Case Law Details
Aveva Solutions India LLP Vs ITO (ITAT Hyderabad)
DRP Route Cannot Extend Limitation: Assessment Beyond Section 153 Limit Struck Down by ITAT Hyderabad
Tribunal examined the core legal issue of limitation for passing assessment u/s 143(3) r.w.s. 144C(13) in a Transfer Pricing case. Assessee contended that once the assessment year is 2021-22, the statutory time limit u/s 153(1) (read with third proviso reducing the limit to 9 months) expired on 31.12.2022, & with reference to TPO u/s 92CA, the extended limitation u/s 153(4) permitted completion only up to 31.12.2023. Since the Final Assessment Order was passed on 18.10.2024, it was clearly beyond limitation. Assessee relied upon binding High Court rulings including Roca Bathroom Products (Madras HC) & Shelf Drilling Ron Tappmeyer Ltd. (Bombay HC) holding that limitation u/s 153 prevails over procedural timelines u/s 144C, & sec.144C(13) does not enlarge the statutory bar of limitation prescribed u/s 153.
Revenue argued that sec.144C begins with a non-obstante clause, constitutes a separate code for “eligible assessee”, & hence the AO is required only to pass the final order within 30 days from DRP directions, regardless of the outer limitation u/s 153. Revenue also submitted that the issue is pending consideration before a Larger Bench of Supreme Court due to conflicting views of coordinate benches.
Tribunal held that the law as settled by Madras HC & Bombay HC is binding in absence of any contrary jurisdictional High Court decision. It followed the ratio that sec.153 provides the outer time limit for completing assessment, while sec.144C(13) only restricts AO to pass final order within one month of DRP directions but does not override or extend the statutory limitation. Since the order dated 18.10.2024 was passed after the expiry of permissible period ending 31.12.2023, the assessment was barred by limitation & liable to be quashed.
Tribunal accordingly quashed the assessment order as time-barred but, similar to directions of Telangana High Court in Kotha Kantaiah, granted liberty to parties to seek revival of proceedings in case the pending Supreme Court judgment on the Shelf Drilling dispute alters the legal position. All other issues on merits were left open
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