Case Law Details
Microsft Corporation India Pvt Ltd Vs DCIT (ITAT Delhi)
Assessment Set Aside as Time-Barred Due to Delay Beyond Section 144C(13) Deadline; ITAT Cancels Assessment Because Final Order Was Passed After ITBA Upload-Based Limitation; Delhi ITAT Holds Physical Receipt of DRP Order Irrelevant for Limitation Calculation; Assessment Quashed Because AO Failed to Pass Final Order Within One-Month Statutory Period.
The Income Tax Appellate Tribunal (ITAT) Delhi set aside the assessment order passed against Microsoft Corporation India Pvt. Ltd. after holding that the final assessment was barred by limitation under Section 144C(13) of the Income Tax Act.
The assessee challenged the assessment order dated 06.08.2024 passed under Sections 143(3), 144C(13), and 144B of the Act pursuant to the directions issued by the Dispute Resolution Panel (DRP). The assessee filed additional grounds contending that the assessment order was time-barred under Sections 153 and 144C(13). The Tribunal admitted the additional grounds as they involved legal issues arising from facts already available on record.
During the hearing, the assessee did not press the ground relating to Section 153. However, with respect to limitation under Section 144C(13), the assessee argued that the DRP directions were issued and uploaded on the ITBA portal on 28.06.2024, and the final assessment order passed on 06.08.2024 exceeded the statutory period of one month from the end of the month in which the DRP directions were issued. The assessee relied on undisputed dates including the DRP directions dated 28.06.2024, DIN generation and upload on the same date, and the final assessment order dated 06.08.2024.
The Revenue submitted that the DRP order was manually received by the Assessing Officer only on 01.07.2024 and therefore the assessment order was within limitation. The Tribunal rejected this contention, observing that the DIN could only be generated once the document was uploaded on the ITBA portal and that the upload date was 28.06.2024.
The Tribunal relied on the Delhi High Court judgment in Sumanjeet Agarwal Vs. ITO reported in 449 ITR 517, which held that the date of uploading an order on the ITBA portal should be treated as the relevant date under the Act. The Tribunal also referred to the Delhi High Court ruling in the assessee’s own case, where a similar assessment order had been held time-barred because the limitation period had to be calculated from the date of upload on the ITBA portal and not from physical receipt of the order.
The Tribunal held that the statutory time limit expired on 31.07.2024 and therefore the assessment order dated 06.08.2024 was barred by limitation. Accordingly, the assessment was quashed and the remaining grounds were left open as academic. The appeal of the assessee was partly allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. The Assessee Microsoft Corporation India Pvt. Ltd (hereinafter referred to as ‘assessee) by filing the present appeal sought to set aside the impugned assessment order dated 06.08.2024 passed by the Assessing Officer (AO) u/s 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (for short ‘the Act’) inconsonance with the order passed by the Dispute Resolution Panel (DRP)-1, New Delhi dated 10.05.2025 u/s 144C(5).
2. We find that the assessee had filed additional grounds of appeal as under:-
“1A. Impugned Order is barred by limitation and therefore is null and void, as the same has been passed beyond the time limit prescribed under section 153 of the Act.
1B . Impugned Order is barred by limitation and therefore is null and void, as the same has been passed beyond the time limit prescribed under section 144C(13) of the Act.”
3. These additional grounds go to the root of the matter and being legal issue and all facts relevant for its adjudication are already on record, hence, we proceed to admit these additional grounds and take up the same for adjudication first.
4. At the time of hearing, the ld AR submitted that additional ground 1A is not pressed by the assessee. The same is reckoned as a statement made from the Bar and accordingly additional ground 1A is hereby dismissed as not pressed.
5. With regard to additional Ground 1B, the ld AR submitted that the DRP directions u/s 144C(5) of the Act was issued on 28.06.2024 and DIN was generated on the very same day, which is evident from page 1 of the paper book. He submitted that the DRP directions were uploaded in the ITBA portal on 28.06.2024. The final assessment order pursuant to the directions of ld DRP was passed u/s 143(3) r.w.s 144C(13) of the Act on 06.08.2024, which is beyond the period of 1 month from the end of the month in which the DRP directions were issued. The following facts are undisputed and indisputable:-
A. Date of draft assessment order-29.09.2023.
B. Date of DRP directions under section 144C(5) of the Act – 28.06.2024.
C. Date of generation of DIN for issuing DRP directions and uploading the DRP directions in the ITBA portal – 28.06.2024.
D. Date of order giving effect to DRP passed by the ld TPO – 26.07.2024.
E. Date of final assessment order passed by the ld AO u/s 143(3) r.w.s. 144C(13) of the Act – 06.08.2024.
6. The Learned DR filed factual report from the assessing officer stating that the ld DRP’s order was received manually by the ld AO only on 01.07.2024 and hence the assessment framed on 06.08.2024 is well within time. We find that a DIN could be generated only when the document is uploaded. Admittedly DIN was generated for DRP directions on 28.06.2024 which is evident from page 1 of the paper book which is reproduced here under:-
7. The Hon’ble Jurisdictional Delhi High Court in the case of Sumanjeet Agarwal Vs. ITO reported in 449 ITR 517 (Del) had categorically held that the date of uploading of the order in the ITBA portal shall be reckoned as the due date for the purpose of all sections of the Act.
8. The time limit provided by the statute to the ld AO to pass the final assessment order in terms of section 144C(13) of the Act expired on 31.07.2024 and hence the final assessment framed by the assessing officer on 06.08.2024 would be barred by limitation. This issue is no longer res integra in way of the decision of Hon’ble Jurisdictional Delhi High Court in Assessee’s own case in ITA No. 70/2026 dated 30.01.2026. The said order is reproduced hereunder:-
“1. By way of present appeal, the order dated 28.02.2024 passed by the Income Tax Appellate Tribunal Delhi Bench “I”, New Delhi (hereinafter referred to as „the Tribunal’) has been assailed.
2. By way of impugned order, the Tribunal held that the assessment order dated 30.06.2022 passed by the Assessing Officer (hereinafter referred to as „AO’) was barred by limitation.
3. The facts appertain for the present appeal are precise- the Draft Resolution Plan (hereinafter referred to as „DRP’) prepared by the Transfer Pricing Officer was uploaded on Income Tax Business Application (hereinafter referred to as „ITBA‟) portal on 07.04.2022, which according to the AO was received by him on 02.05.2022 in physical form. He, thus, This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 02/02/2026 at 20:42:23 passed the Assessment Order on 30.06.2022.
4. The Tribunal has held that it ought to have been passed within a period of 30 days of the end of the month in which the order was passed by the DRP and uploaded on ITBA portal i.e. on 07.04.2022 and accordingly, the order ought to have been passed by 31.05.2022. The Tribunal has held that the Assessment Order is barred by limitation.
5. On the issue in hands, there is a direct judgment passed by this Court in ITA 304/2025, Commissioner of Income Tax International Taxation-2, New Delhi v. Hyundai Rotem Company (decided on 29.10.2025) against the Department.
6. In light of aforesaid judgment, the appeal is dismissed.
7. All pending applications stand disposed of.”
9. The additional Ground 1B raised by the Assessee is hereby allowed and entire assessment is quashed as barred by limitation. Since the entire assessment is quashed, the adjudication of other grounds raised by the Assessee would be academic in nature and they are left open.
10. In the result, the appeal of the Assessee is partly allowed.
Order pronounced in the open court on 24/04/2026.
Author Bio
