Assessment orders passed after a remand by the Tribunal must adhere to the limitation period prescribed under Section 153 of the Income Tax Act; orders passed beyond this stipulated timeframe are barred by limitation and void ab initio.

O R D E R

PER M. BALAGANESH, A. M.:

1. The Assessee Corteva Agriscience India Pvt. Ltd (hereinafter referred to as ‘assessee) by filing the present appeal sought to set aside the impugned order dated 31.03.2025 passed by the Assessing Officer (AO) under section 254/143(3) of the Income Tax Act, 1961 (for short ‘the Act’) inconsonance with the order passed by the Dispute Resolution Panel (DRP)-1, New Delhi dated 25.03.2025 u/s 144C(5) and order of TPO u/s 92CA(3).

2. Ground Nos. 1 and 2 raised by the assessee are general in nature and does not require any specific adjudication.

3. The assessee has raised Ground No. 3 stating that the final assessment order passed by the ld AO pursuant to the direction of the ld DRP is barred by limitation. This goes to the root of the matter and hence the same is taken first for adjudication.

4. We have heard the rival submissions and perused the materials available on record. In this case, the return of income was filed for AY 2017-18 on 30.11.2017. The case was selected for scrutiny. A reference was made u/s 92CA(3) of the Act by ld AO to the ld TPO to determine the Arm’s Length Price (ALP) of international transaction undertaken by the assessee. Accordingly, an order stood passed by the ld TPO u/s 92CA(3) of the Act on 29.01.2021. The draft assessment order was passed by the ld AO u/s 144C(1) of the Act on 09.04.2021. The directions were issued by the ld DRP u/s 144C(5) of the Act on 19.01.2022. Giving effect to the directions of the ld DRP, the ld TPO passed an order on 08.02.2022. Final assessment order was passed u/s 143(3) r.w.s. 144C(13) of the Act on 17.02.2022. The appeal was filed against this final assessment order before this Tribunal. This Tribunal restored the matter to the file of the ld DRP vide its order dated 28.07.2022. By this process, the second round of litigation got commenced.

5. The ld DRP vide email intimated the assessee in the second round of proceedings fixing the hearing of the assessee on 26.09.2022 vide intimation dated 19.09.2022. The evidence in this regard is enclosed in page 1265 of the paper book Volume-III. However, we find that the ld DRP finally issued directions u/s 144C(5) of the Act on 25.03.2025, which is beyond the stipulated time limit under any provision of the Income Tax Act. Pursuant to this direction of the ld DRP, ld TPO passed the appeal effect order on 28.03.2025, which is also barred by limitation. The final assessment order was passed u/s 254/143(3) of the Act 31.03.2025 by the ld AO, which is also barred by limitation as it is beyond the stipulated time limit under any provision of the Act. Strangely one more final assessment order was also passed for the assessee for AY 2017-18 u/s 254 r.w.s. 143(3) of the Act on 03.04.2025, determining the same income of ₹352,87,30,775/-, which is also barred by limitation.

6. The Tribunal in the first round had passed the order on 28.07.2022. Hence, the limitation prescribed in section 153(3) of the Act would start from that date. As per 1st proviso to section 153(3) of the Act, the ld AO should have passed the final assessment order itself within 12 months from the end of the financial year in which the order of the Tribunal was passed. Hence, the last date for passing final assessment order for the ld AO would expire on 31.03.2024, which means the directions of the ld DRP should have been issued prior to that date. In the instant case, the directions of the ld DRP itself were issued only on 25.03.2025, which is beyond the time limit prescribed under 1st proviso to Section 153(3) of the Act. Hence, the final assessment order becomes barred by limitation. The ld AR rightly placed reliance on the decision of the Hon’ble Telangana High Court in the case of TNS India Pvt. Ltd