Limitation for final assessment under section 144C(13) and its interplay with section 153; orders beyond limitation quashed

Limitation for passing final assessment orders under section 144C(13) must be determined by reference to section 144C read with section 153 when the provisions overlap in relation to transfer pricing proceedings; the tribunal applied a prior Madras High Court precedent to reject the revenue's contention that section 153 alone governs limitation. The tribunal found that final assessment orders were issued beyond the applicable limitation period under the combined scheme and therefore lacked jurisdiction; consequence: the impugned final assessment orders were quashed as time-barred.

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Issues: Whether the final assessment orders passed after completion of DRP proceedings under section 144C(13) are barred by limitation and therefore without jurisdiction, having regard to the interplay between section 144C and section 153 of the Income-tax Act, 1961.

Analysis: The Tribunal examined whether section 144C constitutes a self-contained code that excludes the time-limits in section 153 or whether the timelines under section 153 operate as an outer limit applicable on remand/DRP proceedings. The Tribunal considered the Madras High Court decision in Roca Bathroom Products P. Ltd., which held that sections 144C and 153 are mutually inclusive and that the outer time limits in section 153 (including section 153(2A)/(3)/(4) as applicable) govern remand/DRP proceedings; it noted the statutory timelines within section 144C (including provisions for draft order, filing of objections, DRP directions and finalisation) and the non-obstante language, but followed the reasoning that DRP proceedings form continuation of assessment and must be completed within the outer limitation prescribed under section 153. The Tribunal also addressed and rejected the Revenue's contention to defer hearing because of pending references in the Supreme Court, andon the meritsfound that the dates in the appeals showed final orders were passed beyond the applicable limitation period determined with reference to section 144C read with section 153.

Conclusion: The final assessment orders passed beyond the period of limitation calculated with reference to section 144C read with section 153 are without jurisdiction and are quashed; the appeals are allowed in favour of the assessee.

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