Centre For General Education Society Vs CIT Exemption (ITAT Delhi)
The Delhi ITAT quashed the final assessment order passed u/s 143(3) r.w.s. 144C(13) for AY 2020-21 as barred by limitation, holding that the outer time limit prescribed under section 153 continues to govern even DRP cases.
The Tribunal rejected the Revenue’s plea to defer adjudication merely because the issue of interplay between sections 144C and 153 is pending before the Supreme Court. It held that, in the absence of any stay, the Madras High Court judgment in Roca Bathroom Products (P) Ltd. remains binding and must be followed, consistent with the principle laid down in Godavari Devi Saraf.
Relying extensively on Roca Bathroom Products, the ITAT held that:
- DRP proceedings are part and continuation of assessment proceedings;
- Sections 144C and 153 are inter-dependent and not mutually exclusive;
- The non-obstante clause in section 144C(13) does not exclude the operation of section 153, but only mandates expeditious passing of final orders after DRP directions;
- If the final assessment order is passed beyond the outer limit under section 153 (including TP extension under section 153(4)), it is void ab initio.
On facts, the Tribunal found that although the outer limitation expired on 30.09.2023, the final order was passed on 26.07.2024, well beyond the statutory deadline. Accordingly, the assessment was quashed as time-barred.
Following the approach of the Hyderabad Benches, the ITAT kept all other issues on merits open, granting liberty to the parties to seek revival if the Supreme Court’s final verdict on the limitation issue warrants modification.
Thus, the appeal was allowed on the legal ground of limitation, and the impugned assessment order was set aside.
FULL TEXT OF THE ORDER OF ITAT DELHI
