DCIT Vs Biesse India Pvt. Ltd. (Karnataka High Court)
Order Giving Effect Beyond 3-Month Limit Held Time-Barred – Karnataka HC Upholds Refund with 244A Interest
Assessee, engaged in manufacturing & trading of wood-working machinery, filed return for AY 2012-13. Assessment u/s 143(3) r.w.s. 144C(13) was completed on 31.01.2017, & demand notice u/s 156 was issued. On appeal, Tribunal by order dated 07.07.2017 directed recomputation of ALP by excluding five comparables. Assessee’s miscellaneous petition was rejected on 15.12.2017, & further appeal (ITA No. 851/2017) was dismissed by the High Court on 29.01.2021.
Subsequently, Assessee applied on 01.12.2022 for refund of ₹ 4.73 crore with interest u/s 244A(1)(b). Since no action was taken, it filed W.P. No. 16223/2023 seeking a mandamus for refund.
Department later passed an order giving effect to the Tribunal’s directions on 23.08.2023, but the Single Judge held it to be time-barred, directing refund with interest u/s 244A(1)(b) & 244A(1A).
Revenue’s Contention
- Citing Section 153(3)(ii) r.w.s. 153(9), it argued that for AY 2012-13, the limitation applicable is as it stood prior to the Finance Act 2016.
- Hence, there was no specific time limit for giving effect, & the order dated 23.08.2023 was valid.
Assessee’s Stand
- The assessment order was passed on 31.01.2017, i.e., after 1 June 2016.
- Therefore, post-amendment provisions apply, & as per Section 153(5), the order giving effect had to be passed within 3 months of receipt of Tribunal’s order.
- The order dated 23.08.2023, being far beyond this period, was time-barred.
Court’s Findings/ Decision
- Section 153(9) applies only to assessments made before 1 June 2016.
- Since the original assessment was made on 31.01.2017, the amended provision u/s 153(5) applies.
- Under s. 153(5), the AO must pass the order giving effect within 3 months from receipt of Tribunal’s order.
- The order giving effect dated 23.08.2023 was well beyond that period & hence invalid.
- The Single Judge rightly declared the order time-barred & directed refund with interest.
- The Division Bench dismissed the Department’s appeal, affirming that:
Finance Act 2016 provisions governed the case;
- Order giving effect passed beyond the prescribed 3 months is void;
- Assessee is entitled to refund ₹ 4.73 crore plus interest u/s 244A(1)(b) & 244A(1A).
Key Takeaway
