APM Terminals India Private Limited Vs DCIT (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has nullified the assessment order for the assessment year 2017-18 against APM Terminals India Private Limited. The Tribunal’s decision, delivered on March 8, 2023, found the order to be time-barred, stemming from the Assessing Officer’s failure to comply with statutory deadlines for issuing the final assessment order after receiving directions from the Dispute Resolution Panel (DRP).
Chronology of the Case
The appeal initiated by APM Terminals India Private Limited contested the final assessment order dated February 28, 2022. This order was issued under Section 143(3) read with Section 144C(13) and Section 144B of the Income Tax Act, 1961. The primary contention advanced by Shri Poras Kaka, counsel for the assessee, was that the assessment order lacked validity due to its issuance beyond the prescribed period of limitation. Conversely, Ms. Samruddhi Dhananjay Hande, representing the Income Tax Department, maintained that the order was passed within the permissible timeframe.
The assessee presented a detailed sequence of events and associated timelines to support its argument:
- Transfer Pricing Order (Section 92CA(3) of the Act): This order was issued on January 20, 2021. The original due date for this order, October 31, 2020, had been extended to January 31, 2021, by Notification No. 93/2020, dated December 31, 2020. The actual issuance date fell within this extended period.
- Draft Assessment Order (Section 143(3) read with Section 144C of the Act): The draft order was issued on March 30, 2021, and received by the assessee on the same day. The initial due date of December 31, 2020, for such orders had undergone multiple extensions. These extensions included March 31, 2021 (via Taxation Act and Notification No. 93/2020), April 30, 2021 (CBDT Notification No. 10/2021), and further to June 30, 2021 (CBDT Notification No. 38/2021 and press release dated June 25, 2021). The draft order was thus issued within the then-applicable extended deadline.
- Filing of Dispute Resolution Panel (DRP) Objections (Section 144C(1) of the Act): The assessee filed its objections against the draft assessment order with the DRP on April 27, 2021. This action was taken within the extended due date of August 31, 2021, as stipulated by CBDT Circular No. 12/2021, dated June 25, 2021, which provided relief for objections due on or after June 1, 2021.
- Issuance of DRP Directions (Section 144C(5) of the Act): The DRP issued its directions on December 23, 2021, and these were simultaneously updated in the Income Tax Business Application (ITBA) system. Section 144C(12) of the Act mandates that no directions under sub-section (5) shall be issued after nine months from the end of the month in which the draft assessment order is forwarded to the eligible assessee. Given the draft order was forwarded in March 2021, the nine-month period concluded on December 31, 2021. The DRP’s directions were issued within this statutory timeframe.
- Final Assessment Order (Section 143(3) read with Section 144C and Section 144C(13) read with Section 144B of the Act): This is the order under contention. It was dated February 28, 2022, and digitally signed by the National Faceless Assessment Centre, with the assessee receiving it on March 2, 2022.
Assessee’s Core Argument on Limitation
