Limitation for final assessment under the Income-tax Act remains governed by section 153, not enlarged by section 144C.

A transfer-pricing eligible assessee may raise an additional pure question of law even if omitted from the memorandum of appeal, because Rule 11 of the ITAT Rules permits such a ground with leave and after hearing the other side; the objection to admission was therefore rejected. On limitation, the Tribunal held that completion of the final assessment remains governed by sections 153(1) and 153(4) of the Income-tax Act, and section 144C(13) does not independently enlarge time. It further held that the pandemic-related extension of limitation did not apply to the tax authority's order, so the assessment order passed on 25.07.2024 was time-barred and liable to be quashed.

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Issues: (i) Whether the additional ground raising a pure question of law, though not set out in the memorandum of appeal, was admissible. (ii) Whether the final assessment order was barred by limitation under the Income-tax Act, 1961, and whether section 144C displaced the limitation under section 153.

Issue (i): Whether the additional ground raising a pure question of law, though not set out in the memorandum of appeal, was admissible.

Analysis: The Tribunal held that its power to entertain an additional ground is wide enough to cover a question of law arising from facts already on record and bearing on tax liability. Rule 11 of the Income-tax Appellate Tribunal Rules, 1963 permits such a ground with leave of the Tribunal, provided the opposite party has a sufficient opportunity of being heard. Since the revenue was heard, the objection to admission was rejected.

Conclusion: The additional ground was admitted.

Issue (ii): Whether the final assessment order was barred by limitation under the Income-tax Act, 1961, and whether section 144C displaced the limitation under section 153.

Analysis: The Tribunal held that the limitation for completing the assessment had to be computed under sections 153(1) and 153(4), and not by treating section 144C(13) as an independent enlargement of time. It adopted the view that sections 144C and 153 are not mutually exclusive but operate together, and that the non-obstante clause in section 144C(13) has only a limited effect. It also held that the extension granted by the Supreme Court for limitation in the pandemic period did not apply to the passing of the assessment order by the tax authority. Applying these principles, the final assessment order passed on 25.07.2024 was beyond the statutory deadline.

Conclusion: The final assessment order was barred by limitation and was liable to be quashed.

Final Conclusion: The assessee succeeded on the legal issue of limitation, with the assessment order set aside and the appeal allowed, while liberty was left for further proceedings if the pending Supreme Court decision so required.

Ratio Decidendi: In a transfer-pricing eligible assessee case, the time limit for passing the final assessment order remains governed by section 153 of the Income-tax Act, 1961, and section 144C does not override or enlarge that statutory limitation.

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