The Income Tax Appellate Tribunal (ITAT) at Delhi recently granted relief to Hyundai Rotem, declaring that a delay in assessment following the dispatch of the Dispute Resolution Panel (DRP) order shall result in an Assessment Order that is null and Void.
The Petitioner Hyundai Rotem is the manufacturing offshoot of South-Korean Hyundai Motor Group and is engaged in the production of all kinds of railway vehicles such as electric multiple units, high speed trains, light rail vehicles, locomotives and passenger coaches, car manufacturing systems and environment plants.
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Hyundai Rotem’s return of income declaring a total income of Rs. 13,64,92,120/- was selected for scrutiny through Computer-Assisted Scrutiny Selection (CASS). The matter was then referred to the Transfer Pricing Officer (TPO) for the determination of Arm’s Length Price.
Subsequently, the jurisdictional Assessing Officer (AO) passed a draft assessment order estimating the Petitioner’s income at Rs.21,01,26,630/-, which was objected before the DRP, but was to no avail.
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Pursuant to directions by the DRP order dated 24.05.2022, the AO passed a final assessment order dated 01.07.2022, against which the present appeal has been preferred.
Ananya Kapoor, appearing for the Assessee submitted before ITAT that the Assessment Order is bad in law owing to the bar of limitation and thus non est in law. The Authorized Representative referenced the decision of the Delhi High Court in PCIT vs. Fiberhome India P. Ltd. (2024) where it was held that timelines under Section 144C(13) of the Income Tax Act, 1961 are mandatory in nature.
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Conversely, Z H Tanweer, appearing for the Revenue averred that the physical communication regarding the Order by the DRP was received by the Revenue only on 01.06.2022. Furthermore, the counsel submitted that the manual orders uploaded by the DRP are not visible to the AO, hence not being notified about new inclusiosn in the Income Tax Business Application (ITBA) portal.
The ITAT Bench composed by M. Balaganesh, Accountant Member And Shri Vimal Kumar, Judicial Member, observed that a cohesive reading of Section 130 and 144B of the Act read together with Section 13 of the Information Technology Act, 2000 indicates that dispatch by the DRP is deemed to be complete the moment the concerned document is uploaded by the DRP onto the ITBA Portal.
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The Bench held that the fact that the National e-Assessment Centre (NeAC) held onto the order before passing it onto the AO does not warrant any statutory extension of the allocated time limit under 144C(13) of the Act for framing the final assessment.
The ITAT observed that the decision of the ITAT Delhi Bench in Nikon India Private Ltd. vs. ACIT (2024) is squarely applicable to the present case. It was held that Section 13 of the Information Technology Act, 2000 along with Section 144B of Income Tax Act, 1961 may be applicable while ascertaining the time of uploading DRP order by the DRP onto the ITBA Portal.
Since it has was unambiguously laid down that the date of uploading DRP Order on ITBA Portal is 26.05.2022, it was statutorily required that the final assessment be completed on or before 30.06.2022. Identifying that the assessment was completed only on 01.07.2022, the ITAT ruled such assessment to be null and void, setting aside the order in relief to the Assessee.
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