TaxTMI 
TaxTMI 
2026 (3) TMI 124
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....d DRP is barred by limitation. This goes to the root of the matter and hence the same is taken first for adjudication. 4. We have heard the rival submissions and perused the materials available on record. In this case, the return of income was filed for AY 2017-18 on 30.11.2017. The case was selected for scrutiny. A reference was made u/s 92CA(3) of the Act by ld AO to the ld TPO to determine the Arm's Length Price (ALP) of international transaction undertaken by the assessee. Accordingly, an order stood passed by the ld TPO u/s 92CA(3) of the Act on 29.01.2021. The draft assessment order was passed by the ld AO u/s 144C(1) of the Act on 09.04.2021. The directions were issued by the ld DRP u/s 144C(5) of the Act on 19.01.2022. Giving effect to the directions of the ld DRP, the ld TPO passed an order on 08.02.2022. Final assessment order was passed u/s 143(3) r.w.s. 144C(13) of the Act on 17.02.2022. The appeal was filed against this final assessment order before this Tribunal. This Tribunal restored the matter to the file of the ld DRP vide its order dated 28.07.2022. By this process, the second round of litigation got commenced. 5. The ld DRP vide email intimated the assesse....
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....assessment and recomputation. First, the sub-sections (1), (1A), (1B) and 2 of the Act start with a specific restrictive command highlighting the fact that beyond a particular period of time prescribed under the various sub-sections referred to above, the Assessing Officer is denuded of his powers to pass an assessment order. The aforesaid provisions of law i.e. sub-section (1), (1A), (1B) and 2 deal with the assessment, reassessment and recomputation in exercise of powers conferred upon the Assessing Officer. 19. The aforesaid provisions did not envisage a situation where there is an order of remand by the Appellate Tribunal or an Appellate Authority. It is precisely for this reason that sub-section (2A) stood enacted in respect of a situation where there is an order of remand with a direction to the Assessing Officer to pass a fresh assessment order. Sub-section (2A) starts with a non-obstante clause holding that notwithstanding anything contained in the aforesaid provisions i.e. sub-section (1), (1A), (1B) and 2 in the event of an order of fresh assessment ordered by the Appellate Tribunal or the Appellate Authority after setting aside or cancelling the earlier assessme....
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....ld not be any further required in the light of their contention and in the light of the subsequent amendment brought in to sub-section 3 of section 153. 22. Now we shall refer to certain judicial precedents on the said subject from different High Courts. The High Court of Gujarat in the case of Instruments & Control Co. (supra) in paragraph Nos.16.3, 17, 19, 21, 22 and 25 held as under: "16.3 We may notice that sub-section (2A) of section 153 was introduced by way of amendment by the Amendment Act, 1970 with effect from 1-4-1971. Correspondingly, the words "subject to the provisions of sub-section (2A)" were also added in sub-section (3) of section 153. 17. It can, thus, be seen that prior to introduction of sub-section (2A) of section 153, the Legislature provided for limitation for completion of assessments under sub-section (1) and sub-section (2) of section 153. Sub-section (3) of section 153, however, provided that the provisions of sub-sections (1) and (2) shall not apply to classes of assessments, reassessments and re-computations provided in clauses (i) to (iii) of sub-section (3) of section 153. Such classes included a case of fresh assessment ma....
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....n those cases where there is no need for a fresh assessment and are not covered under section (2A) of section 153 of the Act, but are covered under clauses (i), (ii) and (iii) of section 153, the limitation prescribed under sub-section (2A) of section 153 would not apply and the expression "assessment, reassessment and re- computation be completed at any time" may enable the revenue to continue the proceedings of assessment even beyond the period prescribed under sub-sections (1) and (2) of section 153 of the Act and would also not be hindered by the prescription of limitation under section (2A) of section 153 of the Act. 25. To our mind, the case on hand would fall under sub-section (2A) of section 153 of the Act. The Tribunal may not have used the words of "setting aside the assessment", nevertheless, when it remitted the matter back to the Assessing Officer for summoning two witnesses again for cross-examination by the assessee and permitted further probe to the Assessing Officer, necessarily it must be understood to have set aside the assessment under challenge. The Tribunal. otherwise in law, could not have remitted the proceedings to the Assessing Officer for fresh c....
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..... Clearly, the intention was not to restrict the applicability of sub-section (2A) only to such cases where the 'entire' original assessment order is set aside. It was noted that, "Under the existing provisions of section 153 (3), such fresh assessments are not subject to any time limit." Indeed, section 153, as it stood at that time, did not prescribe any time limits. Section 153 (3) (ii), in particular, did not require the order passed thereunder to be issued within any particular time limit. Further there is a distinction between an 'assessment' that is set aside and an 'assessment order' being set aside. When the assessment on an issue is set aside and the matter remanded, with a direction that the issue has to be determined afresh, section 153 (2A) of the Act would get attracted. 24. What is important to note is that, along with the insertion of sub-section (2A), sub-section (3) underwent a simultaneous change. It was expressly made "subject to the provisions of sub-section (2A)." This meant that section 153 (3) would thereafter apply only to such cases where section 153 (2A) did not apply. In other words, in all instances of an AO having to pa....