Order Passed by TPO Even After Delay of Just One Day is Illegal and Barred by Limitation | ITAT

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order u/s 92CA(3)

Case Details: Mahindra and Mahindra Ltd. v. Additional/Joint/Deputy/Assistant Commissioner of Income - [2023] 154 taxmann.com 194 (Mumbai-Trib.)

Judiciary and Counsel Details

    • Prashant Maharishi, Accountant Member & Sandeep Singh Karhail, Judicial Member
    • H.P. Mahajani, AR for the Appellant.
    • Manoj Kumar, CIT DR for the Respondent.

Facts of the Case

Assessee company was manufacturing Automobiles, engine parts and several other activities. It entered into several international transactions, and reference was made to TPO to determine the international transactions’ arm’s length price.

Assessing Officer passed draft assessment order under section 143(3) read with section 144C(1), wherein the adjustment on account of the arm’s length price of the international transaction was also included.

Dispute Resolution Panel passed an order on 26-3-2021. Based on this, the final assessment order was passed on 29-4-2021. The assessee challenged the validity of the assessment order stating that assessment order passed by the Assessing Officer was beyond the time limit prescribed under section 153.

ITAT Held

The Mumbai Tribunal held that for the assessment year 2016-17, the due date for passing final assessment order was 31-12-2018. If valid reference to the TPO is made, a further 12 months is available in terms of section 153(4) provision.

According to section 92CA(3A) provisions, the TPO has to pass an order under section 92CA(3), 60 days before the date on which the limitation period under section 153 expires. Accordingly, the due date for passing the order of assessment was 31-12-2019; consequently, the due date for passing the order of the TPO was 31-10-2019.

In this case, the TPO passed the order under section 92CA(3) on 1-11-2019. Therefore, the order passed by the TPO was beyond the time limit prescribed under section 92CA(3A), i.e., delayed by one day. Therefore, the order of the TPO was illegal as it was barred by limitation.

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