2019 (1) TMI 1898 - AT - Income Tax

Validity of assessment order passed u/s 143(3) - order made beyond the time limit specified under section 153(1) - as prayed that the said assessment order being time barred ought to be held as bad in law, liable to be quashed - AO made reference under section 92CA(1) to the Transfer Pricing Officer (TPO), who passed an order dated 08.10.2012 proposing no adjustment to the value of international transactions declared by assessee - whether the final assessment order passed in the case of assessee is time barred or has been passed within time available to the Assessing Officer? - HELD THAT - In case reference is made under section 92CA(1) of the Act, then the Assessing Officer is empowered to pass order under section 143(3) r.w.s. 92CA(3) of the Act within period of three years i.e. upto 31.03.2013 for the captioned assessment year. In the facts of case, where no addition was proposed by the TPO under section 92CA(3) of the Act and since there was reference made to the TPO, assessment order had to be passed within extended period of 12 months i.e. ending by 31.03.2013. However, the assessment order has been passed on 17.06.2013, hence the same is time barred. We find no merit in the objections raised by Revenue that since draft assessment order was passed on 28.03.2013, there is nothing prejudicial to the interest of assessee. It is not draft assessment order but the final assessment order, which completes the proceedings against the assessee and there is no merit in the objections so raised. It may also be pointed out that the Assessing Officer in all fairness has in the letter dated 24.10.2018 accepted that the time barring date to pass assessment order was 31.03.2013. Since the Assessing Officer has failed to do so, we hold that final assessment order passed on 17.06.2013 is both null and void in law. Consequently, the assessment made in the case of assessee is directed to be set aside. The jurisdictional issue raised vide ground of objection No.1 is thus, allowed.

Summary

Issues Involved:
1. Jurisdiction of Assessing Officer in passing assessment order beyond the time limit specified under section 153(1) of the Income-tax Act, 1961.

Analysis:
The judgment pertains to an appeal filed by the Revenue against the order of CIT(A)-13, Pune, related to the assessment year 2009-10 under section 143(3) of the Income-tax Act, 1961. The appeal and Cross Objections by the assessee were heard together. The Cross Objections, filed after a delay of 148 days, were allowed after the assessee provided reasons for the delay. The issue raised in the Cross Objections challenged the jurisdiction of the Assessing Officer in passing the assessment order beyond the specified time limit.

The key contention was whether the final assessment order passed on 17.06.2013 was time-barred or within the time available to the Assessing Officer. The Assessing Officer had made a reference to the Transfer Pricing Officer (TPO) under section 92CA(1) of the Act, and the TPO did not propose any upward adjustment to the international transactions. The judgment analyzed the provisions of sections 153 and 144C of the Act to determine the time limit for assessment completion and the procedure when a reference is made to the TPO.

The judgment highlighted that if no transfer pricing adjustment was made, the assessment order had to be passed within the extended period of 12 months, ending by 31.03.2013. However, the final assessment order was passed on 17.06.2013, rendering it time-barred. The Assessing Officer's argument that the draft assessment order was passed on time was rejected, emphasizing that the final assessment order is what completes the proceedings. As the final assessment order was beyond the time limit, it was deemed null and void in law, leading to the direction to set aside the assessment.

Consequently, the judgment dismissed the Revenue's appeal and allowed the Cross Objections of the assessee. By deciding the preliminary jurisdictional issue in favor of the assessee, all other grounds of appeal raised by the Revenue were deemed academic. The judgment was pronounced on January 25, 2019, by the Appellate Tribunal ITAT Pune, with specific judges mentioned for the case.