Eligible assessee under amended Section 144C: DRP reference extends limitation and precludes time bar or transfer order challenges.

Amendment to the definition of eligible assessee expanded scope to include certain non-residents, and where a matter is referred to the Dispute Resolution Panel the statutory limitation for passing assessments is extended by operation of the reference procedure; accordingly participation by the assessee in DRP proceedings and issuance of post-amendment notices rendered challenges on limitation or absence of a transfer order untenable. The writ petition attacking the assessment is dismissed, with liberty to challenge the merits before the appellate tribunal within thirty days of receipt of the order.

---

---

Issues: (i) Whether the assessee is an "eligible assessee" within the meaning of Section 144C(15)(b) of the Income Tax Act, 1961 (post amendment) for purposes of reference to the Dispute Resolution Panel; (ii) Whether the assessment framed by the Income Tax Officer was without jurisdiction or barred by limitation, including by reason of absence of a transfer order under Section 127 of the Income Tax Act, 1961.

Issue (i): Whether the assessee qualifies as an "eligible assessee" under Section 144C(15)(b) of the Income Tax Act, 1961 after the amendment effective 01.04.2020.

Analysis: The Court examined the amended text of Section 144C(15)(b) as effected by the Finance Act with effect from 01.04.2020 and the temporal sequence of notices and proceedings. The Court noted that the amendment expanded clause (ii) to include any non-resident not being a company, and that the Section 148 notice was issued after the amendment came into effect. The Court also considered the assessee's participation in proceedings before the Dispute Resolution Panel and statutory provisions regarding participation and consequences of such proceedings.

Conclusion: The issue is decided against the assessee. The assessee is an eligible assessee within the meaning of Section 144C(15)(b) of the Income Tax Act, 1961 (post amendment).

Issue (ii): Whether the assessment order dated 10.01.2023 was without jurisdiction or barred by limitation, including in the absence of a transfer order under Section 127 of the Income Tax Act, 1961.

Analysis: The Court considered the sequence of notices (including notice under Section 142(1) and notice under Section 148), the reference to the Dispute Resolution Panel, and the relevant limitation provisions. The Court held that reference to the Dispute Resolution Panel under Section 144C extends the limitation for passing assessment orders as contemplated by Section 144C read with the limitation provisions. The Court observed that the assessee had engaged with the Draft Assessment Order by filing an objection before the Dispute Resolution Panel, and that statutory provisions and the assessee's conduct precluded permitting a belated challenge to jurisdiction based on absence of a transfer order or limitation where Section 144C procedures applied.

Conclusion: The issue is decided against the assessee. The assessment order is not barred by limitation and is not invalid for want of a transfer order; the challenge to the assessment on these grounds is rejected.

Final Conclusion: The writ petition challenging the assessment order is dismissed; the Court grants liberty to the assessee to challenge the merits of the assessment before the Appellate Tribunal within thirty days from receipt of this order.

Ratio Decidendi: Where the amended definition of "eligible assessee" in Section 144C(15)(b) of the Income Tax Act, 1961 applies and the matter is taken up under Section 144C before the Dispute Resolution Panel, the limitation for passing the assessment is extended under Section 144C read with the limitation provisions, and the assessees covered by the amended definition cannot successfully impugn the assessment as time-barred or for lack of a transfer order when they are subject to Section 144C proceedings.

---