United Spirits Limited Vs DCIT (Karnataka High Court)
United Spirits Limited, had filed returns for Assessment Years 2013–14 and 2014–15 and was subjected to transfer pricing (TP) adjustments under Section 92CA of the Income-tax Act due to its international transactions. Draft assessment orders and final assessment orders were passed after directions from the Dispute Resolution Panel, resulting in substantial additions to income. The assessee challenged these orders before the Income Tax Appellate Tribunal (ITAT), which partly allowed the appeals and remitted certain issues to the authorities for fresh consideration. Following the remand, the tax authorities issued notices seeking additional documents and continued proceedings. The assessee contended that the limitation period for passing a fresh order pursuant to the Tribunal’s remand expired on 31 March 2024 under Section 153(3) of the Act, as the Tribunal’s order had been received during financial year 2022–23, and therefore the authorities lacked jurisdiction to continue proceedings thereafter. However, the Revenue argued that the limitation extended until 31 March 2025 under Sections 153(4) or 153(5), claiming that the remand effectively revived the transfer pricing reference. The High Court rejected the Revenue’s interpretation and held that a remand by the Tribunal does not constitute a fresh reference under Section 92CA(1) and therefore does not attract the extended limitation under Section 153(4). The Court ruled that the proceedings required fresh adjudication and were governed by Section 153(3), under which the limitation expired on 31 March 2024. Consequently, any continuation of proceedings beyond that date was without jurisdiction. The Court quashed the communications dated 18 June 2024 and directed the authorities to refund the excess tax paid by the assessee with applicable statutory interest within twelve weeks.
