ITAT Kolkata Quashes Assessment Order as It Was Served After Limitation Deadline

Versuni India Home Solutions Ltd. Vs DCIT (ITAT Kolkata)

The assessee filed an appeal against the order of the DC/ACIT TP-2, Kolkata, dated 11 July 2024 for Assessment Year 2020-21. During the hearing, the assessee pressed a ground challenging the validity of the assessment order passed under Section 143(3) read with Section 144C(13) of the Income-tax Act, contending that the order, though dated 31 July 2024, was served on the assessee only on 21 August 2024 and was therefore barred by limitation.

The assessee outlined the sequence of assessment proceedings. The Transfer Pricing Officer passed an order under Section 92CA(3) on 21 July 2023, followed by a draft assessment order under Section 144C on 27 September 2023. The assessee filed objections before the Dispute Resolution Panel (DRP) on 25 October 2023. The DRP issued directions under Section 144C(5) on 27 June 2024, and the TPO passed an order giving effect to those directions on 11 July 2024. Although the final assessment order was dated 31 July 2024, it was served on the assessee by email only on 21 August 2024.

The assessee argued that since the DRP directions were issued on 27 June 2024, the Assessing Officer was required under Section 144C(13) to complete the final assessment order within one month from the end of that month, i.e., by 31 July 2024. According to the assessee, the order was not effectively passed within the prescribed period because it was first served on 21 August 2024. The assessee further pointed out that the order had been passed manually rather than through the Income Tax Business Application (ITBA), and that the order and intimation were uploaded only after the expiry of the limitation period.