“directions of the DRP”
The decision most relied on for directions of the DRP is Commissioner of Income Tax v. Roca Bathroom Products (P) ltd. (445 ITR 537), cited in 269 judgments on BharatTax.
Leading authorities on directions of the DRP
The time limit for the Assessing Officer to pass a final assessment order under Section 144C(13) following directions from the Dispute Resolution Panel is determined by the specific provisions of Section 153, particularly Section 153(2A).
Passing a final assessment order under Section 143(3) directly, without first issuing a draft assessment order under Section 144C(1) for an eligible assessee, constitutes a fundamental jurisdictional defect. This defect cannot be cured by a subsequent corrigendum, especially if issued beyond the prescribed period of limitation.
Failure to issue a draft assessment order under Section 144C(1) makes the final assessment order illegal and beyond jurisdiction. Non-compliance with Dispute Resolution Panel (DRP) directions renders the final assessment order bad in law.
A change in depreciation policy impacts an entity's profitability, which is a key factor in assessing its suitability as a comparable company for transfer pricing analysis.
The limitation period for passing an assessment order under Section 153 of the Income Tax Act prevails over the specific time restriction for passing a final order under Section 144C(13).
An assessment order passed without giving effect to the binding directions of the Dispute Resolution Panel (DRP) under section 144C(10) within the stipulated time under section 144C(13) is null and void and must be set aside.
When determining the date of receipt of Directions from the Dispute Resolution Panel (DRP) by the Assessing Officer (AO) for the purpose of limitation, the date of uploading the DRP's directions is considered the date of receipt, even if the AO claims to have received it later through email. This interpretation prevents parties from exploiting a later date to their advantage and adheres to a singular, unambiguous approach to reckoning limitation.
The Assessing Officer must comply with the directions of the Dispute Resolution Panel (DRP) when passing final assessment orders, and failure to do so may warrant setting aside the assessment with a direction for compliance.
