2025 (3) TMI 207 - AT - Income Tax

Validity of assessment order as barred by limitation - assessment Order u/s. 143(3) r.w.s. 144C(3) r.w.s. 144B - HELD THAT - We noted that the issue is very simple and there is no extension of time limit by CBDT or by Act in term of section 153(4)of the Act for completion of assessment u/s. 143(3) of the Act. Admittedly the reference to TPO was made u/s. 92CA(1) of the Act on 13.09.2021 and who passed the order u/s. 92CA(3) of the Act on 28.01.2022. Since the reference u/s. 92CA(1) of the Act was made to TPO consequent to section 153(4) due date for passing of order get extended upto 31.03.2022 but in the present case the assessment u/s. 143(3) r.w.s. 144C(3) r.w.s. 144B of the Act was passed vide order dated 30.09.2022 which is clearly barred by limitation. No infirmity in the order of CIT(A) holding the assessment order as barred by limitation and we confirm the findings of the CIT(A). Hence this jurisdictional issue of limitation is decided against the Revenue.

Summary

ISSUES PRESENTED and CONSIDERED

The primary issue in this appeal was whether the assessment order for the assessment year 2019-20 was barred by limitation. The Revenue contested the decision of the Commissioner of Income Tax (Appeals) [CIT(A)], who held that the assessment order was time-barred. The core legal question was whether the assessment order was completed within the permissible time limit, considering the extensions provided by the Central Board of Direct Taxes (CBDT) notifications and the relevant statutory provisions.

ISSUE-WISE DETAILED ANALYSIS

Relevant Legal Framework and Precedents

The legal framework involved sections 143(3), 144C(3), 144B, 153(1), 153(4), and 92CA of the Income Tax Act, 1961. The CBDT issued notifications extending the time limits for completing assessments due to various circumstances, including the COVID-19 pandemic. The Tribunal also referenced previous decisions, such as the Mumbai Bench's ruling in JP Morgan Chase Bank N.A. vs. CIT, which dealt with similar issues of time-barred assessments.

Court's Interpretation and Reasoning

The Tribunal examined the sequence of events and the relevant statutory provisions. It noted that the reference to the Transfer Pricing Officer (TPO) was made on 13.09.2021, and the TPO's order was passed on 28.01.2022. According to section 153(4), the due date for passing the assessment order would be extended to 31.03.2022. However, the assessment order was passed on 30.09.2022, which was beyond the permissible time limit.

Key Evidence and Findings

The Tribunal considered the dates of the CBDT notifications and the statutory provisions concerning the time limits for completing assessments. It found that the CBDT notifications did not extend the time limit for the assessment year 2019-20 beyond 31.03.2022. The Tribunal also noted that the TPO's order was passed within the requisite 60 days prior to the due date, confirming that no further extension was granted.

Application of Law to Facts

The Tribunal applied the provisions of section 153(4) to determine the due date for completing the assessment. It concluded that the assessment order was time-barred as it was passed after the extended due date of 31.03.2022. The Tribunal emphasized that the CBDT notifications and the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, did not provide any extension beyond this date.

Treatment of Competing Arguments

The Revenue argued that the assessment was completed within the extended time limit as per the CBDT notifications. However, the Tribunal found that these notifications did not apply to extend the time limit beyond 31.03.2022. The Tribunal upheld the CIT(A)'s decision, agreeing with the assessee's contention that the assessment order was time-barred.

Conclusions

The Tribunal concluded that the assessment order was barred by limitation and upheld the CIT(A)'s decision. It found no merit in the Revenue's arguments and dismissed the appeal.

SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning

The Tribunal stated, "We find no infirmity in the order of CIT(A) holding the assessment order as barred by limitation and we confirm the findings of the CIT(A). Hence, this jurisdictional issue of limitation is decided against the Revenue."

Core Principles Established

The Tribunal reinforced the principle that assessment orders must be completed within the statutory time limits, and any extensions must be explicitly provided by law or notifications. It emphasized that the CBDT notifications did not extend the time limit for the assessment year 2019-20 beyond 31.03.2022.

Final Determinations on Each Issue

The Tribunal determined that the assessment order was time-barred and dismissed the Revenue's appeal. It did not address the merits of the disallowance issues under sections 14A and 35(2AB) of the Act, as the jurisdictional issue of limitation was dispositive.