Advocates appeared:
For the Petitioner(s): Mr. N Venkatraman, A.S.G. Ms. Swarupama Chaturvedi, Sr. Adv. Mr. Raj Bahadur Yadav, AOR Mr. H R Rao, Adv. Mr. Udai Khanna, Adv. Mr. V Chandrashekhara Bharathi, Adv. Mr. Ashok Panigrahi, Adv. Mr. Sachin Sharma, Adv. Mrs. A Deepa, Adv. Mrs. Madhulika Upadhyay Aor, Adv.
For the Respondent(s): Mr. Jehangir D Mistry, Sr. Adv. Ms. Rubal Bansal Maini, Adv. Mr. Prakhar Pandey, Adv. Mr. Satvik Sareen, Adv. Mr. Faisal Sherwani, AOR Mr. J. D Mistry, Sr. Adv. Mr. Nitesh Joshi, Adv. Mr. Kunal Cheema, AOR Mr. Raghav Deshpande, Adv. Mr. Shubham Chandankhede, Adv.

Case Summary: Assistant Commissioner of Income Tax v. Shelf Drilling Ron Tappmeyer Ltd.

Core Issue: Interpretation of the interplay between Sections 144C (procedure for eligible assessees involving draft assessment orders and Dispute Resolution Panel (DRP)) and 153 (time limits for assessments) of the Income Tax Act, 1961. Specifically, whether Section 144C timelines (up to 11 months from draft order) are subsumed within Section 153 limits (e.g., 12 months for fresh assessments post-remand under Section 254) or operate independently/additionally. (!) (!) (!)

Facts: - Respondents (non-resident foreign companies in shallow water drilling, eligible assessees under Section 144C(15)(b)) declared losses for AY 2014-15 and 2018-19. - Initial scrutiny led to draft orders under Section 144C, DRP directions, and final orders under Section 143(3) r/w Section 144C(13). - Tribunal remanded matters (e.g., order dated 04.10.2019); post-remand, fresh draft orders issued on 28.09.2021. - Bombay High Court held proceedings time-barred under Section 153(3) (extended to 30.09.2021 via TOLA notifications), as Section 144C procedure must complete within Section 153 limits. (!) (!) (!) (!)

Key Provisions: - Section 144C: Requires draft order for prejudicial variations to eligible assessees; 30 days to accept/object; DRP directions within 9 months (s.12); final order within 1 month thereafter (ss.4,13). Non-obstante clauses in ss.(1),(4),(13) override contrary Act provisions (ss.1: general procedure; ss.4/13: specific to s.153). (!) (!) (!) - Section 153: General limits (e.g., s.153(3) proviso: 12 months from FY-end post-remand for fresh assessment). No explicit exclusion for Section 144C time; Explanation 1 excludes specific periods but omits DRP proceedings. (!) (!)

Divergent Judicial Opinions (Split Verdict, 08.08.2025): - Nagarathna, J. (Dissent - Dismiss Appeals): Sections coexist harmoniously; Section 144C procedure subsumed within Section 153 limits (e.g., draft order timely to allow 11-month process within 12 months). Non-obstante in s.144C(1) distinguishes procedure for eligible assessees (draft vs. final order under s.143(3)); ss.(4)/(13) impose stricter 1-month final order limits to ensure overall compliance. No extension for non-92CA eligible assessees; unworkability not ground to extend limits. Bombay HC correct; returns accepted, proceedings barred. (!) (!) (!) (!) (!) - Satish Chandra Sharma, J. (Allow Appeals): Section 144C is self-contained code; s.153 timelines apply only to draft order (s.144C(1)); post-draft, Section 144C timelines (1-11 months) additional/independent via non-obstante ss.(4)/(13). Subsumption unworkable (e.g., negligible AO time, violates natural justice). Bombay/Madras HCs erroneous; revenue free to proceed afresh. (!) (!) (!)

Outcome: Appeals allowed by Sharma, J.; set aside Bombay HC; matter referred to larger Bench by Court order due to split. Revenue/assessee liberty to proceed/challenge per law. (!) (!)