Case Law Details
Nomura Rresearch Institute Financial Technologies India Pvt. Ltd Vs Union of India (Calcutta High Court)
Summary : The Court held that the order dated 9 December 2025 passed by the Assessing Officer giving effect to the appellate order for AY 2017-18 was barred by limitation under Section 153(5) of the Income Tax Act and was therefore void. The Commissioner of Income Tax (Appeals) had allowed the assessee’s appeal on 16 August 2022, and the order was received by the Commissioner on 31 August 2022. Consequently, the Assessing Officer was statutorily required to pass the giving effect order by 30 November 2022. Since the department failed to do so and no extension was sought under the proviso to Section 153(5), the subsequent order passed after more than three years was held to be a nullity. Rejecting the plea of administrative restructuring as justification for delay, the Court quashed the impugned order and directed refund of ₹96,69,710 along with interest under Section 244A from 1 December 2022 until actual payment.
Core Issue. The principal issue before the High Court was whether the order dated 09.12.2025 passed by the Assessing Officer giving effect to the CIT(A)’s appellate order dated 16.08.2022 was barred by limitation under section 153(5) of the Income-tax Act and therefore void. A consequential issue was whether the assessee was entitled to refund of the tax retained by the department together with interest under section 244A.
Facts. The assessee’s appeal for AY 2017-18 was allowed in full by the CIT(A) vide order dated 16.08.2022 passed under section 250. The appellate order was admittedly received by the Commissioner on 31.08.2022. Under section 153(5), the Assessing Officer was required to give effect to the appellate order within three months from the end of the month in which the order was received, meaning the time limit expired on 30.11.2022. However, the Assessing Officer passed the order giving effect to the appellate order only on 09.12.2025, more than three years after expiry of the statutory limitation period. No application seeking extension of time under the proviso to section 153(5) had been made before the expiry of the prescribed period. Based on the delayed giving-effect order, the department continued to retain taxes amounting to ₹96,69,710.
Department’s Stand. The Revenue attempted to justify the delay by contending that there had been administrative restructuring and reorganization of charges within the department, resulting in delay in passing the giving-effect order.
High Court Findings. The Court noted that the material facts were undisputed. The appellate order had been received on 31.08.2022, and the statutory deadline for passing the giving-effect order expired on 30.11.2022. The impugned order dated 09.12.2025 was therefore passed far beyond the limitation prescribed under section 153(5).
The Court held that the time limit prescribed under section 153(5) is mandatory. Since no extension had been sought under the proviso before expiry of the limitation period, the department lost the authority to pass a giving-effect order thereafter. The Court rejected the plea of administrative restructuring and held that internal administrative difficulties could not override a statutory limitation period.
The Court further held that failure to pass the giving-effect order within the prescribed period resulted in the appellate order attaining finality and the department could not subsequently seek to give effect to it by passing a belated order. Consequently, the impugned giving-effect order was held to be without jurisdiction, non est in law and a nullity.
Refund and Interest. Having held the giving-effect order to be void, the Court observed that refund was the natural consequence. It held that the department could not unjustly enrich itself by retaining the assessee’s money after the appellate order had attained finality. Accordingly, the Court directed refund of ₹96,69,710 together with statutory interest under section 244A from 01.12.2022 till the date of actual payment.
Held. The writ petition was allowed. The order dated 09.12.2025 giving effect to the CIT(A)’s order for AY 2017-18 was quashed as barred by limitation under section 153(5). All consequential proceedings were also quashed. The Revenue was directed to refund ₹96,69,710 along with interest under section 244A from 01.12.2022 until the date of actual payment, within two months.
Legal Principle. The period prescribed under section 153(5) for giving effect to an appellate order is mandatory. If the Assessing Officer fails to pass the giving-effect order within the prescribed period and no extension is obtained under the proviso, the appellate order attains finality and any subsequent giving-effect order is void and without jurisdiction. The department cannot retain tax on the basis of such an invalid order and must refund the amount along with statutory interest under section 244A.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
The Court: The core issue in this writ petition is whether the order dated 9th December, 2025 passed by the Assistant Commissioner of Income Tax, circle 4(1) Kolkata giving effect to the order of the Commissioner of Income Tax (Appeals) dated 16th August, 2022 for the assessment year 2017-18 is barred by limitation under section 153(5) of the Income Tax Act and consequently liable to be quashed.
It is submitted by the petitioner that the Commissioner of Income Tax (Appeals) passed an order under section 250 of the said act on 16th August, 2022 where by petitioner’s appeal for the assessment year in question was allowed in full.
It is mandated that as per section 153(5) of the said Act, the Assessing Officer shall give effect to the order passed under section 250 within 3 months from the end of the months in which such order is received by the Principle Commissioner or Commissioner
The order of the Commissioner of Income Tax (Appeals) has been received by the Principle Commissioner of Income Tax (Appeals) on 31st August, 2022 the statutory period to pass giving effect order expired on 30th November, 2022. The impugned order dated 9th December, 2025 has passed after a delay of over 3 years and is, therefore, non est in law without jurisdiction. It is well settled that the period prescribed under section 153(5) is mandatory and an order passed beyond the said period is a nullity.
Due to illegal retention of tax of the Income Tax Department the petitioner is entitled to refund of Rs. 96,69,710/- along with statutory interest under section 244A of the said Act.
Despite there being a specific direction upon the respondent authorities to obtain instruction from the concerned Assessing Officer with regard to the issue involved in the instant case, learned counsel for the respondent is unable to produce the same.
It is submitted by the respondents that delay occurred due to administrative restructuring of charges. However, no application seeking extension of time under the proviso to Section 153(5) has been filed before the expiry of the prescribed period.
After careful consideration of this case and upon perusal of the materials on record this Court finds that the facts are not in dispute. The order of the Commissioner of Income Tax (Appeals) 16th August, 2022 has been given effect to beyond the statutory period as prescribed under the statue.
The judgment relied upon by the petitioner which has been recorded in the earlier order dated 14th May, 2026 squarely applies to the facts of this case. The failure to pass the giving effect order within the prescribed period, results in the appellate order attaining finality and the department cannot subsequently seek to give effect to.
This Court is of the view of the impugned order dated is nullity and is liable to be quashed and set aside.
Once the order is held to be a nullity the natural consequence is that the petitioner is entitled to refund of taxes paid along with statutory interest
The department cannot be permitted to unjustly enrich itself by retaining the tax of the petitioner.
In view of the above the order dated 9th December, 2025 passed by the Assistant Commissioner of Income Tax Circle (1) for the assessment year 2017-18 is hereby quashed and set aside. All consequential proceedings arising there from shall also stand quashed.
The respondents are directed to refund to the petitioner the sum of Rs. 96,69,710/- for the assessment year 2017-18 and to pay an interest on the said amount under section 244A from 1st December, 2022 till the date of actual payment. The entire exercise of demand along with interest shall be completed within a period of 2 months.
With the above observations and direction the writ petition stands allowed and disposed of
Since no affidavits have been called for the allegation made in the writ petition are deemed to have been denied by the respondents.
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