All Six Income Tax Final Assessment Orders Passed Beyond Limitation u/s 144C: ITAT Quashes Proceedings Against Coca-Cola India [Read Order]
ITAT quashed six income tax assessment orders against Coca-Cola India Inc. after holding that they were passed beyond the limitation period
The Delhi bench of the Income Tax Appellate Tribunal quashed income tax proceedings against Coca-Cola India Inc. because all six final assessment orders were passed beyond the legal time limit under Section 144C read with Section 153 ofthe Income Tax Act, 1961.
Coca-Cola India Inc. were assessed under international taxation provisions. For the relevant years, the Assessing Officer issued draft assessment orders under Section 144C and later passed final assessment orders under Section 144C(13).
The assessee challenged these orders, saying they were time-barred. Before the Tribunal, the assessee argued that the limitation under Section 144C must be read together with Section 153. The assessee relied on the Madras High Court ruling in CIT v. Roca Bathroom Products (P) Ltd. They argued that DRP proceedings are part of the assessment process. The assessee stated that in all six years, the final orders were passed after the allowed limitation period.
The Revenue opposed the appeals and argued that Section 144C is a complete code with separate timelines. The Department claimed that Section 153 does not apply due to the non-obstante clause. The Revenue also said the issue is pending before a Larger Bench of the Supreme Court and should not be decided now.
The two-member bench comprising Vikas Awasthy (Judicial Member) and Sanjay Awasthi (Accountant Member) considered arguments from both sides and examined the record. The tribunal observed that the Roca Bathroom Products judgment has not been stayed or reversed by the Supreme Court. The tribunal observed that pendency before the Supreme Court does not stop adjudication when there is no stay. The tribunal explained that the DRP process does not extend the outer time limit under Section 153.
The tribunal pointed out that the non-obstante clause only fixes a one-month period to pass the final order after DRP directions. The Tribunal rejected the Revenue’s claim that Section 144C operates independently.
After examining the dates, the Tribunal found that all six final assessment orders were passed beyond limitation. The Tribunal held that the orders were invalid in law. The tribunal quashed all six assessment orders. The tribunal allowed all six appeals filed by Coca-Cola India Inc. The tribunal did not examine other grounds on merits. The Tribunal allowed the Revenue to revive the appeals if the Supreme Court later takes a different view.
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