Section 144C is prospective in nature & is applicable from AY 2011-12

A.T. Kearney Ltd. Vs ADIT (ITAT Delhi)

The Income Tax Appellate Tribunal (herein after referred to as “ITAT”), Delhi Bench vide it’s Order dated 20.05.2021 have observed that the assessment completed under Section 144C(13)/143(3) of the Income Tax Act, 1961 (herein after referred to as “Act”) is barred by limitation as Section 144C of the Act is prospective in nature.

The facts of the case were that the the assessee herein challenged the validity of the impugned assessment order on the ground that the provisions of section 144C of the Act introduced by the Finance (No. 2) Act, 2009 with effect from April 1, 2009, has no application for the impugned assessment year. The Assessment Year in the said case was 2003-04.

The original assessment for the year under consideration in the Appeal before Hon’ble Tribunal was completed by the AO vide order dated March 28, 2006, framed under Section 143(3) of the Act. The said assessment order was assailed in appeal before the CIT(A) but without any success. The matter traveled up to the Tribunal and the Tribunal vide order dated August 31, 2009, set aside the assessment for denovo consideration by the AO. While giving effect to the order of the Hon’ble Tribunal, the AO has erroneously framed a draft assessment order following the provisions of section 144C(1) of the Act.

The Hon’ble Bench relied upon the Judgment of Hon’ble Madras High Court in the case of Vedanta Limited, Writ petition no. 1729/2011, wherein it was observed that since the provisions of section 144C of the Act has been introduced by the Finance (No. 2) Act, 2009 w.e.f. 01.04.2009, the said amendment is applicable from AY 2011-12 onwards.

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