assessment Centre, New Delhi) on 27 June 2022. It is therea�er that the TPO appears to have passed the order dated 25 July 2022.

We, however note that paragraph 4(2) of the E-as, 2019 makes the following salient provisions:- "4(2). All communica�on among the assessment unit, review unit, verifica�on unit or technical unit or with the assesse or any other person with respect to the informa�on 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 Na�onal e-assessment Centre."

It is thus manifest that as per the provisions of E-as, 2019, all orders, no�ces 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 direc�ve of the DRP on the ITBA portal would thus cons�tute valid and sufficient service and the period of limita�on as prescribed in Sec�on 144C(13) of the Act would be liable to be computed bearing that crucial date in mind. Once the aforesaid posi�on 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 �melines as incorporated in the aforenoted provisions. Accordingly, the writ pe��on is liable to be allowed and the impugned order of assessment and the consequen�al penalty proceedings are thus liable to be set aside on this short score alone.

This decision in the case of Louis Dreyfus (supra) was followed in the case of PCIT vs. M/s FIBERHOME India Pvt. Ltd in on the file of the Hon’ble Delhi High Court. These decisions are applicable to the facts of this case on all fours, and respec�ully following the same we hold that the assessment orders that were passed on 29/8/2022 are barred by limita�on. Since we answered the addi�onal ground quashing the assessment for the assessment year 2018-19 and 2019-20, all other issues have become academic. Grounds are answered accordingly.

In the result, appeals of the assessee are allowed. Order pronounced in the open court on this the day of 23rd July, 2024. Sd/- Sd/- (MANJUNATHA G.) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 23/07/2024 Pvv/SPS Copy forwarded: 1. RAPISCAN Systems Inc C/o ERNST & YOUNG LLP, The SKYVIEW 10, 18th Floor, Zone Z, Survey No.83/1 Raidurgam, Hyderabad 500032 2. ADIT(Interna�onal Taxa�on)-2 Aayakar Bhavan, Basheerbagh, Hyderabad 3. CIT(DRP)-1 Kendriya Sadan, 4th Floor, C Wing, Bengaluru 560034 4. Director of Income Tax (IT&TP) Hyderabad 5. DR, ITAT Benches, Hyderabad