2023 (9) TMI 907 - AT - Income Tax

Validity of order passed u/s 92CA - Time limit for passing order - period of limitation - HELD THAT - As the time limit for passing the order under Section 92CA(3) of the Act, computed as per the judgement of Hon ble Madras High Court in the case of Pfizer Healthcare India Private Limited 2021 (2) TMI 1152 - MADRAS HIGH COURT expired on 31/10/2019. Since the order u/s 92CA(3) of the Act has been passed 01/11/2019, i.e., after the expiry of the period of limitation, the same is set aside as being barred by limitation. Eligible Assessee u/s 144C(15) - As per the order, dated 01/11/2019 passed by TPO u/s 92CA(3) of the Act is barred by limitation Appellant, therefore, does not qualify as an Eligible Assessee under Section 144C(15)(b)(i) of the Act. Thus, the Assessing Officer could not have assumed jurisdiction to invoke provisions of Section 144C(1) of the Act for passing the Draft Assessment Order, dated 08/11/2019. As a result, the time limit available to the Assessing Officer under Section 153 of the Act for passing the assessment order expired on 31/12/2019 even if the benefit of extended period of 12 months is granted on account of a valid reference having been made under Section 92CA of the Act. The Final Assessment Order has been passed in present case on 31/03/2021 and therefore, the same is barred by limitation. Assessee appeal allowed.

Summary

Issues Involved:
1. Admission of Additional Ground
2. Limitation for Passing Transfer Pricing Order
3. Limitation for Passing Final Assessment Order

Summary:

1. Admission of Additional Ground:
The appellant raised an additional ground claiming the Final Assessment Order dated 31/03/2021 was barred by limitation and thus void. The Tribunal admitted the additional ground based on the Supreme Court judgment in National Thermal Power Co. Ltd. vs. CIT, recognizing it as a legal ground that could be adjudicated based on existing records.

2. Limitation for Passing Transfer Pricing Order:
The appellant argued that the Transfer Pricing Officer (TPO) passed the order on 01/11/2019, beyond the permissible limit, citing the Madras High Court judgment in Pfizer Healthcare India Private Ltd. vs. Joint Commissioner of Income Tax. The Tribunal noted that the time limit for the TPO to pass the order was 31/10/2019. Since the order was passed on 01/11/2019, it was deemed barred by limitation and thus set aside.

3. Limitation for Passing Final Assessment Order:
The appellant contended that the Final Assessment Order dated 31/03/2021 was also barred by limitation. The Tribunal referred to previous judgments, including Mondelez India Foods Pvt. Ltd. and Atos India Pvt. Ltd., which established that if the TPO's order is invalid, the subsequent Final Assessment Order is also void. Since the appellant was not an "Eligible Assessee" under Section 144C due to the invalid TPO order, the Assessing Officer could not invoke Section 144C(1). Consequently, the Final Assessment Order passed on 31/03/2021 was beyond the prescribed period and thus barred by limitation.

Conclusion:
The Tribunal quashed both the Transfer Pricing Order dated 01/11/2019 and the Final Assessment Order dated 31/03/2021 as being barred by limitation and bad in law. The appeal was allowed, and all other grounds raised by the appellant were disposed of as infructuous.