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2023 (3) TMI 654 - AT - Income TaxTP Adjustment - Period of limitation in terms of section 92CA(3A) - transfer pricing order passed during 60 days prior to the due date of completion of assessment is time barred - HELD THAT - Since the order passed by the TPO u/s 92CA of the I.T.Act for A.Y.2010-2011 and 2011-2012 are beyond the period of limitation and bad in law the addition in respect of international taxation (TP adjustments) stands quashed. Therefore grounds on merits on TP adjustments in both the appeals of the assessee are not adjudicated.
Issues Involved:
1. Limitation period for Transfer Pricing Officer's (TPO) order under Section 92CA(3A) of the Income Tax Act. 2. Disallowance of stock write-off on account of physical difference and errors in receipt of stock. 3. Partial credit for Advance Tax and interest under Section 244A. 4. Levy of interest under Section 234D. Issue-wise Detailed Analysis: 1. Limitation Period for TPO's Order: The primary issue was whether the TPO's orders for assessment years 2010-2011 and 2011-2012 were barred by limitation as per Section 92CA(3A) of the Income Tax Act. The assessee argued that the TPO's orders dated 30.01.2014 and 30.01.2015 were beyond the prescribed time limit, which should have been on or before 29.01.2014 and 29.01.2015 respectively. The Tribunal examined the relevant provisions, including Section 92CA(3A) and Section 153, and concluded that the TPO's orders were indeed passed beyond the permissible time frame. The Tribunal relied on the judgment of the Hon'ble Madras High Court in DCIT v. M/s. Pfizer Healthcare India Pvt. Ltd., which held that transfer pricing orders passed within 60 days prior to the due date of assessment completion are time-barred. Consequently, the Tribunal quashed the TPO's orders as they were barred by limitation. 2. Disallowance of Stock Write-off: For the assessment year 2010-2011, the assessee raised grounds related to the disallowance of stock write-off amounting to Rs.9,21,745 due to physical differences and errors in stock receipt. The Tribunal noted that a similar issue in the assessee's own case for the assessment year 2009-2010 was remanded to the Assessing Officer (A.O.) for verification. Following this precedent, the Tribunal restored the issue to the A.O. for de novo consideration, instructing the A.O. to verify the matter in accordance with the law and after providing a reasonable opportunity of hearing to the assessee. 3. Partial Credit for Advance Tax and Interest under Section 244A: For the assessment year 2011-2012, the assessee contended that the A.O. did not grant full credit for advance tax, resulting in a short credit of Rs.100,000. The Tribunal restored this issue to the A.O., directing him to examine the matter and grant TDS credit as per the law. Additionally, the assessee claimed interest under Section 244A on the refund amount, which the Tribunal did not specifically address, implying it was consequential to the main issue. 4. Levy of Interest under Section 234D: The assessee challenged the levy of interest under Section 234D, which is consequential in nature. The Tribunal dismissed this ground, indicating that it would be addressed based on the final outcome of the preceding issues. Conclusion: The appeals were partly allowed. The Tribunal quashed the TPO's orders for being time-barred, restored the issue of stock write-off to the A.O. for fresh verification, directed the A.O. to re-examine the credit for advance tax, and dismissed the grounds related to interest under Section 234D as consequential. The order was pronounced on 11th July 2022.
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