Tribunal rules AO's assessment order time-barred under section 153, quashes Pr. CIT's revision attempt.

The Tribunal dismissed both the Revenue's appeal and the Cross Objection filed by the assessee, upholding that the AO's assessment order was time-barred and invalid under section 153 of the Income-tax Act, 1961. The Tribunal also allowed the assessee's appeal against the Pr. CIT's order under section 263, quashing it as it sought to revise a non-est assessment order.

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Issues Involved:
1. Validity of the assessment order dated 28.12.2018 passed by the AO under section 143(3) read with section 144C of the Income-tax Act, 1961.
2. Time-barred nature of the assessment order under section 153 of the Act.
3. The applicability of section 292BB of the Act.
4. The validity of the order passed by the Pr. CIT under section 263 of the Act.

Detailed Analysis:

1. Validity of the Assessment Order:
The Revenue appealed against the Ld. CIT(A)'s decision which upheld the assessee's claim that the AO's assessment order dated 28.12.2018 was non-est in the eyes of law as it was passed beyond the statutory time limit prescribed under section 153 of the Act. The assessee had filed a Cross Objection challenging the merits of the addition made by the AO.

2. Time-barred Nature of the Assessment Order:
The assessee argued that the AO's assessment order dated 28.12.2018 was barred by limitation as per section 153 of the Act. The Hon'ble Calcutta High Court had set aside the initial transfer pricing order and directed the AO to proceed afresh. The AO issued a fresh notice on 06.10.2017 and passed the final assessment order on 28.12.2018. The Ld. CIT(A) held that the assessment order was time-barred as it was passed beyond the twelve-month period from the end of the month in which the High Court's order was received (i.e., 31.10.2018). The Tribunal upheld this decision, confirming that the AO lacked jurisdiction to pass the assessment order after the limitation period had expired.

3. Applicability of Section 292BB:
The Ld. DR argued that section 292BB of the Act could cure any defect in the service of notice. However, the Tribunal clarified that section 292BB only applies to defects in the service of notice and not to orders passed beyond the period of limitation. Since the assessee challenged the validity of the order on the grounds of being time-barred, section 292BB was deemed irrelevant in this context.

4. Validity of the Order Passed by the Pr. CIT under Section 263:
The assessee also appealed against the Pr. CIT's order under section 263, which sought to revise the AO's assessment order dated 28.12.2018. Since the Tribunal upheld that the assessment order dated 28.12.2018 was non-est in the eyes of law, the Pr. CIT's action of revising a non-est order was deemed unsustainable. The Tribunal quashed the Pr. CIT's order dated 23.03.2021, citing the legal maxim "subleto fundamento credit opus," meaning if the foundation is removed, the superstructure falls.

Conclusion:
The Tribunal dismissed both the Revenue's appeal and the Cross Objection filed by the assessee against the Ld. CIT(A)'s order, upholding that the AO's assessment order was time-barred and invalid. Consequently, the Tribunal allowed the assessee's appeal against the Pr. CIT's order under section 263, quashing it as it sought to revise a non-est assessment order.

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