A Two-judge bench of Justice B.V. Nagarathna and Justice Ujjal Bhuyan of Supreme Court have restricted the ruling of Bombay High Court on the prevailing time limit of Rs. 153 over Section 144C of the Income Tax Act as the precedent until further orders.
The Respondent, Shelf Drilling Ron Tappmeyer Limited, is a company incorporated under the relevant laws of Cayman Island and headquartered in Dubai, United Arab Emirates. Petitioner is engaged in the business of shallow water drilling for clients engaged in the oil and gas industry.
A Division Bench of Justices Firdosh P Pooniwalla and KR Shriram of Bombay High Court observed that “In our view, the assessment has to be concluded within twelve months as provided in Section 153(3) of the Income Tax Act when there has been remand to the AO by the ITAT under Section 254 of the Income Tax Act. Within this twelve-month prescribed, the AO has to ensure that the entire procedure prescribed under Section 144C of the Income Tax Act is completed and pass a final assessment order.”
According to the Bombay High Court “The object is to conclude the proceedings as expeditiously as possible. There is a limit prescribed under the statute for the AO and therefore, it is his duty to pass an order in time. After 30th September 2021, the AO will have no authority to pass any final assessment order in this Case”.
The Supreme Court stated that “We have heard learned Additional Solicitor General for the petitioners and learned Senior Counsel Shri J.D. Mistri for the respondent-assessee. Having heard the respective senior counsel for the parties, we observe that the impugned judgment shall not be cited as a precedent in any other subsequent matter until further orders.”
The apex court also clarified that that the operative portion of the judgment shall apply only insofar as the respondents herein are in question.
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