Reference to Transfer Pricing Officer held time barred; TPO order and draft assessment treated as without jurisdiction.

Validity of a reference to the Transfer Pricing Officer under the transfer pricing provisions was determined by applying the limitation regime: the proviso to the limitation provision extended the assessment period to 31.03.2021 for notices served on or after 01.04.2019, and pandemic relief extended the date further to 30.06.2021; approval for a TPO reference was recorded on 10.02.2021 but the actual reference was received by the TPO only on 13.01.2022. Because the reference was not made within the prescribed period for completion of assessment, the court found the subsequent TPO proceedings and draft assessment to be without jurisdiction and invalid.

---

---

Issues: Whether the reference to the Transfer Pricing Officer under Section 92CA(1) was made within the period of limitation such that the order passed under Section 92CA(3) is valid, and whether the impugned TPO order dated 27.01.2022 is liable to be quashed for being founded on a time-barred reference.

Analysis: The Court examined the timelines under Sections 148 and 153 of the Income-tax Act, 1961 and the effect of a reference under Section 92CA(1) on the limitation for completion of assessment. For a notice under Section 148 dated 24.02.2020 the ordinary limitation to complete reassessment fell within the period specified by Section 153(2) and the applicable proviso; a valid extension under Section 153(4) to add twelve months is available only if a reference under Section 92CA(1) is actually made during the course of the assessment proceedings before expiry of the original limitation. The material on record (ITBA entries and order sheets) showed that although approval for reference was accorded on 10.02.2021, the reference was transmitted to the TPO only on 11.01.2022 and received on 13.01.2022, after the relevant limitation had expired; pandemic-related statutory/notification extensions were considered but did not cure the fact that the reference itself was not made within the permissible period. An order passed by the TPO pursuant to a reference made beyond the statutory period is without jurisdiction and vitiates consequential proceedings.

Conclusion: The reference under Section 92CA(1) was not made within the period of limitation required by Section 153(2); the TPO order dated 27.01.2022 under Section 92CA(3) is without jurisdiction and is quashed. The writ petition is allowed.

Final Conclusion: The impugned TPO order dated 27.01.2022 (and any consequential proceedings) is set aside for want of a valid reference; the petitioner succeeds on the limitation and jurisdictional ground.

Ratio Decidendi: A reference under Section 92CA(1) must be made during the course of assessment before expiry of the limitation under Section 153(2); only a reference actually made within that period can invoke the extension under Section 153(4), and a TPO order based on a reference made after that period is without jurisdiction.

---