ITAT quashes final assessment orders as time-barred despite pendency of issue before the Supreme Court

The assessees, group companies of Renew Wind Energy, were subjected to final assessment orders for AY 2020-21 passed under Section 143(3) read with Sections 144C(13) and 144B. The assessees challenged the assessments primarily on the ground of limitation, contending that the final orders dated 18.07.2024 and 26.07.2024 were passed beyond the outer time limit prescribed under Section 153(1) read with Section 153(4) of the Act.

According to the assessees, the statutory time limit for completion of assessment expired on 30.09.2023. The Revenue opposed adjudication, arguing that the issue relating to limitation under the DRP framework was pending before the Supreme Court in Shelf Drilling Ron Tappmeyer Ltd. and therefore sought deferment of the appeals.

Main Issue

Whether final assessment orders passed under Section 143(3) read with Section 144C(13) beyond the outer time limit prescribed under Section 153 are barred by limitation, notwithstanding pendency of the issue before the Supreme Court.

ITATs Order:

The Tribunal rejected the Revenue’s plea for deferral and held that mere pendency of the issue before the Supreme Court does not dilute the binding nature of an existing High Court judgment. Relying on the Madras High Court ruling in Roca Bathroom Products (P.) Ltd., and a consistent line of Tribunal decisions, it was held that Sections 144C and 153 are not mutually exclusive and the DRP mechanism does not override the statutory limitation prescribed under Section 153. Since the impugned final assessment orders were passed well beyond the outer time limit, they were held to be barred by limitation and void in law.

Thus, the assessment orders were quashed. However, keeping in view the pending adjudication before the Larger Bench of the Supreme Court in Shelf Drilling Ron Tappmeyer Ltd., the Tribunal granted liberty to both parties to seek revival of the appeals on merits if the Supreme Court decision so warrants.

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