The main legal point established in the judgment is the interpretation and applicability of the time limits prescribed under Section 153(2A) and Section 153(3) of the Income Tax Act, 1961 in the context of passing consequential orders after a remand by the Tribunal.

ORDER :

The challenge in these two writ petitions are the consequential orders dated 20.04.2018 issued by the respondent No.3/The Deputy Commissioner of Income Tax-2 under Section 254 read with Section 143 of the Income Tax Act, 1961, (for short the “Act”) for the assessment year 2006-2007 and the impugned rectification order dated 12.10.2018 issued by the respondent No.2/The Assistant Commissioner of Income Tax under Section 154 of the Act for the same assessment year. For convenience, W.P.No.853 of 2019 is taken up, so far as the facts are concerned.

2. Heard Mr.Deepak Chopra, learned counsel appearing on behalf of Mr.Narendar Chetty, learned counsel for the petitioner and Ms. K. Mamata Choudary, learned counsel for the respondent-Department.

3. The whole dispute in the two writ petitions originates from an order passed by the Income Tax Appellate Tribunal (for short the “Tribunal”) in ITA No.108/Hyd/2011 for the assessment year 2006-2007. The Tribunal vide order dated 27.06.2014 had partly allowed an appeal of the petitioner/assesse.

4. For the aforesaid year, the petitioner/assesse had filed its return after claiming deductions under Section 10A of the Act. The said return of the petitioner/assesse was subjected to scrutiny by the Assessing Officer. The Assessing Officer noting certain international transactions being made by the petitioner/assesse referred the matter to the Transfer Pricing Officer (TPO) under Section 92CA(1) for determining the Arm’s Length Price (ALP). On examination, the TPO noted that while selecting comparables in ITES-BPO category, the petitioner/ assesse has wrongly applied incomparables with the comparables ignoring the provisions of rule 10B(4) of the Act. Finally, the TPO passed a draft assessment order. The petitioner/assesse raised objections before the Dispute Resolution Panel (DRP) who in turn rejected the same, leading to filing of ITA before the Tribunal.

5. The Tribunal after due consideration of all the contentions put forth by the petitioner/assesse found that there were certain items which were not properly assessed by the Assessing Officer. To the aforesaid extent, the appeal of the petitioner/assesse was partly allowed and the matter was remitted back to the file of Assessing Officer with a direction to look into the aspect and take a decision in the matter after verifying the claim of the petitioner/assesse and giving a fair and reasonable opportunity of hearing. The order of the Tribunal was one which was passed on 27.06.2014. Now the consequential order pursuant to the remand by the Tribunal has been passed by the Assessing Officer only on 20.04.2018. It is this passing of the consequential order dated 20.04.2018 which is the bone of contention in the present writ petitions.

6. The contention is as to “whether the consequential order could have been passed by the Assessing Officer beyond the prescribed period of time as is envisaged under Section 153 (2A) of the Act.” Secondly, “whether after a remand is made by the Tribunal while allowing an appeal in part, the consequential order that needs to be passed would be one under Section 153(2A) or would be under Section 153(3) of the Act”.

7. For proper appreciation of the issue raised in the writ petitions it would be relevant at this juncture to quote the aforesaid two provisions of law under the Act i.e. Section 153(2A) and Section 153(3) which for ready reference are reproduced herein under:

“(2A) Notwithstanding anything contained in sub-sections (1), (1A), (1B) and (2), in relation to the assessment year commencing on the 1st day of April 1971, and any subsequent assessment year, an order of fresh assessment in pursuance of an order under section 250 or section 254 of section 263 of section, setting aside or cancelling an assessment, may be made at any time before the expiry of one year from the end of the financial year in which the order under section 250 of section 254 is received by the Principal Chief Commissioner or Chief Commissio