Transfer Pricing Order Quashed as Time-Barred under Income Tax Act

The Division Bench upheld that the order issued by the Transfer Pricing Officer on 01.11.2019 for the assessment year 2016-17 was time-barred under Section 92CA(3A) of the Income Tax Act, as it exceeded the sixty-day limitation period prior to the assessment order deadline of 31.12.2019. The Division Bench's decision led to the quashing of the order and closure of the connected Writ Miscellaneous Petition without costs.

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Issues:
Challenge to order of Transfer Pricing Officer on grounds of limitation under Section 92CA(3A) of the Income Tax Act 1961.

Analysis:
The petitioner contested the order dated 01.11.2019 issued by the Transfer Pricing Officer for the assessment year 2016-17, claiming it was time-barred under Section 92CA(3A) of the Income Tax Act. The key point of contention was whether the order was passed within the sixty-day limitation period prior to the assessment order deadline of 31.12.2019. The Department argued the order was within the prescribed time limit, while the petitioner argued it was beyond the deadline.

The issue of limitation was previously addressed in a batch of writ petitions by other assessees, resulting in a judgment that the Transfer Pricing Officer's order was indeed time-barred. The Department appealed this decision in Writ Appeals before the Division Bench, which upheld the earlier ruling on 31.03.2022. The Division Bench confirmed that the order should have been issued by 31.10.2019, making the 01.11.2019 order invalid due to exceeding the limitation period.

The Standing Counsels for the respondents did not challenge the Division Bench's judgment but mentioned that Special Leave Petitions had been filed with condone delay petitions in response. The Supreme Court had ordered notice in some cases and allowed delay condonation in one specific petition. Despite no stay being granted by the Supreme Court, the Division Bench's decision was considered applicable to the present case, leading to the quashing of the impugned order dated 01.11.2019 on grounds of being time-barred under Section 92CA(3A) of the Income Tax Act. Consequently, the connected Writ Miscellaneous Petition was closed without costs.

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