AECOM India P. Ltd. Vs DCIT (ITAT Delhi)
Final Assessment Orders under DRP Route Quashed as Time-Barred: ITAT Delhi Applies Roca Bathroom Ratio Despite Pending SC Reference
The Delhi Bench of the ITAT held that final assessment orders passed under section 144C(13) must comply with the limitation prescribed under section 153, as both provisions are mutually inclusive. Relying on the Madras High Court decision in CIT v. Roca Bathroom Products (P.) Ltd., the Tribunal rejected the Revenue’s preliminary objection that adjudication should be deferred due to the pending Larger Bench reference before the Supreme Court in Shelf Drilling Ron Tappmeyer Ltd.
The Tribunal observed that the Roca Bathroom judgment is not stayed, and an interim restraint on citing Shelf Drilling does not nullify the ratio of Roca Bathroom. Following its own recent decision in Li & Fung (India) P. Ltd., the ITAT proceeded to decide the issue. On merits, it held that DRP proceedings are a continuation of assessment proceedings and that the overall time limit under section 153 governs the passing of the final assessment order, even in DRP cases.
Applying this principle, the Tribunal found that for AYs 2010-11 and 2011-12, the final assessment orders were passed beyond the permissible limitation period (31.03.2014 and 31.03.2015 respectively), rendering them without jurisdiction. Accordingly, the assessments were quashed, with liberty to revive the appeals if the Supreme Court ultimately reverses the Roca Bathroom view.
FULL TEXT OF THE ORDER OF DELHI
These two appeals by the assessee for AY 2010-11 & 2011-12 are taken up together as the assessee in all the above impugned assessment years have challenged validity of the assessment order on the ground of limitation as per the provisions of section 144C(13) r.w.s. 153 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). The assessee has raised this legal issue by way of additional ground of appeal vide separate applications of even date i.e. 20.11.2023 for each of the assessment year in appeal.
