Etisalat Software Solutions Pvt. Ltd. Vs ACIT (ITAT Bangalore)
Summary: The assessee, Etisalat Software Solutions Private Limited, a subsidiary of Emirates, UAE, engaged in providing software-development services to its associated enterprises, challenged the assessment for AY 2017-18, under which the Assessing Officer determined total income at ₹45.80 crore against returned income of approximately ₹22.44 crore, principally due to a transfer-pricing adjustment of ₹23.36 crore. In an earlier round, the ITAT, by order dated 20 September 2022, partly decided the comparability issues and restored the issues relating to R Systems International Limited and Sasken Technologies Limited to the AO/TPO for fresh examination; the order was received by the Commissioner on 17 October 2022. The TPO subsequently passed an order on 30 September 2024, followed by the DRP directions and final assessment order dated 12 November 2025. The assessee raised an additional jurisdictional ground contending that the assessment was barred by limitation, which the Tribunal admitted as the issue went to the root of the appeal and arose from admitted facts. The Tribunal held that the earlier ITAT order had not set aside or cancelled the entire assessment, but had partly decided comparability issues and remitted specified issues for verification. It therefore considered the matter under Section 153(5) and its second proviso, linking the applicable limitation to Section 153(3), with the order required to be passed on or before 31 March 2024. Rejecting the Revenue’s contention that the additional 12-month extension under Section 153(4) was available, the Tribunal relied on the jurisdictional Karnataka High Court decision in United Spirits Ltd. v. DCIT and distinguished a fresh reference made by the AO to the TPO under Section 92CA from a matter remitted by the Tribunal to the AO/TPO. Since the TPO order was passed on 30 September 2024 and the final assessment order on 12 November 2025, the Tribunal held that the applicable limitation had expired on 31 March 2024, quashed the assessment and the consequential ₹23.36 crore transfer-pricing adjustment, and dismissed the remaining grounds as infructuous. The appeal filed by the assessee was partly allowed.
