Limitation for final assessment under transfer pricing visavis general limitation: order quashed as timebarred, appeal may be revived

Limitation for passing the final assessment order under the transfer pricing regime must be determined by reading the limitation provisions of the specific transfer pricing procedure together with the general limitation provision, treating the two as mutually inclusive and overlapping; therefore the final assessment order for the relevant year was found timebarred and quashed. The tribunal followed prior high court and tribunal precedents applying the mutual inclusion principle, and granted liberty to revive the appeal on other merits if the pending Supreme Court larger bench decision alters this limitation analysis.

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Issues: Whether the Final Assessment Order dated 29/07/2024 passed under Section 143(3) read with Section 144C(13) is barred by limitation under Section 153 read with Section 144C of the Income-tax Act, 1961 and therefore liable to be quashed.

Analysis: The Tribunal examined the interplay between Sections 144C and 153 of the Income-tax Act and applied principles of harmonious construction and binding precedent. The Tribunal followed the ratio of the Hon'ble High Court of Madras in Roca Bathroom Products Pvt. Ltd. and coordinate decisions of the Tribunal (including Hyderabad Bench) holding that Sections 144C and 153 are mutually inclusive and the outer time limits in Section 153 apply to final assessment orders made pursuant to remand under Section 144C. The Bench rejected the Revenue's request to defer adjudication despite an interim order in a related Supreme Court matter, observing that the Madras High Court decision relied upon by the assessee is not stayed and there is no contrary High Court decision. The Tribunal noted timelines for draft and final orders under the statutory scheme, the effect of the non-obstante clause, and authorities on reasonable time, and concluded that where the final order is passed beyond the outer time limit under Section 153 (as extended under Section 153(4) where applicable), the order is time-barred and liable to be quashed. The Tribunal also preserved parties' rights by granting liberty to revive the appeal on merits if the Supreme Court's final decision in the related matter necessitates modification.

Conclusion: The Final Assessment Order dated 29/07/2024 is barred by limitation under Section 153 read with Section 144C of the Income-tax Act, 1961 and is quashed; decision is in favour of the assessee.

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