TaxTMI 
TaxTMI 
2026 (3) TMI 1193
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion Panel. The petitioner challenges the action of the Income Tax Authorities in seeking to enforce a demand purportedly arising from a notice of demand dated March 16, 2021 issued under Section 156 of the Act. The said demand was issued along with a draft assessment order under Section 144C(1) for the assessment year 2017-18. The grievance of the petitioner is that although a draft order was issued and objections were duly filed before the Dispute Resolution Panel, no final assessment order was ever passed within the statutory time limit prescribed under Section 144C(13). In such circumstances, it is contended that no enforceable demand exists in law and the attempt of the authorities to recover the alleged tax liability is wholly without ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... e-Assessment Centre were duly informed about the filing of such objections. 4. The Dispute Resolution Panel thereafter issued its directions on August 31, 2021 under Section 144C(5). The directions were received by the authorities in September 2021. Pursuant thereto, the Transfer Pricing Officer passed an order dated October 29, 2021 giving effect to the directions of the Dispute Resolution Panel and reducing the transfer pricing adjustment from Rs. 41,13,22,617/- to Rs. 29,94,72,101/-. However, despite the issuance of such directions, the Assessing Officer did not pass any final assessment order completing the assessment in conformity with the directions of the Dispute Resolution Panel. 5. The statutory scheme governing limitation f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctober 31, 2021. Admittedly, no such order was passed. 7. Despite the absence of a final assessment order, the Income Tax Department proceeded to enforce the demand which had been raised by the notice dated March 16, 2021 issued along with the draft order. The petitioner received several communications between February 2022 and January 2023 calling upon it to make payment of the alleged demand. Thereafter, further intimations were issued proposing adjustment of the said demand against refunds due to the petitioner for other assessment years. The petitioner repeatedly objected to such communications and also lodged grievance petitions through the online portal. However, no relief was granted and the demand continued to be reflected as out....
X X X X Extracts X X X X
X X X X Extracts X X X X
....114 (Ker) (IBS Software Services Pvt. Ltd. v. Union of India), and (2025) 481 ITR 767 (Bom) (Principal Commissioner of Income Tax v. Sterling Oil Resources Ltd.), wherein it has been consistently held that the time limit prescribed under Section 144C(13) is mandatory and that failure to pass the final assessment order within the prescribed period results in lapse of jurisdiction. 10. In response, the respondents have sought to explain the failure to complete the assessment on the ground that certain technical glitches occurred in the ITBA system. According to the respondents, while issuing the draft order on March 16, 2021 the functionality meant for passing the final assessment order was inadvertently used instead of the functionality m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....riod of limitation prescribed by statute. In the judgments relied upon by the petitioner, it has been clearly held that authorities cannot ignore or bypass the period of limitation prescribed in Section 144C(13) to complete the assessment. 13. The reliance placed by the respondents upon the decision of the Supreme Court reported at (2025) 177 taxmann.com 262 (SC) (Assistant Commissioner of Income-tax (International Taxation) v. Shelf Drilling Ron Tappmeyer Ltd.) is misplaced. The controversy in that case concerns the interplay between the time limit prescribed under Section 153 and the procedure contained in Section 144C, particularly whether the entire process under Section 144C must fall within the overall limitation prescribed in Sect....