Limitation for passing final assessment order under section 144C(13) and section 153 interplay leads to quashing of time-barred orders

Interplay between limitation under section 144C(13) and section 153 addresses whether the time bar for passing final assessment is governed solely by section 144C or read with section 153. The commentary applies the reasoning of an earlier decision treating sections 144C and 153 as mutually inclusive and overlapping because both relate to transfer pricing assessment procedure, and concludes that final assessment orders rendered beyond the combined limitation are without jurisdiction. Consequence: such time-barred final assessment orders must be quashed when passed after the limitation under section 144C read with section 153.

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Issues: Whether the final assessment orders passed under section 144C(13) read with section 153 of the Income-tax Act, 1961 are barred by limitation.

Analysis: Relevant legal framework comprises the timelines prescribed under section 144C (including draft order, DRP directions and finalisation) and the outer limitation periods in section 153 (including provisos and extended periods). The decision in Roca Bathroom Products P. Ltd. (Madras High Court) treated the DRP proceedings as part of assessment proceedings and held that the outer time limits under section 153 apply to finalisation after remand; that approach was followed by the Tribunal. The assessee supplied uncontested date charts showing draft assessment dates, DRP direction dates and the due dates for final assessment under section 144C(13) r.w.s. 153. The final assessment orders were passed after the applicable due dates. Competing contentions that section 144C is a complete code with its own self-contained timelines and that the non-obstante clause excludes section 153 were considered and distinguished on statutory construction, practical consequences and on authority supporting application of section 153 timelines to post-draft proceedings.

Conclusion: The final assessment orders passed beyond the period of limitation under section 144C(13) read with section 153 are without jurisdiction and are quashed; decision is in favour of the assessee.

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