Philip Morris Services India SARL Vs DCIT (ITAT Delhi)
Final Orders After DRP Beyond Section 153 Limit Quashed Despite Pending Supreme Court Reference
The assessee challenged the final assessment orders for AYs 2009-10 and 2010-11 as being time-barred, contending that even in DRP cases the outer limitation under section 153 governs the final order under section 144C(13). The Revenue argued that section 144C is a self-contained code and that, since the issue is pending before a larger Bench of the Supreme Court in the Shelf Drilling and Roca Bathroom matters, the Tribunal should defer adjudication.
Rejecting the preliminary objection, the Tribunal held that there is no stay on the Madras High Court judgment in Roca Bathroom Products Pvt. Ltd., and an interim restraint on citing the Bombay High Court judgment in Shelf Drilling does not nullify the ratio of other unstayed High Court decisions. Relying on settled law that an interim stay suspends only the operative part and not the precedent value of an unstayed judgment, the Tribunal proceeded to decide the issue.
On merits, following the detailed reasoning of the Madras High Court in Roca Bathroom, it held that sections 144C and 153 are inter-dependent and must be read together. The DRP mechanism is only a continuation of the assessment; the non-obstante clause in section 144C(13) merely shortens the time available to the AO after DRP directions and does not override the overall outer limitation under section 153. Therefore, the entire chain—draft order, objections, DRP directions and final order—must conclude within the section 153 outer time limit.
Applying the undisputed date chart, the Tribunal found that although the due date for the final orders was 31.12.2023, the AO actually passed them on 25.10.2024 and 18.10.2024, well beyond limitation. Consequently, the final assessment orders were held to be without jurisdiction and were quashed.
All other grounds were left open, and liberty was granted to either side to seek revival if the Supreme Court later takes a contrary view. The assessee’s appeals were accordingly allowed on the legal issue of limitation.
FULL TEXT OF THE ORDER OF ITAT DELHI
