PCIT 1 Vs Fiberhome India Private Limited (Delhi High Court)
The Delhi High Court considered the Revenue’s appeal challenging the Income Tax Appellate Tribunal (ITAT) order dated 13 March 2023, which had upheld the Dispute Resolution Panel (DRP)’s finding that the assessment framed under Section 144C of the Income Tax Act, 1961 was barred by the statutory limitation period. The Court also condoned the delay in filing and re-filing the appeal before considering the matter on merits.
Issue Before the Court
The dispute concerned whether the final assessment order passed by the Assessing Officer (AO) complied with the mandatory time limit prescribed under Section 144C(13). The DRP had issued its directions on 16 December 2021, but the final assessment order was passed only on 26 March 2022, beyond the statutory period of 30 days.
Court’s Observations
The High Court noted that the issue had already been decided in its earlier judgment in Louis Dreyfus Company India Private Limited vs. Deputy Commissioner of Income Tax Circle 13(1), Delhi & Ors. In that decision, the Court had held that once objections are filed before the DRP, the Assessing Officer cannot proceed until the DRP issues its directions.
The Court reiterated that Section 144C(13) mandates that, upon receiving the DRP’s directions, the Assessing Officer must complete the assessment in conformity with those directions within one month from the end of the month in which the directions are received, without granting any further opportunity of hearing to the assessee.
