Envestnet Asset Management (India) Private Limited Vs ACIT (ITAT Cochin)
Income Tax Appellate Tribunal (ITAT), Cochin Bench, has quashed a transfer pricing adjustment order against Envestnet Asset Management (India) Private Limited, ruling that the assessment order passed by the Assessing Officer (AO) was barred by limitation. The decision, pronounced on December 12, 2014, highlights the mandatory nature of time limits prescribed under the Income-tax Act, particularly Section 144C(13), and emphasizes the department’s responsibility to maintain proper records.
Envestnet Asset Management had filed an appeal challenging a transfer pricing adjustment made by the AO, which was in conformity with the directions of the Dispute Resolution Panel (DRP), Bangalore. The core of the assessee’s argument was that the assessment order, dated March 28, 2014, was passed beyond the statutory time limit.
Assessee’s Argument on Limitation:
Shri Nageswar Rao, the learned Counsel for Envestnet, contended that as per Section 144C(13) of the Income-tax Act, the AO is mandated to pass an assessment order in conformity with the DRP’s directions within one month from the end of the month in which such direction is received. In this case, the DRP’s direction was dated November 29, 2013. The assessee claimed to have received a copy of this direction on December 5, 2013. Therefore, the counsel argued, the assessment order should have been passed by January 31, 2014 (one month from the end of December 2013), making the March 28, 2014, order invalid.
