Point of Law: Relaxation Act is applicable to petitioner’s case, the time-limit provided by Notification No.38/2021 expired on 30th June 2021. Notification No.74/2021, on which respondents have relied upon to submit that time has been extended upto 30th September 2021, specifically excludes Section 144C(13) of the Act.

JUDGMENT :

K.R. SHRIRAM, J.

1. Petitioner is in the business of retailing petroleum products and supplying lubricants.

2. Petitioner is challenging an assessment order dated 30th September 2021 passed by respondent No. 1 under Section 143(3) read with Section 144C(13) and Section 144B of the Income Tax Act, 1961 (the Act) for Assessment Year 2016-17. It is petitioner’s case that the assessment order is ex-facie illegal and contrary to provisions of the Act.

3. Petitioner filed original return of income for Assessment Year 2016-17 on 30th November 2016. Petitioner’s case was selected for scrutiny assessment vide notice dated 19th September 2017 issued by respondent No. 2 under Section 143(2) of the Act. Respondent No. 2 passed a draft assessment order dated 26th December 2019 under Section 143(3) read with Section 144C(1) [incorrectly mentioned as Section 144C(13)] making certain additions as proposed by Transfer Pricing Officer (TPO), who had passed an order under Section 92CA(4) of the Act on 29th October 2019 proposing an adjustment of Rs. 375,65,17,639/-. Petitioner filed its objections before the Dispute Resolution Panel (DRP) challenging the validity of the draft assessment order on 24th January, 2020. As per the provisions of Sub-Section (11) of Section 144C of the Act, the DRP is required to issue directions under Section 144C(5) of the Act within a period of nine months from the end of the month in which the draft assessment order is received by petitioner. Petitioner had received the draft assessment order on 26th December 2019 and, therefore, the DRP had time upto 30th September 2020 to issue directions.

4. On 29th September 2020, a gazette notification was published by the Government of India under which an Act to provide for relaxation and amendment of provisions of certain Acts and for matters connected therewith or incidental thereto called The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (hereinafter referred to as the ‘Relaxation Act’) came into force with effect from 31st March 2020. In view of provisions of Section 3 of the Relaxation Act, the time-limit for the DRP to issue directions came to be extended till 31st March, 2021. The DRP issued its directions on 20th March 2021 under Section 144C(5) of the Act. The directions were sent to respondent No. 2 as well as to the jurisdictional Commissioner of Income Tax.

5. Respondent No. 1 issued a notice dated 25th March 2021 under Section 142(1) of the Act calling upon petitioner to furnish various information. By a letter dated 30th March 2021, petitioner informed respondent No. 1 that the DRP has already passed its directions under Sub-Section (5) of Section 144C of the Act. Respondent No. 1 issued notice dated 26th September 2021 to petitioner asking certain information. Petitioner replied by an email on 28th September 2021. Without considering the notice dated 26th September 2021 and petitioner’s reply dated 28th September 2021, the impugned order dated 30th September 2021 came to be passed by respondent No. 1 under Section 143(3) read with Section 144C(13) and Section 144B of the Act. This was followed by the demand notice under Section 156 of the Act and the penalty notice under Section 274 read with Section 270A of the Act, both dated 30th September 2021, from respondent No. 1.

6. It is petitioner’s case that under Section 144C(13) of the Act, respondent No. 1 had to complete the assessment within one month from the end of the month in which such direction is received by him from the DRP. Admittedly, the DRP’s directions were received on 20th March 2021, which means, the date by which the Assessing Officer should have completed the assessment should have been 30th April 2021. Since the assessment order has been passed only on 30th September 2021, the entire assessment order is ex-facie illegal.

7. Respondent has filed an affidavit in reply in which respondent has relied upon three notifications issued by the Central Board of Di