Assessment orders passed after Section 144C(13) deadline quashed as time-barred following established precedents

ITAT Kolkata set aside assessment orders passed beyond statutory time limit under Section 144C(13). DRP directions were received by AO on 03/10/2018, requiring compliance by 30/11/2018. However, AO passed assessment orders on 06/12/2018, exceeding the prescribed one-month deadline. Following precedents from Envestnet Asset Management and Dentsply India cases, the tribunal held that assessment orders passed after expiry of statutory time limit are barred by limitation. Both assessment orders for AY 2010-11 and 2011-12 were quashed as time-barred.

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Issues: Validity of re-assessment order passed beyond the time limit stipulated under section 144C(13) of the Income Tax Act, 1961.

Analysis:

1. The appeals were directed against the separate orders of the Assistant Commissioner of Income Tax, Circle-8(2), Kolkata, for the Assessment Years 2010-11 and 2011-12, framed under sections 144C(13), 147, and 143(3) of the Income Tax Act, 1961, as per the directions of the Dispute Resolution Panel-2, New Delhi.

2. The additional ground raised by the assessee challenged the validity of the Final Assessment Order passed by the Assessing Officer beyond the statutory time limit prescribed under section 144C(13) of the Act. The Assessing Officer failed to pass the final assessment order within the specified time limit, leading to the appeal.

3. The Assessing Officer received directions from the Dispute Resolution Panel on 03 October 2018, and the time limit to pass the Final Assessment Order ended on 30 November 2018. However, the Final Assessment Order was passed on 06 December 2018, beyond the prescribed due date, as per section 144C(13) of the Act.

4. The contention was raised that the Assessing Officer's time limit for giving effect to the directions of the Dispute Resolution Panel was expiring on 31 December 2018. However, the Tribunal disagreed, stating that the time limit prescribed under section 144C(13) of the Act was one month from the end of the month in which the directions were received, i.e., 30 November 2018.

5. Citing precedents and legal provisions, the Tribunal held that the assessment orders for both years were barred by limitation and quashed them. The orders were set aside as being beyond the prescribed time limit, in line with the decisions of other Co-ordinate Benches.

6. As a result of quashing the assessment orders, no additions remained, rendering the remaining grounds of appeal academic and not needing adjudication. The appeals of the assessee were allowed based on the issue of the assessment orders being barred by limitation.

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