Relief to Honda India: ITAT quashes Income Tax Assessment Order passed beyond Limitation Period u/s 144C [Read Order]

The Income Tax Appellate Tribunal (ITAT), Delhi Bench quashed an assessment order passed by Assessment officer (AO) against Honda India Power Products Ltd, and held that the assessment order was beyond the period of limitation under section 144C read with section 153 of the Income Tax Act, 1961.

The appellant, Honda India Power Products Ltd, filed an appeal challenging the validity of the assessment order on the ground of limitation.

Neeraj Jain, the counsel for the appellant submitted that the determination of limitation period for passing the final assessment order would be as per section 153 of the Act. It was contended that the final assessment order passed by the AO was beyond the stipulated deadline as per section 153 of the Act.

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The actual date of passing the final assessment order was on 31.07.2022. As per section 144C read with section 153 of the Income Tax Act, the due date for passing the final order was on 30.09.2021. Therefore, the actual order was passed after the limitation period.

Dharm Veer Singh, respondent counsel contended that the Supreme Court of India has examined the issue regarding the limitation period for orders passed under Section 144C and has noted a divergent opinion on the issue, with the matter referred to a larger Bench.

The respondent counsel also submitted that the issue is highly contentious and is pending before the Supreme Court. Thus, deciding the limitation issue would result in multiplicity of proceedings and would lead to uncertainty in tax administration.

The Bench of Vikas Awasthy, judicial member and Sanjay Awasthi, accountant member, noted that the final assessment order passed by the AO was beyond the period of limitation for passing the order u/s 144C(13) r.w.s. 153 of the Act.

The tribunal relied upon the decision of a coordinate Bench in Li and Fung (India) Pvt Ltd, (2026) where the tribunal held that the “provisions of Sections 144C and 153 are not mutually exclusive, but are rather mutually inclusive. The period of limitation prescribed under Section 153 (2A) or 153 (3) is applicable when the matters are remanded back irrespective of whether it is to the Assessing Officer or TPO or the DRP, the duty is on the assessing officer to pass orders”.

Accordingly, the Tribunal held that the limitation expired on 30.09.2021 and therefore quashed the order passed by the AO and allowed the parties to revive the appeal upon the decision of the Supreme Court.

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