TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 319
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....rwal, AR (Virtual) For the Revenue : Shri Dharm Veer Singh, CIT DR ORDER PER SANJAY AWASTHI, ACCOUNTANT MEMBER: 1. The present adjudication involves five assessees as under: 1) Corteva AgriScience India P. Ltd. (AY 2018-19) 2) Pesolkelly India P. Ltd. (AY 2021-22) 3) Smart Cube India Ltd. (AY 2017-18) 4) OSG minerals P. Ltd., with a Stay Application (AY 2021-22) 5) Qualcomm India P. Ltd. (AY 2016-17) In all these appeals the assessees have challenged the validity of the assessment order on the ground of limitation considering the provisions of section 144C(13) r.w.s. 153 of the Income Tax Act, 1961 (hereafter as "the Act").Since all these appeals involve the common issue of limitation, hence, they are being disposed of through a single order. 1.1. The challenge to the validity of the impugned order arises from the case of Commissioner of Income Tax vs. Roca Bathroom Products (P) ltd. reported in 445 ITR 537 (Mad.), Sections 144C and 153 are mutually inclusive and not mutually exclusive as both contain provisions relating to section 92CA and are interdependent and overlapping and hence, period of limitation prescribed un....
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....22.09.2023, that the operative portion of the judgment delivered by the Hon'ble Bombay High court [153 taxmann.com 162 (Bom)] would not be cited as a precedent. This interim order dated 22.09.2023 was placed before us for perusal. It was the further submission that in light of the said order passed by the Hon'ble Apex Court it would not be in the interest of judicial propriety to proceed with an identical matter. The Ld. DR further pointed out that the judgment of Hon'ble Bombay High Court in the case of PayPal Payments P. Ltd. in Writ Petition (L) No.30944 of 2023 decided on 13.08.2024, that the Hon'ble Bombay High Court refused to entertain the writ petition involving identical issue after taking note of the fact that the Hon'ble Apex Court stayed the operative part of the judgment in the case of Shelf Drilling (supra). The Ld. DR further referred to the decision of Hon'ble Supreme Court in the case of UP Rashtriya Chini Mill Adhikari Parishad Lucknow vs. State of U.P. & Others reported as (1995) AIR SC 2148, to argue that when an issue is referred to a larger Bench then during the pendency of such reference, matters involving identical issues should not be taken up for adjudicat....
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....he impugned judgment shall not be cited as a precedent in any other subsequent matter until further orders. We also clarify that the operative portion of the judgment shall apply only insofar as the respondents herein are in question" This interim order has not been vacated or modified and continues to bind all courts, tribunals and judicial authorities in India. Interim orders subsist unless expressly vacated. 7. From the language used by Hon'ble Supreme Court in its interim order, it is evident that it is the ration, reasoning or basis of judgement of Hon'ble High Court of Bombay in case of Shelf Drilling (supra) which can not form basis for decision on the same issue in any other case including instant appeals. In other words, it is not only that above judgment in case of Shelf Drilling can not be used as precedent in any other case, but also the reasoning given in judgement of Bombay High Court in case of Shelf Drilling Ron Tappmeyer Ltd or similar reasoning given in any other case including in the judgment of Madras High Court in case of Roca Bathroom Products (P.) Ltd cannot form basis for deciding the above issue of time limitation. Any suc....
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....on, and the correctness of the Madras High Court judgment stands squarely under scrutiny. The order granting leave neither affirm the High Court's view, nor does it declare law. Once leave is granted, the High Court judgment loses finality. 11. It is respectfully. submitted that the ratio laid down by the Hon'ble Bombay High Court in Shelf Drilling Ron Tappmeyer Ltd. and by the Hon'ble Madras High Court in Roca Bathroom Products (P.) Ltd. arises on the same legal controversy, namely the computation of limitation involving the interplay of sections 144C and 153. The principle enunciated in both decisions is, in substance, identical-i.e., that the timelines under section 153 continue to govern and must subsume the DRP mechanism under section 144C. In this context, it is material that the Hon'ble Supreme Court has passed a specific interim direction that the judgment of the Hon'ble Bombay High Court in case of Shelf Drilling shall not be cited as a precedent in any other subsequent matter. The Revenue, therefore, submits that, when the Supreme Court has expressly restrained reliance on the Shelf Drilling ratio, the same ratio cannot be permitted to be appl....
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....has already passed certain reported orders following the Roca Bathroom case (supra): i. Aveva Solutions India LLP vs. ITO, 180 taxmann.com 731 (Hyd-Trib.); ii. Western UP Tollway Ltd. vs. DCIT, 181 taxmann.com 406 (Hyd-Trib); & iii. Hindustan Zinc Ltd. vs. ACIT, ITA No.623/JODH/2024 decided on 03.01.2025 5. At this stage it deserves to be mentioned that in a Coordinate Bench decision rendered by this very same combination, in ITA Nos.180/Del/2022 and ITA No.3819/Del/2024, in the case of Li & Fung (India) P. Ltd., vide order dated 21.01.2026, the arguments of the Ld. DR and from the assessee's side have been discussed and recorded at length. Since the surrounding facts and circumstances are similar, hence, the operative portion of this Coordinate Bench order deserves to be extracted as under: - "5. Both sides heard. The issue which arises for consideration before us at the preliminary stage is whether we can proceed with the hearing of issue in appeal when on a similar issue the operative portion of the judgment passed by the Hon'ble High Court in the case of Shelf Drilling Ron Tappmeyer Ltd. (supra) has been stayed by the Hon'ble Supreme Court....
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.... assessee has not placed reliance on the judgment rendered in the case of Shelf Drilling (supra) but has pleaded its case following the decision rendered in the case of Roca Bathroom Products P Ltd. (supra) in which there is no stay order. Therefore, in our humble opinion there is no impediment in hearing the appeal of the assessee on the issue of "limitation in passing the final assessment order with reference to the provisions of section 144C r.w.s. 153 of the Act". Thus, the preliminary objection raised by the Department is rejected. 7. On merits the ld. DR has made following written submissions:- "C. Revenue's submissions on merit of the limitation issue-interplay of sections 144C and 153 of the Act (without prejudice to earlier arguments): 13. Without prejudice to the prayer for deferral of present appeals, the Revenue respectfully submits that time limits given in section 153 of the Act are independent of those provided under section 153 of the Act. The legislative design of section 144C indicates that it is a special self-contained code in itself with regard to assessment of eligible assessee and prescribes entire procedure and time line for th....
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....d availing benefit of expeditious and easier disposal of disputes provided by the code, contend that the assessment becomes void due to the time consumed in the process statutorily created for benefit of assessee. 18. In case, interpretation provided by the assessee is accepted, then it would lead to many absurdities in operation of 144C provisions. Firstly, at the stage of passing of draft assessment order, it is not known to the A.O. as to whether the assessee would choose DRP route or not. If the interpretation furthered by the assessee is accepted, then in every case of eligible assessee, which involved issue of draft assessment order, the AO would be required to pass draft assessment order at least 11 months before the time barring date prescribed under section 153 of the Act irrespective of the fact whether the assessee chooses DRP route or not. If Assessee does not choose DRP route, then while on one hand, such early finalization of assessment cuts down time available with the AO to pass assessment order affecting level of inquiries/verifications, on the other hand the DRP route would go unutilized. This contradiction itself shows that interpretation of section 144C....
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....rging section and to make the machinery workable. Further, in case of W TRamsey Ltd v Inland Revenue Commissioners (1981) 1 All ER 865, it has been held that the context, scheme of the relevant Act as a whole and its purpose are as relevant in construing a taxing Act as in construing any other Act. (Source: Principles of Statutory Interpretation by Justice G P Singh, 15^th Edition, page 629, 639). 20. Non applicability of judgement in the case of Roca Bathroom Products P. Ltd [2022] 140 taxmann.com 304 (Madras)- In the case of Roca Bathroom, the assessment years involved were A.Y. 2009-10 and 2010-11 and there issue involved was relating to section 153(2A) of the Act and there was inordinate delay on the part of the Department in passing final assessment order during set aside proceedings. Hence, that judgement was passed in its own peculiar facts and would not be applicable to any other case not involving such inordinate delay. As highlighted in para 18 above, that if the interpretation as argued by the assessee is accepted, then it would create a situation where in some of the assessment years in many cases, time available with the AO to pass final assessment ye....
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....ive as both contain provisions relating to section 92CA of the Act and are inter-dependent and are overlapping. Hence, the period of limitation for passing the final assessment order u/s.144C(13) of the Act has to be determined with reference to section 144C r.w.s 153 of the Act. For the sake of completeness, the relevant excerpts from the judgment rendered in the case of Roca Bathroom Products P. Ltd. (supra) are reproduced herein below:- "18. The main contentions of the Department, through their counsel are that Section 144C is a code in itself and hence on remand by the ITAT, the power of DRP to take up the dispute on additions by TPO, is not circumscribed by Section 153 and that in the absence of any express time limits contemplated under the Act, the time limits under Section 153 for reassessment cannot be read into Section 144C more particularly when the provisions of Section 153 are excluded by the non-obstante clause in section 144C(13) and hence the proceedings are not barred by limitation. Per contra, it has been contended by the learned senior counsels appearing for the respondent(s)/assessees that the outer time limit under Section 153 is applicable to every pr....
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....ention of the learned senior panel counsel for the appellants/ revenue that the time period of 33 months, provided initially is for the draft order and not for the final order. A careful perusal of the timeline would indicate that the time limit is for the final assessment and not for the draft order. The anomaly in the argument is that in the present cases, no fresh draft order was passed, but the DRP had issued the notices. If the contention of the appellants / revenue was to hold some water, they must have passed the draft assessment order immediately on receipt of the order from the Tribunal, but instead, notice was issued by the DRP. In any case, it is a far cry for the revenue as because no order has been passed for more than 5 years. 21. As held above, the assessment has to be concluded within 21 months when there is no reference and when there is a reference, it has to be concluded within 33 months. In the additional 12 months, the draft order is to be passed, the objections have to be filed, the DRP has to issue the directions and the final order is to be passed. The provisions under section 144C and section 153 are not mutually exclusive as both contain provision....
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....d transfer pricing and it is for this reason that specific timelines have been drawn within the framework of section 144C to ensure prompt and expeditious finalisation of this special assessment. 16. The purpose is to fast-track a specific type of assessment. This does not however lead to the conclusion that overall time limits have been eschewed in the process. In fact, the argument to the effect that proceedings before the DRP are unfettered by limitation would run counter to the avowed object of setting up of the DRP a high powered and specialised body set up for dealing with matters of transfer pricing. Having set time limits every step of the way, it does not stand to reason that proceedings on remand to the DRP may be done at leisure sans the imposition of any time limit at all. 17. Sub-section (13) to section 144C, in my view, imposes a restriction on the Assessing Officer and denies him the benefit of the more expansive time limit available under section 153 to pass a final order of assessment as he has to do so within one month from the end of the month when the directions of the DRP are received by him, even without hearing the assessee concerned. ....
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.... irrespective of whether it is to the Assessing Officer or TPO or the DRP, the duty is on the assessing officer to pass orders. (b) Even in case of remand, the TPO or the DRP have to follow the time limits as provided under the Act. The entire proceedings including the hearing and directions have to be issued by the DRP within 9 months as contemplated under section 144C(12) of the Income-tax Act, (c) Irrespective of whether the DRP concludes the proceedings and issues directions or not, within 9 months, the Assessing officer is to pass orders within the stipulated time, (d) In matter involving transfer pricing, upon remand to DRP, the Assessing officer is to pass a denovo draft order and the entire proceedings as in the original assessment, would have to be completed within 12 months, as the very purpose of extension is to ensure that orders are passed within the extended period, as otherwise the extension becomes meaningless. (e) The outer time limit of 33 months in case of reference to TPO under Section 153, would not refer to draft order, but only to final order and hence, the entire proceedings would have to be concluded within the time limit....