2024 (9) TMI 954 - AT - Income Tax

Validity of order passed by the TPO u/s 92CA(3A) computation period of limitation - HELD THAT - As per provision of Sec. 92CA(3A) the TPO is required to pass an order u/s 92CA(3) of the Act at any time before 60 days prior to the date on which the period of limitation referred to in Sec. 153 for making the assessment order on assessment or reassessment or re-computation or fresh assessment as the case may be expires. Thus, it is undisputed fact that transfer pricing officer has passed order u/s 92CA(3) on 01.11.2019 whereas the limitation for passing the said order u/s 92CA(3) expires on 31.10.2019 Therefore, as relying on Saint Gobain India P. Ltd. 2022 (4) TMI 808 - MADRAS HIGH COURT and Pfizer Healthcare Ltd. 2021 (2) TMI 1152 - MADRAS HIGH COURT the order u/s 92CA(3) of the Act is time barred by 1 day. Order of the TPO and draft assessment order are barred by limitation, therefore, resulting in assessee not being a eligible assessee u/s 144C(15)(b)(i) of the Act. Consequently, the final assessment was also bad in law. Assessee appeal allowed.

Issues Involved:
1. Depreciation on contracts acquired from Glaxosmithkline Pharmaceuticals Ltd.
2. Depreciation on contracts acquired from Chemito Technologies Private Limited.
3. Allowance of brought forward unabsorbed depreciation for AY 2008-09 to AY 2014-15.
4. Transfer pricing adjustment for import of analyzers.
5. Excess amount paid for acquisition of Alfa Aesar Division.
6. Allowance of brought forward business loss.
7. Failure to grant partial credit of Tax Deducted at Source (TDS).
8. Initiation of penalty proceedings.
9. Period of limitation for passing the transfer pricing order by the Transfer Pricing Officer (TPO).
10. Validity of proceedings initiated by the Assessing Officer (AO) under section 144C of the Act.

Detailed Analysis:

1. Depreciation on Contracts Acquired from Glaxosmithkline Pharmaceuticals Ltd and Chemito Technologies Private Limited:
The assessee claimed depreciation on contracts acquired in AY 2008-09 and AY 2009-10, which was disallowed by the Assessing Officer (AO) based on similar disallowances in earlier years. The Dispute Resolution Panel (DRP) upheld this disallowance, and the final assessment order reflected this disallowance.

2. Allowance of Brought Forward Unabsorbed Depreciation for AY 2008-09 to AY 2014-15:
The assessee claimed brought forward unabsorbed depreciation for AY 2008-09 to AY 2014-15. The AO disallowed these claims, and the DRP upheld this decision. The final assessment order included these disallowances.

3. Transfer Pricing Adjustment for Import of Analyzers:
The Transfer Pricing Officer (TPO) made an adjustment to the international transaction amounting to Rs. 33,83,31,881/-. The DRP revised this adjustment to Rs. 14,05,00,568/-, which was reflected in the final assessment order.

4. Excess Amount Paid for Acquisition of Alfa Aesar Division:
The AO made an adjustment for the excess amount paid for the acquisition of the Alfa Aesar Division. The DRP upheld this adjustment, and it was included in the final assessment order.

5. Allowance of Brought Forward Business Loss:
The assessee claimed a brought forward business loss of Rs. 84,55,403, which was disallowed by the AO and upheld by the DRP.

6. Failure to Grant Partial Credit of Tax Deducted at Source (TDS):
The assessee claimed that partial credit for TDS was not granted. The AO and DRP did not address this issue in detail, and it remained unresolved in the final assessment order.

7. Initiation of Penalty Proceedings:
The AO initiated penalty proceedings, but no specific penalty was imposed in the final assessment order.

8. Period of Limitation for Passing the Transfer Pricing Order by the TPO:
The assessee challenged the period of limitation for passing the TPO order, arguing that the order passed on 01.11.2019 was time-barred as it exceeded the statutory limit of 60 days prior to the end of the assessment period, which was 31.10.2019. The Tribunal referred to the case of Pfizer Healthcare India Private Limited vs. JCIT and similar ITAT decisions, concluding that the TPO order was indeed time-barred by one day.

9. Validity of Proceedings Initiated by the AO under Section 144C of the Act:
The assessee argued that the entire proceedings under section 144C were invalid due to the time-barred TPO order. The Tribunal agreed, citing similar cases where the final assessment was deemed invalid due to a time-barred TPO order. Consequently, the final assessment order was also considered invalid.

Conclusion:
The Tribunal allowed the appeal of the assessee, primarily on the grounds that the TPO order was time-barred, rendering the entire assessment proceedings invalid. The additional grounds raised by the assessee were accepted, and the original grounds of appeal were left open for adjudication if needed. The appeal was allowed, and the final assessment order was invalidated.

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