PCIT Vs Fiberhome India Private Limited (Delhi High Court)
The Revenue filed an appeal before the Delhi High Court challenging the order of the Income Tax Appellate Tribunal (ITAT) dated 13 March 2023. The ITAT had upheld the view of the Dispute Resolution Panel (DRP) that the assessment made under Section 144C of the Income Tax Act, 1961, was barred by limitation as it had not been completed within the statutory time prescribed.
The DRP issued its directions on 16 December 2021. The Assessing Officer (AO) passed the final assessment order on 26 March 2022. The Court noted that the assessment order had been passed beyond the period of 30 days prescribed under Section 144C(13) of the Act.
The High Court observed that the identical issue had already been decided in Louis Dreyfus Company India Private Limited vs. Deputy Commissioner of Income Tax Circle 13(1), Delhi & Ors. In that decision, the Court had explained that once objections are filed against a draft assessment order, the AO is required to complete the assessment strictly in conformity with the directions issued by the DRP. Section 144C(13) mandates that the assessment must be completed within one month from the end of the month in which the DRP’s directions are received.
