Transfer pricing order passed beyond mandatory 60-day limit under section 92CA(3A) held time-barred and invalid

Karnataka HC dismissed revenue's appeals challenging Tribunal's order that held a transfer pricing order u/s 92CA(3) was time-barred. The Tribunal found the order should have been passed by 28.1.2015 but was passed on 30.1.2015, making it beyond the mandatory 60-day limitation period prescribed u/s 92CA(3A). Revenue's contention that the order was passed on 28.1.2015 but dated 30.1.2015 was rejected as not curing the procedural defect. HC upheld the Tribunal's factual finding, noting the 60-day time limit is mandatory per Madras HC precedents, and dismissed appeals for lack of substantial legal questions.

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Issues:
1. Appeal filed by revenue challenging order passed by Income Tax Appellate Tribunal.
2. Transfer pricing adjustment made by Transfer Pricing Officer.
3. Objections filed by assessee before Dispute Resolution Panel.
4. Contention regarding limitation of passing order under Section 92CA (3) of the Income Tax Act.
5. Tribunal's decision based on time limitation under Section 153 (1) of the Act.
6. Arguments presented by counsels for both revenue and assessee.
7. Interpretation of time limit for passing order under Section 92CA (3).
8. Rejection of revenue's contention regarding the date of order.
9. Judicial precedents upholding the mandatory nature of time limits in transfer pricing assessments.
10. Tribunal's factual finding on the limitation issue.

Analysis:
The High Court of Karnataka heard an appeal filed by the revenue challenging the order passed by the Income Tax Appellate Tribunal. The case involved transfer pricing adjustments made by the Transfer Pricing Officer (TPO) under Section 92CA (3) of the Income Tax Act. The assessee, engaged in the business of manufacturing and selling solar products, filed objections before the Dispute Resolution Panel (DRP) against the draft assessment order. The main contention was the limitation period for passing the order under Section 92CA (3) of the Act. The Tribunal held that the order should have been passed before 28.1.2015, as per the time limit under Section 153 (1) of the Act. However, the order was passed on 30.1.2015, leading to the dismissal of the revenue's appeal and acceptance of the assessee's appeal.

During the proceedings, the revenue argued that the delay in passing the order was a curable defect as the order was dated 30.1.2015, despite being passed on 28.1.2015. The Tribunal rejected this argument, citing a judgment of the Madras High Court, which emphasized the mandatory nature of time limits in transfer pricing assessments. The court referred to the Madras High Court judgments in the cases of M/s. Pfizer Healthcare India Private Ltd. and Saint Gobain India Private Ltd., which upheld the strict adherence to time schedules in such assessments.

The High Court concluded that the issue before the Tribunal was factual, focusing on whether the order under Section 92CA (3) was passed within the prescribed time limit. Given the Tribunal's finding that the order was passed beyond the deadline, the court dismissed the revenue's appeal, stating that no substantial question of law arose for consideration. The appeals were dismissed at the admission stage for lacking merit, based on the factual determination made by the Tribunal regarding the limitation issue.

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