2022 (12) TMI 1222 - AT - Income Tax

Assessment u/s. 144C(13) - time limit for completion of the assessment order u/s. 144C(13) - DR submitted that the assessment order has been passed by the AO within the period of limitation as extended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) - since the entire proceedings before the DRP and thereafter were carried out during Covid-19 pandemic the relaxation allowed by the Special Act TOLA would apply to the assessment order passed in pursuant to the directions of the DRP? - HELD THAT - As decided in the case of Shell India Markets (P.) Ltd. 2022 (2) TMI 1149 - BOMBAY HIGH COURT concluded that the time limit for completion of the assessment order u/s. 144C(13) of the Act was upto 30.04.2021. The relaxation under TOLA would not be applicable to the assessment orders passed in consequence to the DRP directions received by the Assessing Officer on 20.03.2021. The assessment order passed on 30.09.2021 was time barred. Similar are the facts in the present case. Therefore, we have no hesitation in holding that the assessment order dated 30.09.2021 in the present case is barred by limitation and is without jurisdiction. The assessee succeeds on ground of the appeal.

Summary

Issues Involved:
1. Jurisdictional issue regarding the period of limitation for passing the assessment order under Section 144C(13) of the Income Tax Act, 1961.
2. Applicability of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) to the assessment order.

Issue-wise Detailed Analysis:

1. Jurisdictional Issue Regarding the Period of Limitation:
The primary issue raised by the appellant was the jurisdictional defect due to the assessment order being passed beyond the period of limitation specified under Section 144C(13) of the Income Tax Act, 1961. The appellant argued that the final assessment order should have been passed within one month from the end of the month in which the Dispute Resolution Panel (DRP) directions were received. In this case, the DRP directions were dated 18.03.2021, and the final assessment order was due by 30.04.2021. However, the order was passed on 30.09.2021, which was beyond the prescribed period, thus making it time-barred and without jurisdiction.

2. Applicability of TOLA to the Assessment Order:
The respondent defended the validity of the assessment order by contending that it was passed within the extended period of limitation as per TOLA. However, the appellant relied on the Bombay High Court's decision in Shell India Markets (P.) Ltd. vs. Additional/Joint/Deputy/Assistant CIT, which held that the relaxation of limitation under TOLA does not apply to assessment orders passed under Section 144C(13). The Tribunal examined the relevant provisions of Section 144C, the sequence of events, and the applicable notifications under TOLA. It was determined that the relaxation provided by TOLA was not applicable to the assessment order in question, as the time limit for completion of the assessment did not fall within the period specified by TOLA.

Comparative Analysis with Shell India Markets Case:
The Tribunal compared the dates and events in the present case with those in the Shell India Markets case. It was found that the DRP directions in the present case were received on 25.03.2021, and the final assessment order was due by 30.04.2021. However, the order was passed on 30.09.2021. The Tribunal referred to the Bombay High Court's interpretation of the relevant notifications under TOLA, concluding that the relaxation of limitation did not apply to assessment orders under Section 144C(13).

Conclusion:
The Tribunal held that the assessment order dated 30.09.2021 was barred by limitation and without jurisdiction. Consequently, the appellant succeeded on the jurisdictional issue, and the other grounds raised in the appeal became academic. The assessment order was quashed, and the appeal of the assessee was allowed. The decision was pronounced in the open court on 26th December 2022.