Western UP Tollway Limited Vs DCIT (ITAT Hyderabad)
DRP route no shield against limitation: ITAT Hyderabad quashes TP assessments as time-barred
Hyderabad ITAT in a consolidated order has quashed the final assessment orders passed u/s 143(3) r.w.s. 144C(13) & 144B as being barred by limitation.
The Tribunal first admitted the additional legal grounds, holding that a pure question of law arising from facts already on record can be raised at any stage, relying on NTPC Ltd. v. CIT (229 ITR 383). It rejected the Revenue’s objection that such grounds are confined only to cases of non-taxable income or denied deductions, clarifying that section 254 confers wide powers on the Tribunal to examine any legal issue impacting tax liability.
On merits, the ITAT held that the outer time-limit prescribed u/s 153(1) read with section 153(4) (where TP reference u/s 92CA is made) prevails even in cases governed by the DRP mechanism u/s 144C. Section 144C(13), despite its non-obstante clause, merely restricts the AO to pass the final order within one month of receipt of DRP directions and does not extend or override the statutory limitation under section 153.
For AY 2017-18, the normal limitation expired on 31-12-2019, which stood extended up to 31-12-2020 due to TP reference. Since the final assessment orders were passed only on 12-01-2022, they were clearly beyond limitation. The Tribunal also rejected the Revenue’s reliance on the Supreme Court’s COVID suo-motu extension orders, holding that such extensions apply only to judicial/quasi-judicial proceedings like appeals and not to original assessment proceedings by tax authorities.
Relying heavily on the binding judgments of the Madras High Court in CIT v. Roca Bathroom Products (P.) Ltd. (445 ITR 537) and the Bombay High Court in Shelf Drilling Ron Tappmeyer Ltd. v. ACIT (457 ITR 161), as well as its own earlier decisions, the Tribunal held that sections 144C & 153 are mutually inclusive, not mutually exclusive. Consequently, the impugned TP assessments were quashed as time-barred, without adjudicating the TP adjustments on merits
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
