2025 (8) TMI 29 - AT - Income Tax

Limitation for final assessment under Section 144C(13) starts from DRP order's e-transmission date

Rio Tinto India Private Ltd. Versus ACIT, Circle-19 (1), New Delhi.

The ITAT Delhi held that the limitation period for passing the final assessment order under section 144C(13) begins from the date of electronic ... Validity of assessment order passed - limitation prescribed u/s 144C(13) - HELD THAT:- We are of the considered view that the case of AO, that limitation to pass the final order has to be taken from the date of receipt of DRP order, as per the receipt stamp of 8.10.21, is not sustainable. The electronic transmission of communication on ITBA portal vide letter dated 29.9.2021, has to be construed to be the date of receipt of DRP order thus impugned final order dated 30.11.2021 is passed beyond period of limitation prescribed u/s 144C(13) of the Act. The additional ground is sustained. The appeal of the assessee is allowed ISSUES: Whether the final assessment order passed beyond the statutory time limit prescribed under section 144C(13) of the Income Tax Act, 1961 is time barred, null and void.When is the date of receipt of the Dispute Resolution Panel (DRP) order by the Assessing Officer (AO) in the context of electronic transmission via the ITBA portal for the purpose of limitation under section 144C(13) of the Act.Whether internal user functionalities or modes of uploading the DRP order (online system mode vs. manual to system mode) affect the commencement of limitation period under section 144C(13).Whether the limitation period under section 144C(13) can be reckoned differently for different officers (Faceless AO (FAO) vs. Junior Assessing Officer (JAO)) based on their access to the DRP order on the ITBA portal. RULINGS / HOLDINGS: The impugned final assessment order passed beyond the statutory time limit prescribed under section 144C(13) is 'non est in the eyes of law' and thus void, as the final order was passed after the expiry of the prescribed period.The date of receipt of the DRP order by the AO for limitation purposes under section 144C(13) is the date when the DRP order is electronically uploaded and becomes visible on the ITBA portal, not the date of any later physical receipt or manual acknowledgment.'Limitation cannot be dependent on varying user functionalities which are nothing but internal processes' and thus the mode of uploading the DRP order (online or manual entry) does not affect the commencement of limitation.The DRP directions, once digitally signed and uploaded, are immediately available to both FAO and JAO in the '360 Degree' screen on the ITBA portal, and therefore the limitation period under section 144C(13) starts from that date uniformly for both officers.Accordingly, the final assessment order passed after the expiry of the limitation period calculated from the date the DRP directions became available on ITBA is barred by limitation and the additions made therein are 'void ab-initio' and liable to be deleted. RATIONALE: The Court applied the statutory framework under section 144C(13) of the Income Tax Act, 1961, which prescribes strict timelines for passing the final assessment order after receipt of DRP directions.The Court relied on authoritative precedents including decisions of the Madras High Court and coordinate benches of the Tribunal, which clarified that the DRP order is deemed received when it is uploaded and visible on the ITBA portal, regardless of the method of uploading.The Court referred to an Advisory issued by the ITBA Team explaining the functionalities of the ITBA portal, emphasizing that the DRP order is accessible in real-time to the FAO and JAO through the '360 Degree' screen, ensuring compliance with statutory timelines.The Court rejected the argument that limitation should depend on internal user functionalities or manual processes, holding that such an interpretation would defeat the purpose of statutory limitation and allow multiple interpretations benefiting either party.The Court also noted consistent rulings by the Bombay and Delhi High Courts rejecting similar contentions, thereby affirming the uniform approach to limitation under section 144C(13).The decision reflects a doctrinal emphasis on strict adherence to statutory timelines and uniform application of limitation rules in faceless assessment proceedings conducted via the ITBA portal.