Limitation for final assessment under section 144C(13) determined by section 153, resulting in quashing of timebarred orders

Limitation for passing a final assessment under section 144C(13) must be determined with reference to section 153 read with section 144C, because the provisions are mutually inclusive and overlap; applying that principle the tribunal held the impugned final assessment order under 143(3) read with 144C(13) timebarred and quashed it. The tribunal followed binding precedents rejecting the Department's narrower timeline argument, and granted parties liberty to revive proceedings on other merits if the Supreme Court Larger Bench resolves the same limitation question differently.

---

---

Issues: (i) 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: The legal framework involves the timelines prescribed under section 144C (including subsections 1, 4, 12 and 13) and the outer limitation periods under section 153 (including sections 153(2A) and 153(3)) of the Income-tax Act, 1961. The question requires determining whether the time taken in post-draft proceedings (including DRP proceedings and remand-related steps) must be reckoned in accordance with section 153 timelines or only with the standalone timelines prescribed under section 144C. Relevant precedents and interim directions from higher courts addressing the interaction between section 144C and section 153 were considered. For each assessment year, the due date for passing the final assessment order under section 144C(13) read with section 153 was compared with the actual date on which the final order was passed to ascertain whether the orders fell beyond the applicable limitation period.

Conclusion: The final assessment orders in the matters under consideration are barred by limitation and are quashed. The appeals are allowed.

---