Limitation for final assessment under section 144C(13) governed by 144C read with 153; order held time-barred

Interplay between limitation for passing final assessment under section 144C(13) and section 153 is addressed, with reliance on precedent treating the provisions as mutually inclusive and overlapping; the legal basis is that limitation must be determined by reading the specific timeline in section 144C read with section 153, thereby extending the applicable reference for computing limitation. Applying that principle to the facts, the final assessment order issued by the assessing officer was found to have been passed beyond the applicable period of limitation and is therefore time-barred.

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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; specifically, whether the time limits prescribed under section 153 apply to proceedings under section 144C(13).

Analysis: The Tribunal examined the competing positions, including the Madras High Court decision in Roca Bathroom Products (P.) Ltd., and the pendency of related matters before the Supreme Court. Having considered the statutory scheme of section 144C and section 153 and the timeline for DRP and Assessing Officer action, the Tribunal compared the statutory due dates with the actual dates of passing final orders for the six assessment years. The dates were not disputed by the Revenue and the Tribunal found that in each assessment year the final assessment order was passed after the limitation period as computed with reference to section 153. The Tribunal therefore applied the principle that the provisions of sections 144C and 153 are mutually inclusive for computing the limitation in such remand/DRP cases and that where the final order is beyond the outer time-limit under section 153, the order is time-barred.

Conclusion: The final assessment orders for the six assessment years are time-barred and are quashed; the appeals are allowed in favour of the assessee.

Ratio Decidendi: Where assessment proceedings involve section 144C remand/DRP processes, the limitation for passing the final assessment order must be computed with reference to section 153 of the Income-tax Act, 1961; if the final order is passed beyond that outer time limit, it is barred by limitation.

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