Delhi HC sets aside Time-Barred Income Tax Order against Hyundai Rotem [Read Order]

The Delhi High Court has dismissed an appeal filed by the Revenue, upholding a decision that a final assessment order passed against Hyundai Rotem Company was time-barred and therefore void.

The appellant, the Commissioner of Income Tax (International Taxation), challenged an order of the Income Tax Appellate Tribunal (ITAT) concerning the assessment year 2018-19. The respondent, Hyundai Rotem Company, a Korean company, had faced a transfer pricing adjustment.

The pivotal issue was the determination of the limitation period for passing the final assessment order under Section 144C(13) of the Income Tax Act. The dispute centered on whether the 'receipt' of directions from the Dispute Resolution Panel (DRP) occurred on the date they were uploaded to the ITBA portal ies May 26, 2022 or on the date the Assessing Officer claimed to have received the physical copy , June 1, 2022.

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Counsel for the Revenue argued that the case, being under International Taxation, was excluded from the Faceless Assessment Scheme, and thus the limitation period should be computed from the date of physical receipt. Per contra, counsel for the assessee contended that as per the E-Assessment Scheme, 2019, and Section 13 of the IT Act, the uploading of the DRP directions on the portal constituted valid service, and the limitation period commenced from that date.

A division bench comprising  Justice V. Kameswar Rao and Justice Vinod Kumar observed that the issue was no longer res integra. The court relied on its own precedent in Louis Dreyfus Company India Private Limited and the Bombay High Court's decision in Vodafone Idea Ltd. It held that once the DRP directions are uploaded to the portal with a Document Identification Number (DIN), they are deemed to be received by the Assessing Officer, and the limitation period under Section 144C(13) begins to run from that date.

Finding that the DRP directions were uploaded on May 26, 2022, the court held that the final assessment order passed on July 1, 2022, was beyond the statutory deadline of June 30, 2022, and consequently, time-barred. The court found no substantial question of law arose for consideration and dismissed the Revenue's appeal.

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