Hitachi Astemo Haryana Private Limited Vs ACIT (ITAT Delhi)
Three-Month Limit Under Section 153(5) is Mandatory – Returned Income Deemed Accepted as AO Missed Section 153(5) Timeline
Delhi Tribunal allowed the appeal of Assessee by holding that the assessment order passed beyond limitation prescribed u/s 153(5) is invalid & liable to be quashed.
TPO in order dated 29.07.2021 proposed TP adjustments of ₹5.54 crore (manufacturing segment) & ₹5.92 crore (royalty payments). DRP granted relief on manufacturing but sustained royalty addition. AO passed final order u/s 143(3) r.w.s. 144C(13) & 144B on 30.03.2022, but failed to incorporate DRP’s directions. Assessee approached ITAT (ITA No.1005/Del/2022), which vide order dated 23.11.2023 quashed the defective assessment & remanded matter to AO with direction to pass order incorporating DRP’s directions.
Fresh Assessment & Dispute: Tribunal’s order was received by PCIT on 28.12.2023. As per section 153(5), AO was required to pass fresh order within 3 months i.e., by 31.03.2024. However, AO passed the order on 23.05.2024, computing a demand of ₹1.38 crore. Assessee contended the order was time-barred & hence invalid.
Department argued that since it was a remand by ITAT, limitation of section 153(5) should not apply, and AO was justified in passing order in May 2024.
