Section 144C of the Income Tax Act
Income-tax Act, 2025: s.275
Section 144C of the Income-tax Act, 1961 corresponds to section 275 (Reference to Dispute Resolution Panel) of the Income-tax Act, 2025.
Read section 275 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 144C is 21. In SB Gurbaksh Singh v. Union of India (2 SCC 181), cited in 318 of the 3,699 judgments on BharatTax that turn on this section.
Leading authorities on Section 144C
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).
If an issue has been decided by a competent court or bench, and that decision remains undisturbed by a higher court, subsequent appeals on the same issue can be dismissed as being covered by the earlier judgment, underscoring judicial discipline.
An Income-tax Tribunal, operating anywhere in the country, must respect and follow the law laid down by any High Court, even if it is a non-jurisdictional High Court, as long as there is no contrary decision from another High Court on that specific legal point. The law declared by such a High Court is considered the final law of the land for the Tribunal.
The Supreme Court has not reached a majority verdict on whether the time spent in Dispute Resolution Panel (DRP) proceedings under Section 144C should be included within the overall limitation period prescribed by Section 153(3). Consequently, the legal position on the interplay between Sections 144C and 153 remains unresolved at the Supreme Court level.
Revenue must demonstrate the existence of a Permanent Establishment (PE) of a foreign enterprise in India, including establishing that transactions underlying a Dependent Agent PE were not at arm's length. Income from the sale of goods is not taxable in India if title and risk in the goods pass outside India.
A statute must be read as a whole, construing every clause with reference to its context and other provisions, to determine the legislature's real intention and ensure a consistent enactment. This principle, known as "ex visceribus actus," helps avoid inconsistencies within the law.
The grant of special leave by the Supreme Court signifies that an issue is admitted for final adjudication, and the correctness of the High Court's judgment is under scrutiny. The order granting leave does not affirm the High Court's view nor declare law; consequently, the High Court judgment loses its finality.
The issue of shares and share premium is a capital account transaction, not an income-generating event, therefore Chapter X (Transfer Pricing) provisions are not attracted to deem notional or hypothetical income from such transactions.
An assessment order cannot be considered erroneous for want of an inquiry, thus restricting revision under Section 263, if the Assessing Officer applied their mind to the issue and had all relevant facts before them. Additionally, disallowed expenditures are not to be included as part of an asset's cost for tax purposes.
