ORDER :

The present writ petition has been filed against the impugned order dated 24.09.2010 passed by the 1st respondent/Dispute Resolution Panel for the assessment year 2006-2007 under Section 144C (5) read with Section 144C (8) of the Income Tax Act, 1961.

2. The relevant portion of the impugned order dealing with limitation reads as under:-

“2.3. Before us the assessing officer has presented the case records, the assessment folder and made written submission on this issue vide letter dated 25/08/2010. Briefly, the A.O's submission is that the A.O during the course of assessment proceedings found that the value of International transactions in this case for the relevant assessment year exceeded Rs.15 crore, he therefore, vide a letter dated 11/11/2008 addressed to the CIT u/s. 92 CA requested the CIT for approval as required before making a reference to the TPO. The CIT after considering the subject mater accorded his approval vide letter dated 18/11/2008 to the A.O., therefore, the process for Transfer Pricing Audit u/s. 92CA had commenced. The A.O therefore, submitted that the communication dated 17/02/2009 by the A.O to the TPO is merely a formality and is not a fatal defect in the procedure, hence, the assessment is not barred by limitation of time.

2.4 We have carefully considered the facts of the case, written submissions of both the parties and we have also examined the case records, more particularly the A.O's letter dated 11/11/2008 addressed to the CIT for seeking the previous approval as required u/s. 92CA and the CIT's letter dated 18/11/2008 addressed to the A.O conveying the necessary approval for initiating the TP Audit in this case by the TPO. On appreciating these facts we have come to this conclusion that once the CIT accorded on 18/11/2008 his approval after proper application of mind and directed the A.O to get the TP Audit done by the TPO, the A.O's letter dated 17/02/2009 was an internal correspondence between the A.O and the TPO. Therefore, as on 18/11/2008, when the decision was taken with the previous approval of the CIT for the TP Audit, the time limitation for completing the assessment got extended by one year in terms of the second proviso to Section 153(1) of the Act. We also found that there is no dispute with regards to the above referred dates of A.O's letter dated 11/11/2008 addressed to the CIT seeking the previous approval and CIT's letter dated 18/11/2008 according such approval to the A.O. In view of these facts, the position of law and the circumstances of the case we find that there is no merit in the assessee's argument on this issue and we hold that there is no infirmity in the procedure involving reference u/s. 92CA to the TPO and subsequently the draft assessment order passed by the A.O. This ground of dispute is therefore rejected.”

3. The writ petition is predicated on the ground that the reference by the 3rd respondent/Additional Commissioner of Income Tax to the 2nd respondent/Transfer Pricing Officer on 18.11.2008 was beyond the period of limitation prescribed under Section 153 (1) of the Income Tax Act, 1961. Therefore, the impugned order was without jurisdiction.

4. It is submitted that assessment has to be completed within a period of 21 months from the expiry of the relevant assessment year under 1st proviso to Section 153(1) of the Income Tax Act, 1961. In this case, the last date for completing the assessment expired on 31.12.2008. It is therefore submitted that the assessment cannot be completed beyond the aforesaid period as admittedly the impugned order dated 24.09.2010 has been passed beyond the aforesaid period of limitation. It is submitted that the proceedings initiated at the fag end of limitation to refer the case for order of a 2nd respondent/Transfer Pricing Officer cannot resuscitate the limitation which had expired on 31.12.2008.

5. It is the contention of the learned counsel for the petitioner that limitation prescribed under the Income Tax Act, 1961 cannot be vi