2024 (1) TMI 150 - AT - Income Tax

Validity of TP order u/s 92CA(3) beyond the time limit prescribed u/s 92CA (3A) r.w.s. 153 - counting of 60 days for passing TPO order - HELD THAT - 60 days period as per the provisions of section 153(1) read with section 92C(3) expires on 30/03/2021 and therefore, the transfer pricing order should have been passed one day prior i.e.by 29/01/2021. In assessee's case it is further noticed that the TPO has actually passed the order on 30/01/2021. Therefore, relying on the decision in the case of Pfizer Healthcare India Pvt Ltd 2022 (4) TMI 808 - MADRAS HIGH COURT we are of the considered view that the impugned order passed by the TPO is barred by limitation and, therefore, liable to be quashed. Assessee appeal allowed.

Issues Involved:
1. Legality of the final assessment order u/s 143(3) r.w.s. 144C(13) and 144B.
2. Validity of the Transfer Pricing Officer (TPO) order u/s 92CA(3).
3. Jurisdiction of the Assessing Officer in passing the draft assessment order u/s 144C.
4. Time limitation for passing the final assessment order u/s 153.

Summary:

Issue 1: Legality of the Final Assessment Order
The assessee contended that the final assessment order dated 29/01/2022 was barred by limitation as per section 153(1) of the Income-tax Act, rendering it void-ab-initio, bad in law, and liable to be quashed.

Issue 2: Validity of the TPO Order
The assessee argued that the TPO's order dated 30/01/2021 was beyond the time limit prescribed u/s 92CA(3A) r.w.s. 153, making the transfer pricing order illegal, null, and void. The Ld.AR provided a detailed chronology of dates to support this claim, emphasizing that the TPO order should have been passed by 29/01/2021.

Issue 3: Jurisdiction of the AO in Draft Assessment Order
The assessee asserted that since the TPO order was illegal and void due to being barred by limitation, the draft assessment order dated 30/03/2021 passed by the AO u/s 144C was without jurisdiction, making all subsequent proceedings illegal and bad in law.

Issue 4: Time Limitation for Final Assessment Order
The assessee claimed that the final assessment order dated 29/01/2022 was also barred by limitation as prescribed under section 153, thus making it illegal, null, and void.

Tribunal's Findings:
1. Admission of Additional Grounds: The Tribunal admitted the additional grounds raised by the assessee, citing that they were purely legal and did not require investigation of new facts, relying on the judgment of the Hon'ble Apex Court in National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC).

2. Legality of the TPO Order: The Tribunal, after considering the submissions and relevant case laws, including Pfizer Healthcare India Pvt Ltd vs JCIT (2021) and DSV Air & Sea Pvt Ltd vs ADIT (2023), held that the TPO order dated 30/01/2021 was indeed passed beyond the prescribed time limit and thus was barred by limitation. Consequently, the TPO order was quashed.

3. Impact on Subsequent Proceedings: Given the quashing of the TPO order, the Tribunal noted that the grounds raised on merits became academic and did not warrant adjudication.

Conclusion:
The Tribunal allowed the appeal of the assessee, quashing the TPO order for being barred by limitation, which rendered the final assessment order and subsequent proceedings void. The decision was pronounced in the open court on 27/10/2023.

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