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TaxTMI 
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2023 (5) TMI 31
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....acts and in the circumstances of the case and in law, the order dated 1 November 2019 passed by the Additional Commissioner of Income-tax (Transfer Pricing)-1(3) ("Transfer Pricing Officer") under Section 92CA of the Act is beyond the time limit prescribed under section 92CA(3A) r.w.s. 153 of the Act thus making the transfer pricing order illegal, bad in law, null and void and liable to be quashed. 1.2 On the facts and in the circumstances of the case and in law, the transfer pricing order being illegal and void on account of being barred by limitation in terms of section 92CA(3A) r.w.s 153 of the Act, the action of the Assessing Officer in passing the draft assessment order dated 24 December 2019 is without jurisdiction and hence, the final assessment order dated 31 March 2021 and all proceedings consequent to the draft assessment order are also illegal and bad in law and liable to be quashed." 2 Since the Ground No.1 raised by the Appellant goes to the root of the matter, we proceed to first adjudicate the same. 3 The relevant facts in brief are that the Appellant filed return of income for the Assessment Year 2016-17 on 29/11/2016, which was selected for complete scrutiny ....
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..... He vehemently contended that even if for the sake of arguments it is presumed that there was a delay of 1 day in passing the order by the Transfer Pricing Officer, the same does not, in any manner, causes any prejudice to the Appellant. In this regard, the Learned Departmental Representative relied upon the judgment of the Hon'ble High Court of Jharkhand in the case of M/s Prakash Lal Kahndelwal vs. CIT, Ranchi (Jharkhand) and ITO Ward-2, Ranchi (Jharkahnd) [W.P.(T) No. 1901 of 2022, dated 21/02/2023]. He further submitted that for the purpose of determining whether an assessee is an "Eligible Assessee" for the purpose of section 144C(15)(b) of the Act, all that is required to be seen is whether the Transfer Pricing Officer has proposed any variation in the order passed under Section 92CA(3) of the Act. The fact that the variation proposed by the Transfer Pricing Officer is subsequently set-aside/deleted or that the order passed by the Transfer Pricing Officer is subsequently held to be invalid, would not result in change of status of an assessee from Eligible Assessee to an assessee who is not an Eligible Assessee. He further contended that in case, the contention raised by the ....
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....CIT vs. Saint Gobain India Pvt. Ltd. : 444 ITR 636 (Madras) wherein it has been held as under: "29. The language employed is simple. 31-12-2019 is the last date for the assessing officer to pass his order under section 153. The TPO has to pass order before 60 days prior to the last date. The 60 days is to be calculated excluding the last date because of the use of the words "prior to" and the TPO has to pass order before the 60th day. In the present case, the word "before" used before "60 days" would indicate that an order has to be passed before 1-11-2019 i.e on or before 31-10-2019 as rightly held by the Learned Judge. 30. Even considering for the purpose of alternate interpretation, the scope of section 9 of the General Clauses Act, it is to be noted that an inverted calculation of the period of limitation takes place here. If the last date is taken to be the first date from which the period of 60 days is to be calculated, reading down the provision with the use of the word "from", which denotes the starting point or period of direction in general parlance, would mean that 60 days "from the last date". Even going by section 9 of the General Clauses Act, when the word "from"....
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.... into operation. Therefore, it is very clear that once a reference is made, it would have an impact on the assessment unless a decision on merits is taken by DRP rejecting or varying the determination by the TPO. 33. It would only be apropos to note that as per proviso to section 92CA (3A), if the time limit for the TPO to pass an order is less than 60 days, then the remaining period shall be extended to 60 days. This implies that not only is the time frame mandatory, but also that the TPO has to pass an order within 60 days. 34. Further, the extension in the proviso referred above, also automatically extends the period of assessment to 60 days as per the second proviso to section 153. 35. Also, but for the reference to the TPO, the time limit for completing the assessment would only be 21 months from the end of the assessment year. It is only if a reference is pending, the department gets another 12 months. Once reference is made and after availing the benefit of the extended period to pass orders, the department cannot claim that the time limits are not mandatory. Hence, the contention raised in this regard is rejected. 36. xx xx 37. xx xx 38. In case of assessme....
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.....2018 2. Extension of period of limitation in case reference is made u/s 92CA 12 months 3. Therefore, Assessment proceedings should be completed on/or before 31.12.2019 4. Date prior to the date on which period of limitation expired (stated in Sr. No. 3 above) 30.12.2019 5. Sixty day period expired on December = 30 days (excluding 31.12.2019) November = 30 days 01.11.2019 6. Transfer Pricing Order u/s 92CA(3) of the Act should have been passed on/or before 31.10.2019 7. Transfer Pricing Order u/s 92CA(3) actually passed on 01.11.2019 7. On perusal of the above it can be seen that the time limit for passing the order under Section 92CA(3) of the Act, computed as per the above judgements of the Hon'ble Madras High Court expired on 31/10/2019. Since the order under section 92CA(3) of the Act has been passed 01/11/2019, i.e., after the expiry of the period of limitation, the same is set aside as being barred by limitation. 8. The next issue that arises for consideration is whether the Final Assessment Order passed on 31/03/2021 is barred by limitation and bad in law. 9. In this regard, we note that the Mumbai Bench of the Tribunal has, in the case of Mondelez Indi....
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.... the Act, as it stood applicable for the AY 2012-13, provided a time limit of 3 years from the end of AY 2012-13 for completion of assessment under section 143(3) of the Act, i.e., on or before 31 March 2016. 44. In such a case if the Ld. AO invokes the provisions of section 144C of the Act and passes the final assessment order after 31 January 2016 i.e. beyond the period of limitation as stated above, such final assessment order u/s 143(3) r.w.s 144C of the Act is liable to be quashed as being barred by limitation. 45. In a recent decision of the Hon'ble Madras High Court in case of Virtusa Consulting Services Put. Ltd [TS-474-HC-2022(MAD)] dated 9 June 2022, it has been held in context of period of limitation under section 153 of the Act as under: "17. Further, it is to be noted that the different timelines to be adhered by the TPO, Assessing Officer to pass a draft order, assessee to file their objections, DRP to issue directions and the assessing officer to pass final order, would commence only on a reference to the TPO and not otherwise. At this juncture, it is not to be forgotten that the period of 33 months is to pass the final order of assessment after the direc....