Limitation for passing final assessment order under section 144C read with section 153: time-bar quashes assessments beyond prescribed period

Interplay between limitation provisions requires determining the time limit for final assessment by reference to both section 144C and section 153; the provisions are mutually inclusive and overlapping, so the limitation period for passing final assessment orders must be computed with reference to both, not 144C alone. An assessment order passed beyond the combined time limit ascertained under these provisions is time-barred and liable to be quashed. Reliance on a stayed precedent does not preclude hearing where the assessee advances an alternative uns stayed authority; an interim stay suspends only the operative part and does not obliterate ratio decidendi.

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Issues: Whether the final assessment orders passed under section 143(3) read with section 144C(13) are barred by limitation and must be determined with reference to section 153 of the Income-tax Act, 1961.

Analysis: The Tribunal examined the interplay between section 144C and section 153, considering the Madras High Court decision in Roca Bathroom Products P. Ltd. and subsequent authorities addressing whether the timelines under section 153 subsume or apply to final assessment orders under section 144C(13). The analysis focused on the statutory scheme of section 144C (including its staged timelines for draft order, DRP objections, DRP directions and finalization) and on section 153's outer time limits for completing assessment proceedings, including extensions. The Tribunal compared the statutory timelines with the factual date charts for the relevant assessment years and applied the principle that DRP proceedings are part of assessment proceedings and that the provisions are inter-dependent rather than mutually exclusive. The Tribunal found that, on the facts and dates before it, the final orders were passed after the time limits as determined by reading section 144C with section 153.

Conclusion: The final assessment orders passed beyond the time limit determined by reading section 144C with section 153 are barred by limitation and are quashed; the appeal is allowed in favour of the assessee.

Ratio Decidendi: Sections 144C and 153 are mutually inclusive for computing the limitation for final assessment orders under section 144C(13); where the final order is passed beyond the time-limit so determined, the order is time-barred and liable to be quashed.

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