A Division Bench of the Delhi High Court ruled that the period prescribed under Section 153(3) of the Income Tax Act, 1961 is to be computed from the date of receipt of the order from the Income Tax Appellate Tribunal ( ITAT ).
The first respondent passed a Final Assessment Order upholding the adjustments as referred to hereinabove. This came to be assailed by the petitioner by filing an appeal before the Income Tax Appellate Tribunal6 on 02 March 2016. The ITAT by its order of 20 December 2018 set aside the Final Assessment Order and remitted the matter back to the AO and TPO for re-adjudication.
Pursuant to the directions framed by the ITAT, the TPO passed an order under Section 92CA of the Income Tax Act. Despite the said order having been duly made and pronounced, it is the case of the writ petitioner that Final Orders of Assessment were not framed by the respondents within the time frame as prescribed under Section 153(3) of the Income Tax Act. The order of assessment ultimately came to be passed on 13 February 2023.
The solitary submission which appears to have been made at the behest of the respondents was of the period of limitation being liable to be computed as commencing from the date when the SLP was dismissed by the Supreme Court and consequently from 29 October 2020.
The Court of Justices Yashwant Varma and Purushaindra Kumar Kaurav observed that “The period prescribed under Section 153(3) of the Act would thus have to necessarily be computed from the date when the order of the ITAT was received by the respondents. Even if the benefits of TOLA were extended to the respondents, undisputedly, the order of assessment was liable to be framed lastly by 30 September 2021.”
“We accordingly allow both the writ petitions and quash the impugned order dated 13 February 2023. The respondents are hereby directed to re-compute the refund payable to the writ petitioner along with statutory interest which shall run up to the date of remittance in accordance with law. The order of refund shall also bear in consideration our decision having annuled the adjustments that were made with respect to AYs 2008-09, 2009-10 and 2010-11 against a perceived outstanding demand for AY 2011-12” the Bench ordered.
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