Section 144C(13) time limit renders draft assessment notices unenforceable if final assessment is not passed within the prescribed period.

Section 144C(13) requires the assessing officer to pass a final assessment conforming to Dispute Resolution Panel directions within one month from the end of the month in which directions are received; that statutory timeline is mandatory and operates despite Sections 153/153B. Where the DRP directions were received in September 2021 and no final order was passed by October 31, 2021, jurisdiction lapsed, administrative or ITBA technical errors do not extend the statutory period, and a draft assessment plus attendant demand and penalty notices do not create an enforceable tax liability.

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Issues: Whether a notice of demand issued along with a draft assessment order under the procedure of Section 144C can be enforced where no final assessment order has been passed by the Assessing Officer within the time prescribed under Section 144C(13) of the Income-tax Act, 1961.

Analysis: The petition raises a single substantive question concerning the operation of Section 144C(13) which mandates completion of the assessment in conformity with the Dispute Resolution Panel's directions within one month from the end of the month in which the directions are received. The factual matrix shows that directions of the Dispute Resolution Panel were received in September 2021 and therefore the Assessing Officer was statutorily required to pass the final assessment on or before October 31, 2021. No final assessment was passed within that period. The statutory prescription in Section 144C(13) operates notwithstanding Sections 153 and 153B, and is intended to be mandatory to ensure expeditious completion of assessments following DRP directions. Authoritative precedents have held that failure to complete assessment within the period under Section 144C(13) results in lapse of jurisdiction and that internal administrative difficulties or technical glitches in departmental systems cannot extend a statutory limitation. The respondents' explanation that ITBA technical errors prevented passing the final order does not furnish a statutory basis for extending the period prescribed by Section 144C(13). As the final assessment was not completed within the prescribed time, the draft order did not crystallize any enforceable tax liability and the notice of demand issued with the draft order lacked legal foundation.

Conclusion: The demand notice dated March 16, 2021 issued along with the draft assessment order and the penalty notice under Section 274 read with Section 270A are quashed and set aside; the petition is allowed and the decision is in favour of the assessee.

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