Final assessment order deemed nonest due to untimely issuance under Income Tax Act section 144C(13).

The Tribunal held that the final assessment order passed by the Assessing Officer was barred by limitation under section 144C(13) of the Income Tax Act as it was issued beyond the prescribed time limit. Consequently, the order was deemed nonest in the eyes of the law. The Tribunal allowed the assessee's appeal on the grounds of the untimeliness of the final assessment order, without addressing other merits raised by the assessee. The appeal was partly allowed based on this finding, with the Tribunal's decision pronounced on December 5, 2022.

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Issues:
1. Timeliness of final assessment order under section 144C(13) of the Income Tax Act.

Analysis:
The appeal was filed against the final assessment order passed by the Assessing Officer (AO) under section 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act for the assessment year 2017-2018. The primary issue raised by the assessee was the timeliness of the final assessment order, specifically challenging whether the order was barred by limitation and should be quashed. The assessee contended that the AO should have passed the order within one month from the date of receipt of directions from the Dispute Resolution Panel (DRP) under section 144C(13) of the Act.

The facts of the case revealed that the AO received the DRP's directions on 30.12.2021, and subsequently passed the final assessment order on 02.02.2022. The relevant legal provision, section 144C(13) of the Act, mandates that the final assessment order should be passed within one month from the end of the month in which the directions are received. The Tribunal noted that the order should have been passed on or before 31.01.2022, but since it was issued on 02.02.2022, it was beyond the prescribed time limit. Consequently, the Tribunal held that the order passed by the AO was barred by limitation as per section 144C(13), rendering it nonest in the eyes of the law. Therefore, the Tribunal allowed ground No. 1 raised by the assessee, concerning the timeliness of the final assessment order.

Given the decision on the primary issue, the Tribunal did not delve into the other grounds raised by the assessee on merits, leaving them unadjudicated. Ultimately, the appeal filed by the assessee was partly allowed based on the finding that the final assessment order was not passed within the stipulated time frame as required by the Income Tax Act. The order was pronounced on the 05th day of December, 2022, by the Tribunal.

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