Assessment orders beyond mandatory statutory timelines are invalid and liable to be quashed.

ORDER :

S.R. KRISHNA KUMAR, J.

In this petition, petitioner seeks the following reliefs:

i. issue a writ of certiorari and quash the following orders passed by the Respondent No.1:

ANNEXURE 'E : Impugned final assessment order dated 20.12.2022 passed by the Respondent No.1 under section 143(3) read with section 144C(13) read with section 144B of the IT Act in DIN & Order No: ITBA/AST/S/143(3)/2022-23/104809 8687(1) for the AY 2018-19.

ANNEXURE 'E1' : Impugned computation sheet dated 20.12.2022 issued by the Respondent No.1 under section 143(3) read with section 144C(13) of the IT Act in DIN & Order No: ITBA/AST/S/186/2022-23/1048098717(1) for the AY 2018-19.

ANNEXURE 'E2' : Impugned demand notice dated 20.12.2022 issued by the Respondent No.1 under section 156 of the IT Act in DIN & Order No: ITBA/AST /S/156/2022-23/1048098726(1) for the AY 2018-19

ii. issue any other writ, order or direction to which the Petitioner is found entitled to in the present facts and circumstances, in the interests of justice and equity.”

2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.

3. A perusal of the material on record will indicate that on 13.06.2022 vide Annexure-C, the Dispute Resolution Panel issued a directions to the Assessing Officer, who was bound to pass final assessment order on or before 31.07.2022 in terms of Section 144C of the I.T. Act. In pursuance of the same, the Transfer Pricing Officer passed an order dated 22.07.2022 vide Annexure-D giving effect to the order of Dispute Resolution Panel. The Assessing Officer passed Final Assessment Order only on 20.12.2022 after lapse of about five months from the due date, which is impermissible in law as held by the Division Bench of this Court in the case of Himalaya Drug Company Vs. Deputy Commissioner of Income Tax – ITA No.571/2017 dated 04.06.2025, wherein it is held as under:

“The appellant-assessee is before this Court under Section 260A of the Income-Tax Act, 1961 (for short “IT Act”), questioning the order dated 21.06.2017 in IT(TP)A No.807/Bang/2016 passed by Income Tax Appellate Tribunal, “B” Bench, Bengaluru (for short “Tribunal”), dismissing the appeal refusing to declare the proceedings under Section 144C of the IT Act as null and void.

2. The appeal coming on for admission on 15.11.2017, this Court admitted the appeal to consider the questions formulated in the appeal, which reads as follows:

“1. Whether on the facts and circumstances of the case, the Tribunal is justified in law upholding the validity of final assessment order passed by the Assessing Officer beyond the time limit prescribed under Section 144C(13)?

2. Whether on the facts and circumstances of the case, the Tribunal is justified in law in failing to follow the decisions of co-ordinate bench?”

3. Heard learned senior counsel Sri.K.K.Chaitanya for Sri.Tata Krishna, learned counsel for the appellant and Sri.Y.V.Raviraj, learned counsel for the respondent-Revenue. Perused the entire appeal papers.

4. The brief facts of the case are that, the appellant, a Partnership Firm filed its returns for the assessment year 2011-12 on 30.09.2011. The same was processed under Section 143(1) of the IT Act and notice under Section 143(2) of the IT Act was issued calling upon certain details/information from the appellant. Thereafter, the case of the appellant was referred to Transfer Pricing Officer under Section 92CA of IT Act and the Transfer Pricing Officer passed order under Section 92CA on 30.01.2015. Thereafter, the respondent passed draft assessment order under Section 144C read with Section 143(2) of IT Act on 27.03.2015 for the relevant assessment year. Aggrieved by the said draft assessment order, the appellant is said to have filed an appeal before the Dispute Resolution Panel, Bangalore (for short “DRP”) in