Limitation under section 153 in transfer pricing matters: remand for verification and giving effect orders both failed as time-barred.

Where the Tribunal had remanded the advances to associated enterprises issue for factual verification, the resulting action was treated as falling under section 153(3) of the Income-tax Act, 1961; where it had already given a conclusive finding on corporate guarantee commission, the Assessing Officer was only required to give effect under section 153(5). In both situations, the impugned assessment orders were passed beyond the applicable limitation period and were therefore held time-barred. The same limitation reasoning was applied to the assessment year involving corporate guarantee and outstanding receivables, and the consequential orders were struck down, leaving the substantive transfer pricing grounds undecided.

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Issues: Whether the assessment and consequential orders passed on 06.12.2024 were barred by limitation under section 153 of the Income-tax Act, 1961, having regard to the nature of the Tribunal's earlier directions on transfer pricing adjustments and the distinction between a fresh assessment and a mere giving effect order.

Analysis: The Tribunal held that where its earlier order had remanded the issue of advances to associated enterprises for verification of evidence, the resulting action required examination of records and therefore fell within section 153(3) of the Income-tax Act, 1961. By contrast, where the Tribunal had already given a conclusive finding on the rate of corporate guarantee commission, the Assessing Officer was only required to give effect to that finding, attracting section 153(5) of the Income-tax Act, 1961. On both counts, the impugned orders were passed beyond the applicable limitation period. The same reasoning was applied to the assessment year involving corporate guarantee and outstanding receivables, and the order was held to be time-barred. Once the assessments were struck down on limitation, the remaining grounds were not adjudicated.

Conclusion: The Tribunal held that the impugned orders were barred by limitation and could not survive.

Final Conclusion: All three appeals succeeded because the consequential assessment orders were set aside as time-barred, leaving the substantive transfer pricing grounds unanswered.

Ratio Decidendi: Where a superior forum remands an issue for factual verification, the time limit under section 153(3) applies; where the forum has already recorded a conclusive finding and only ministerial effect is required, section 153(5) applies, and orders passed beyond the applicable statutory period are invalid.

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