2024 (2) TMI 52 - HC - Income Tax

Validity of TPO order u/s 92CA - Period of limitation - as argued Final Orders of Assessment were not framed by the respondents within the time frame as prescribed u/s 153(3) - time limit for compliances in terms of TOLA - HELD THAT - When the writ petition was initially heard by us on 12 April 2023, the solitary submission which appears to have been made at the behest of the respondents was of the period of limitation being liable to be computed as commencing from the date when the SLP was dismissed by the Supreme Court and consequently from 29 October 2020. We had on that occasion prima facie observed that the submission appeared to be wholly untenable since no stay operated in respect of the order of the ITAT dated 20 December 2018 and that the appeal preferred before this Court had come to be dismissed on the first date of hearing itself. The Court also observed that in light of the plain language of Section 153(3) of the Act, the period of limitation is liable to be computed from the date when the order is received by the concerned statutory authority. Undisputedly, and as we had noticed on that occasion, the CIT(Judicial) had received the order of the ITAT on 31 January 2019. The respondents have failed to address any submission which may compel us to doubt the prima facie opinion that came to be recorded by us on that date. The period prescribed u/s 153(3) of the Act would thus have to necessarily be computed from the date when the order of the ITAT was received by the respondents. Even if the benefits of TOLA were extended to the respondents, undisputedly, the order of assessment was liable to be framed lastly by 30 September 2021. The respondents have thus abjectly failed to pass an order in terms of the mandatory provisions comprised in Section 153 of the Act. The order of 13 February 2023 is thus liable to be set aside on this score alone. Adjustments of certain refunds against a perceived demand - HELD THAT - As respondents appear to have adjusted refunds payable against a perceived outstanding demand pertaining to AY 2011-12 on 20 May 2022 and 02 June 2022. The aforesaid adjustments have been made in ignorance of the fact that the demand for AY 2011-12, if any, ceased to exist on 20 December 2018 when the original order of assessment came to be set aside and the matter remanded for fresh adjudication by the ITAT. Thus, on 20 May 2022 and 02 June 2022, no demand for AY 2011-12 existed against which a refund could have been validly adjusted. In any case, and in light of what we have found above, a demand for AY 2011-12 could have been created only on or before 30 September 2021. Undisputedly, no valid demand stood raised against the petitioner prior to that date. We thus find ourselves unable to sustain the action of adjustment which is impugned in this writ petition.

Summary

Issues Involved:
1. Refund of Rs. 4,87,48,460/- for AY 2011-12.
2. Quashing of the Impugned Order dated 13.02.2023 as barred by limitation.
3. Adjustment of refunds pertaining to AYs 2008-09, 2009-10, and 2010-11 against a perceived demand for AY 2011-12.

Summary:

Issue 1: Refund of Rs. 4,87,48,460/- for AY 2011-12
The petitioner sought a writ of mandamus directing the respondents to issue a refund of Rs. 4,87,48,460/- along with interest under section 244A for AY 2011-12. The court noted that the adjustments made by the respondents against a perceived demand for AY 2011-12 were invalid as the original order of assessment was set aside by the ITAT on 20 December 2018, and no valid demand existed as of 20 May 2022 and 02 June 2022.

Issue 2: Quashing of the Impugned Order dated 13.02.2023 as barred by limitation
The court examined the timeline and found that the final assessment order dated 13 February 2023 was passed beyond the time prescribed under Section 153 of the Act. The respondents failed to frame the order within the extended period granted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [TOLA], which extended the deadline to 30 September 2021. Consequently, the court set aside the impugned order dated 13 February 2023.

Issue 3: Adjustment of refunds pertaining to AYs 2008-09, 2009-10, and 2010-11 against a perceived demand for AY 2011-12
The court found that the respondents adjusted refunds payable against a perceived outstanding demand for AY 2011-12 without any valid demand existing as of the adjustment dates (20 May 2022 and 02 June 2022). The court noted that any demand for AY 2011-12 should have been created on or before 30 September 2021, which was not done. Therefore, the court annulled the adjustments made for AYs 2008-09, 2009-10, and 2010-11.

Conclusion:
The court allowed both writ petitions, quashed the impugned order dated 13 February 2023, and directed the respondents to re-compute the refund payable to the petitioner along with statutory interest. The order of refund must consider the annulled adjustments for AYs 2008-09, 2009-10, and 2010-11 against the perceived demand for AY 2011-12. The respondents were instructed to frame and pass the order of refund within three weeks.