The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) while providing relief to Asus India quashed the assessment order passed under Section 144C (13) of Income Tax Act , 1961 due to brarred by the limitations.
The assessee, Asus India Private Limited engaged in the business of distribution of Asus Group products in India whereby it purchases Notebooks and Tablets from its associated enterprises and sales the product locally, it entered into several international transactions
A reference under Section 92CA of the Income Tax Act was made to the Transfer Pricing Officer (TPO) to verify the international transactions. Therefore (TPO) passed an order oN 01/11/2016 under Section 92CA(3) of the Income Tax Act by making an upward adjustment to the international transaction of Marketing Service Fees. Accordingly the AO pass assessment order along with making several disallowances and additions.
Aggrieved by the order, the assessee filed an appeal before the tribunal.
During the proceedings before the tribunal, the counsel for the asseseee argued that the Assessment order passed by the AO was time barred.
For Assessment Year 2013-14 time limit of completion of assessment was available of 33 months from the end of the assessment year. Therefore, the assessment should be completed on or before 31st December, 2016. Due to the involvement of TPO the time was extended again.
Thus, the TPO should have passed an order on or before 31/10/2016.However the TPO order was passed on 01/11/2016.
It was also contended that the TPO order and assessment order both are passed beyond the time limit.
Om Prakash, Department Representative submitted that the assessment order has not been barred by limitation but has passed within prescribed limit under Section 153 of the Income Tax Act.
The tribunal after reviewing the facts observed that the extended time limit available to the Assessing Officer for passing the final order in the present case is 33 months ending on 31st December, 2016. In this case, the period of limitation expires on 30th December, 2016.
Therefore, the bench observed that the AO passed the assessment order after expiring the limitation period.
Hence, the two member bench of tribunal comprising Prashant Maharishi (Accountant Member) and Kuldip Singh,( Judicial Member) allowed the appeal filed by the assessee and quashed the assessment order.
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