In the case of CIT v. Roca Bathroom Products Pvt Limited and another (WA.1517 of 2021 etc. batch), a Division Bench of Madras High Court consisting of the Hon’ble Mr. Justice R.Mahadevan and the Hon’ble Mr. Justice J.Sathya Narayana Prasad, rendered a noteworthy judgment touching the issues related to limitation for passing final orders and defining the reasonable time for the same and issued the following directions:
In the case of CIT v. Roca Bathroom Products Pvt Limited and another (WA.1517 of 2021 etc. batch), a Division Bench of Madras High Court consisting of the Hon’ble Mr. Justice R.Mahadevan and the Hon’ble Mr. Justice J.Sathya Narayana Prasad, rendered a noteworthy judgment touching the issues related to limitation for passing final orders and defining the reasonable time for the same and issued the following directions:
(a) The provisions of Sections 144C and 153 are not mutually exclusive, but are rather mutually inclusive. The period of limitation prescribed under Section 153 (2A) or 153 (3) is applicable, when the matters are remanded back 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 denova 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 limits prescribed,
(f) The non-obstante clause would not exclude the operation of Section 153 as a whole. It only implies that irrespective of availability of larger time to conclude the proceedings, final orders are to be passed within one month in line with the scheme of the Act,
(g) When no period of limitation is prescribed, orders are to be passed within a reasonable time, which in any case cannot be beyond 3 years. However, when the statute prescribes a particular period within which orders are to be passed, then such period, irrespective of whether it is short or long, shall be applicable.
The aforesaid directions will resolve all the legal implications with regard to the limitation aspects.
