Limitation under section 153 and section 144C: final assessment passed after limitation quashed; appeal allowed.

The note addresses whether a final assessment under section 143(3) read with section 144C(13) is time barred, holding that the limitation regime in section 153 operates alongside the special DRP scheme in section 144C; the non obstante clause in section 144C(13) does not override the statutory outer time limits. Applying the binding ratio in Roca Bathroom Products (Madras HC) and co ordinate Tribunal precedent, the note finds the assessment passed after the expiry of the outer period under the limitation code to be barred and quashes the final assessment, while reserving liberty to revive substantive issues if a higher court later requires.

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Issues: (i) Whether the final assessment order dated 26/07/2024 passed under section 143(3) read with section 144C(13) of the Income-tax Act, 1961 for Assessment Year 2020-21 is barred by limitation under section 153 read with section 144C of the Income-tax Act, 1961.

Analysis: The issue requires examination of the interplay between the limitation provisions of section 153 of the Income-tax Act, 1961 and the special scheme in section 144C including its non-obstante clause. Relevant statutory timeline provisions include the 21/33 month framework and the extended periods under section 153 when reference to TPO/DRP occurs, as well as the 9-month limit under section 144C(12) for DRP directions and the 1 month window for final order after receipt of directions under section 144C(13). The Tribunal relied on the binding ratio of the Hon'ble High Court of Madras in Roca Bathroom Products Pvt. Ltd., which held that sections 144C and 153 are mutually inclusive and interdependent, that the non-obstante clause in section 144C(13) does not exclude the operation of section 153 as a whole, and that the statutory time limits must be adhered to; further, the Tribunal followed its co-ordinate decision in Teva Pharmaceutical & Chemical Industries India Pvt. Ltd., applying the Madras High Court ratio to quash time-barred assessments. The Assessee's chronology shows the outer time limit under section 153(1) read with section 153(4) expired on 30/09/2023 while the final order impugned was passed on 26/07/2024, beyond the statutory period. Although the Supreme Court has an interlocutory matter pending (Shelf Drilling Ron Tappmeyer Ltd.) on the same question, the Tribunal rejected the Revenue's request to defer adjudication and, following the cited precedents, examined and decided the limitation issue; liberty was reserved to revive the appeal on merits if the Supreme Court decision requires modification of this order.

Conclusion: The final assessment order dated 26/07/2024 passed under section 143(3) read with section 144C(13) of the Income tax Act, 1961 for Assessment Year 2020 21 is barred by limitation under section 153 read with section 144C of the Income tax Act, 1961. The impugned final assessment order is quashed and the appeal is allowed in favour of the assessee, with liberty to revive other issues if required by the eventual decision of the Hon'ble Supreme Court in Shelf Drilling Ron Tappmeyer Ltd.

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