Invalidity of Assessment Order Due to Time Limit; Tribunal Rules in Favor

The final assessment order dated 12.01.2021 was deemed invalid by the Tribunal as it was passed well beyond the prescribed limitation period under Section 144C of the Income-tax Act, 1961. The assessee's failure to file objections within the specified timeline resulted in the invalidity of the assessment order, despite contentions from the Departmental Representative. The Tribunal emphasized the importance of adhering to statutory timelines in the assessment process and ruled in favor of the assessee, allowing the appeal and declaring the impugned assessment order invalid.

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Issues:
- Whether the impugned assessment order is barred by limitation prescribed under statutory provisionsRs.

Analysis:
The appeal pertains to the final assessment order dated 12.01.2021 for the assessment year 2012-13. The main issue is whether the assessment order is barred by limitation as per statutory provisions. The assessee, a non-resident company incorporated in Singapore, had its assessment reopened under Section 147 of the Income-tax Act, 1961. The Assessing Officer framed a draft assessment order on 18.12.2019, determining the total income of the assessee at Rs. 45,17,870. The assessee raised objections before the Dispute Resolution Panel (DRP) on 27.01.2020, which were dismissed as being beyond the period of limitation prescribed under Section 144C(2) of the Act.

The counsel for the assessee argued that the final assessment order passed on 12.01.2021 is beyond the limitation period prescribed under Section 144C(4) of the Act, rendering it invalid. The Departmental Representative contended that since the assessee filed objections before the DRP on 27.01.2020, the final assessment order passed on 12.01.2021 is within the time limit. However, the Tribunal analyzed the relevant provisions of Section 144C, emphasizing the importance of timelines and limitations in the assessment process.

The Tribunal noted that the assessee failed to file objections within thirty days of receiving the draft assessment order, as required by Section 144C(2)(b) of the Act. Consequently, the Assessing Officer was duty-bound to complete the assessment within one month from the end of the month in which the period for filing objections expired. As the final assessment order was passed on 12.01.2021, well beyond the prescribed period of limitation, it was deemed invalid.

The Tribunal rejected the contention that the Assessing Officer had to wait for DRP directions before passing the final assessment order, emphasizing the strict adherence to statutory timelines. The decisions cited by the assessee supported the view that the final assessment order, passed beyond the limitation period, should be quashed. Therefore, the impugned assessment order dated 12.01.2021 was declared invalid, and the appeal was allowed.

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