Assessee is Concentrix Catalyst Technologies Private Limited.
The assessee is engaged in providing IT consulting and mobile technology solutions, including cloud-based software services.
Assessee's Contentions -
The assessee contended that the final assessment order for AY 2020-21 was barred by limitation under the first proviso to section 153(1) read with section 153(4). It was submitted that the undisputed last date for passing the assessment order was 30.09.2023, beyond which the Assessing Officer (‘AO’) had no authority to complete the assessment.
While the draft assessment order was issued on 29.09.2023 u/s 143(3) read with section 144C, and the directions of the DRP were issued on 25.06.2024 u/s 144C(5), the assessee argued that these subsequent steps could not extend the statutory time limit prescribed u/s 153. According to the assessee, the limitation period stood exhausted on 30.09.2023 itself.
Placing reliance on settled judicial precedents, the assessee submitted that the final assessment order passed on 29.07.2024 was clearly time-barred and without jurisdiction.
Revenue's Contentions -
The Revenue contended that the final assessment order for AY 2020-21 was passed within the permissible time limit by correctly invoking the section 144C(13). It was argued that this provision specifically authorises the AO to pass the final assessment order within one month from the end of the month in which the directions of the Dispute Resolution Panel (‘DRP’) are received.
In the present case, the DRP issued its directions u/s 144C(5) on 25.06.2024. Accordingly, u/s 144C(13), the time limit for passing the final assessment order stood extended up to 31.07.2024, irrespective of the general limitation period prescribed u/s 153(1) read with section 153(4).
On this basis, the Revenue submitted that the final assessment order dated 29.07.2024 was passed well within the extended statutory time limit. Therefore, it was argued that the order was valid in law and could not be regarded as barred by limitation.
ITAT's Judgement -
The Hyderabad ITAT held that the final assessment order for AY 2020-21 was barred by limitation, as the undisputed time limit prescribed u/s 153(1) read with section 153(4) had expired on 30.09.2023. The Tribunal observed that once the statutory limitation period had lapsed, the AO no longer had jurisdiction to pass a valid assessment order.
The Tribunal further ruled that the extended time limit contemplated u/s 144C(13) could not override or revive the limitation period after it had already expired u/s 153. According to the ITAT, the mechanism u/s 144C operates within the framework of section 153 and cannot be used to circumvent the mandatory time limits prescribed therein.
Accordingly, since the final assessment order was passed on 29.07.2024, the Hyderabad ITAT quashed the same as being time-barred.
The Delhi ITAT held that the final assessment order, having been passed beyond the limitation period prescribed u/s 153(1) read with section 153(4), was time-barred and therefore liable to be quashed.
