Case Details: Principal Commissioner of Income-tax v. Yokogawa India Ltd - [2025] 179 taxmann.com 407 (Karnataka)
Judiciary and Counsel Details
- S.G. Pandit & K. V. Aravind, JJ.
- E.I. Sanmathi, Sr. Standing Counsel for the Appellant.
- D.D. Nageswar Rao, Adv. for the Respondent.
Facts of the Case
The assessee, a company, was engaged in the business of manufacturing, trading and distributing process control instruments. Its case was selected for scrutiny, and the Assessing Officer (AO) referred the matter to the Transfer Pricing Officer (TPO). After receiving the TPO’s order, the AO passed a draft assessment order, and the assessee filed objections before the Dispute Resolution Panel (DRP).
The DRP rejected the objections as being belated. Consequently, the AO passed the final assessment order. The assessee preferred an appeal before the Tribunal, and the Tribunal held the final assessment order was barred by limitation.
Aggrieved by the order, the AO filed the instant appeal before the Karnataka High Court.
High Court Held
The High Court held that Section 144C(2) provides that the assessee may, within 30 days of the receipt of the draft order, file his objections to the Dispute Resolution Panel (DRP). Section 144C(3) provides that the AO shall complete the assessment on the basis of the draft order if the assessee intimates to the AO the acceptance of the variation or no objections are received within the prescribed period. Section 144C(4) provides that the AO shall pass the assessment order within one month from the end of the month in which the period for filing objections expires.
In the instant case, the assessee filed the objections before the DRP beyond the prescribed period. Thus, the AO should have passed the assessment order within one month from the end of the month in which the period for filing objections expires. However, the AO waited for the DRP’s order and passed the assessment order after the DRP rejected the objections as being belated. Thus, the AO passed the assessment order beyond the prescribed period.
The provision of Section 144C(4) is mandatory in nature, and the AO is required to pass the assessment order within the prescribed time limit. The AO cannot wait for the DRP’s order and pass the assessment order beyond the prescribed time limit.
List of Cases Reviewed
- Yokogawa India Ltd. v. Asstt. CIT [2021] 128 taxmann.com 454 (Bangalore – Trib.) (para 17) affirmed.
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