Transfer Pricing Officer's order invalid as passed beyond 60-day deadline under Section 92CA(3A), making subsequent assessment barred by limitation

The ITAT Mumbai held that the Transfer Pricing Officer's order dated 01.11.2019 was barred by limitation as it was not passed within the required 60-day period before the limitation date under Section 92CA(3A) read with Section 153. The court determined that the order should have been passed by 31.10.2019, being 60 days prior to the limitation expiry on 31.12.2019. Since the TP order was invalid, the subsequent final assessment order dated 26.02.2020 also became barred by limitation. The decision favored the assessee against the revenue department.

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Issues:
Interpretation of section 92CA(3A) of the Income-tax Act, 1961 in relation to the date of the Transfer Pricing Officer's order and the limitation period.

Analysis:
The appeal by the revenue and the cross objection by the assessee were against the order of the Commissioner of Income-Tax (Appeals) for the assessment year 2016-17. The revenue raised several grievances regarding the interpretation of section 92CB(3A) of the IT Act, deletion of adjustment on technical grounds, and the failure to adjudicate Transfer Pricing issues on merit. The main contention revolved around the date of the Transfer Pricing Officer's order and whether it was within the limitation period. The revenue argued that the order was passed within the prescribed time limit as per Section 9 of the General Clauses Act, which excludes the first day and includes the last day in computing the time limit.

The dispute centered on the timeline for completion of assessment proceedings and the passing of the Transfer Pricing order. The assessee contended that the Transfer Pricing Officer's order dated 01.11.2019 was barred by limitation as it was not passed within 60 days from the final assessment order date of 26.02.2020. The revenue's argument was that the order was within the time limit as per Section 9 of the General Clauses Act. The Tribunal analyzed the timelines and concluded that the Transfer Pricing Officer's order was indeed barred by limitation as it was passed after the prescribed 60-day period.

Referring to a judgment by the Madras High Court, the Tribunal emphasized that the period of 60 days should exclude the last day mentioned in Section 92CA(3A). Following the decision of the High Court, the Tribunal dismissed the revenue's appeal, as the Transfer Pricing orders were held to be barred by limitation. Since the appeal was dismissed on a point of law, the Tribunal did not delve into the merits of the case. Consequently, both the appeal by the revenue and the cross objection by the assessee were dismissed.

In conclusion, the Tribunal upheld the decision of the Commissioner of Income-Tax (Appeals) based on the interpretation of the relevant provisions and the timeline for passing the Transfer Pricing order. The judgment highlights the importance of adhering to statutory timelines and the correct computation of limitation periods in tax assessments.

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