Karnataka HC Disposes Himalaya Drug Company Appeal as Assessment Held Time-Barred u/s 144C(13) of Income Tax Act [Read Order]

Himalaya Drug Company,petitioner-assessee, filed an appeal under Section 260A of the Income Tax Act challenging the tribunal’s order dated 04.07.2018 in IT(TP)A No. 807/Bang/2016. The High Court admitted the appeal (ITA No. 764/2018) to consider whether the tribunal had wrongly upheld a draft assessment order that was effectively final, and whether it was justified in treating the petitioner and certain overseas entities as associated enterprises under Section 92A.

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A connected appeal (ITA No. 835/2018) was filed by the Commissioner of Income Tax. It questioned the Tribunal’s deletion of a ₹31.69 crore transfer pricing adjustment on AMP expenses, its reliance on past rulings in similar cases, and its acceptance of Transactional Net Margin Method (TNMM) over the Cost Plus Method despite differences in functions, assets, and risks between domestic and export segments.

The petitioner had also argued that the tribunal’s order was time-barred under Section 144C(13), but that issue had already been decided against the petitioner in an earlier order dated 21.06.2017. The tribunal had then gone on to decide the matter on merits in the impugned order dated 04.07.2018.

The assessee counsel submitted that the issue regarding limitation, which had been rejected earlier by the Tribunal, was already considered in ITA No. 571/2017. He pointed out that the High Court had allowed that appeal through its judgment dated 04.06.2025, and therefore, the questions raised in the present appeal no longer required examination.

Counsel for the respondent, did not dispute this submission.

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Justice S.G.Pandit and Justice T.M.Nadaf noted that in an earlier judgment dated 04.06.2025 in ITA No. 571/2017, it had already held the assessment order to be time-barred under Section 144C(13) of the Income Tax Act. Since the order on merits was passed later, the Court held that examining it was not necessary.

As a result, the bench did not consider the legal questions raised by either side. It clarified that both parties were free to raise these issues in appropriate future proceedings, and all contentions remained open.

Both appeals were accordingly disposed of.

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