Tax Assessment Order Overturned Due to Missed Deadline; Tribunal Deems It Invalid for Being Filed Late.

The Appellate Tribunal ITAT Mumbai quashed the assessment order for the assessment year 2016-17, determining it was barred by limitation. The Tribunal admitted the assessee's additional ground challenging the validity of the assessment order, as it was filed beyond the time limit prescribed under Section 153 of the Income-tax Act, 1961. Upon review, the Tribunal found the Transfer Pricing Officer's order was issued one day late, rendering the assessment order invalid. Consequently, the assessee's appeal was allowed, and the assessment order was annulled.

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Issues involved: Determination of Arm's Length Price of international transactions, validity of assessment order based on time limit prescribed under the Income-tax Act, 1961.

Summary:
The Appellate Tribunal ITAT Mumbai heard the appeal filed by an assessee against the assessment order passed by the National e-assessment Centre, Delhi for the assessment year 2016-17. The assessment involved the determination of Arm's Length Price of international transactions. The assessee raised an additional ground challenging the validity of the assessment order, contending that it was beyond the time limit prescribed under Section 153 of the Act.

Upon consideration, the Tribunal admitted the additional ground raised by the assessee, as it pertained to a jurisdictional issue that could be raised at any time. The assessee argued that the order passed by the Transfer Pricing Officer was beyond the due date, rendering the assessment order barred by limitation. The Departmental Representative opposed this argument, claiming the Transfer Pricing Officer's order was within the time limit.

After careful consideration and verification of dates, the Tribunal found that the Transfer Pricing Officer's order was indeed passed one day beyond the prescribed time limit. As a result, the assessment order was deemed to be barred by limitation. Citing relevant judicial precedents, including a decision of the Hon'ble Madras High Court, the Tribunal held that the assessment order was quashed due to being time-barred.

As a consequence of this finding, the Tribunal allowed the assessee's appeal, as all other grounds were deemed unnecessary to adjudicate. The final assessment order passed by the Assessing Officer was held to be barred by limitation and was therefore quashed.

The decision was pronounced in the open court on 21.07.2023.

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