ITAT Quashes Assessment as Time-Barred Under Section 153

Teva Pharmaceutical & Chemical Industries India Pvt. Ltd. was subjected to a final assessment order dated 26.07.2024 for AY 2020-21, passed under Section 143(3) read with Sections 144C(13) and 144B of the Income Tax Act.

The assessee challenged the order on multiple grounds but pressed the preliminary issue of limitation. It contended that even after considering the reference to the Transfer Pricing Officer, the outer time limit under Section 153 expired on 30.09.2023, whereas the final assessment was passed nearly ten months later.

Main Issue: Whether a final assessment order passed under Section 143(3) read with Section 144C(13) beyond the outer time limit prescribed under Section 153 is barred by limitation, notwithstanding pending Supreme Court proceedings on the same question of law.

Tribunal’s Decision: The Bench rejected the Revenue’s request to defer adjudication and held that, in the absence of any stay on the decision in CIT v. Roca Bathroom Products (P) Ltd., it remains a binding precedent. The Tribunal ruled that Sections 144C and 153 are mutually inclusive and that DRP proceedings do not override or extend the statutory limitation prescribed under Section 153.

Since the final assessment order dated 26.07.2024 was passed after the limitation expired on 30.09.2023, it was held to be barred by limitation and quashed as void ab initio. The Tribunal, however, granted liberty to both parties to seek revival of the appeal on merits.

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