Vivimed Labs Limited, in the second round of proceedings pursuant to the Tribunal's remand order dated 17.12.2020, received a fresh assessment order dated 13.12.2023 giving effect to the TP issue on advances of ₹252.05 million and ₹8.14 million to its overseas AEs. The AO treated these as interest-bearing working capital advances without examining the Tribunal's direction to verify if they were equity investments, and passed the order beyond the limitation expiring 31.12.2021 rendering both the draft and final assessment orders time-barred under Section 153.
Assessee’s Contentions | Revenue’s Contentions | Tribunal’s Judgment |
The giving-effect order dated 13.12.2023 is barred by limitation under Section 153, as the Tribunal's remand order was passed on 17.12.2020 and the limitation to pass the order under Section 153(5) or 153(3) expired on 31.03.2021 and 31.03.2022 respectively. | By way of amendments to the Finance Act 2026, the time limits under Sections 153 and 144C are mutually exclusive, and the draft assessment order dated 14.03.2023 was within time as amended. | Since the remand required only verification of whether the advances were working capital advances or equity investments — not a de novo assessment — the proviso to Section 153(3) applied, reckoning from 01.01.2021 and expiring 31.12.2021. Section 153(4)'s extended period and Section 144C's timelines did not apply to such giving-effect proceedings. |
Even the Draft Assessment Order dated 14.03.2023 is barred by limitation, relying on the Tribunal's own order dated 30.04.2026 in the assessee's case for AYs 2014-15, 2015-16 and 2018-19 on identical facts.
| The TPO order, draft order, DRP objections, DRP directions and final order were each passed within the respective time limits under Sections 153(3), 153(4) and 144C, and the extended period under Section 153(4) applied since the matter involved a TPO reference. | Since the impugned order was passed on 13.12.2023, both the draft order (14.03.2023) and the final order were held barred by limitation and set aside, following the assessee's own case for AYs 2014-15, 2015-16 and 2018-19. |
Ruling Summary -
Where a Tribunal's remand requires only verification of evidence, not a de novo assessment, the giving-effect order's limitation is governed by the proviso to Section 153(3) (12 months from receipt of the order), not Section 153(4)'s extended period or Section 144C's timelines.
A giving-effect order (and its underlying draft order) passed beyond this limitation is liable to be set aside as time-barred, consistent with the assessee's own case in earlier years.
