AVEVA SOLUTIONS INDIA LLP,HYDERABAD V. INCOME TAX OFFICER, WARD 8(1), HYDERABAD

ITA 1170/HYD/2024

AI Insights

The case involves Aveva Solutions India LLP, the appellant, contesting an assessment order passed by the Income Tax Officer, Ward-8(1), Hyderabad, for the assessment year 2021-2022. The primary contention was that the assessment order was barred by limitation as per the provisions of section 153(1) read with section 153(4) of the Income Tax Act, 1961. The assessee argued that the order was passed beyond the extended time limit applicable due to a reference to the Transfer Pricing Officer (TPO), which should have allowed completion by 31.12.2023, but the order was actually passed on 18.10.2024. The Tribunal considered various legal precedents and the specific provisions of the Income Tax Act to arrive at its decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787385 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2021-2022
• Appeal Filed On: 08-11-2024
• Other Referred Cases: CIT vs. Roca Bathroom Products (P.) Ltd., Shelf Drilling Ron Tappmeyer Ltd. vs. ACIT, International Taxation, Super Brands Ltd. (UK) vs. ADIT, Kotha Kantaiah vs. Income Tax Officer
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U MINICHANDRAN
• Assessee Lawyers: PERCY PERDIWALA
• Keywords: Opportunity of being heard; Transfer pricing; Period of limitation; Time period of passing order
• Section: 144; 263

Judgement Text

"आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad Įी ͪवजय पाल राव, उपाÚ य¢ एवं Įी मधुसूदन सावͫडया, लेखा सदè य क े सम¢ । BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.1170/Hyd/2024 Assessment Year – 2021-2022 Aveva Solutions India LLP, Hyderabad. PIN – 500 008. PAN AAYFA6913G vs. The Income Tax Officer, Ward-8(1), Hyderabad – 500 084. (Appellant) (Respondent) िनधाŊįरती Ȫारा /Assessee by: Sri Percy Perdiwala, Advocate Shri Harsh Shah and CA Karan Jain. राज̾ व Ȫारा /Revenue by: MS U Mini Chandran, CIT-DR सुनवाई की तारीख/Date of hearing: 13.11.2025 घोषणा की तारीख/Pronouncement: 19.11.2025 आदेश/ORDER PER VIJAY PAL RAO, VICE PRESIDENT : This appeal by the assessee is directed against the assessment order passed u/sec.143(3) r.w.s.144C(13) r.w.s.144B of the Income Tax Act, 1961 [in short \"the Act\"] Printed from counselvise.com 2 ITA.No.1170/Hyd./2024 in pursuance to the Directions dated 24.09.2024 of the Disputes Resolution Panel-1 [in short “DRP”], Bengaluru passed u/sec.144C(5) of the Income Tax Act, 1961, for the assessment year 2021-2022. 2. The assessee has raised the following grounds : Printed from counselvise.com 3 ITA.No.1170/Hyd./2024 Printed from counselvise.com 4 ITA.No.1170/Hyd./2024 Printed from counselvise.com 5 ITA.No.1170/Hyd./2024 3. Ground no.1 is regarding validity of the assessment order passed by the Assessing Officer on the ground of barred by limitation. 4. Learned Senior Counsel Sri Percy Pardiwala, has submitted that the assessment order dated 18.10.2024 Printed from counselvise.com 6 ITA.No.1170/Hyd./2024 passed by the Assessing Officer u/sec.143(3) r.w.s.144C(13) of the Act is barred by limitation as provided u/sec.153(1) read with sub-section(4) of the Act. He has pointed-out that as per the provisions of sec.153(1), the time period for completing the assessment is 9 months from the end of the assessment year and, therefore, in the normal case of assessment, the limitation was available up-to 31.12.2022. Since it is a case of Reference to the Transfer Pricing Officer [in short “TPO”], therefore, sub-section (4) of sec.153 extends the time limit for further 12 months for completing the assessment and consequently, the time limit in the case of the assessee expires on 31.12.2023. Learned Sr. Counsel for the Assessee has submitted that since the impugned order was passed on 18.10.2024, therefore, the same is barred by limitation and liable to be quashed. He has further pointed-out that even the Draft Assessment Order passed by the Assessing Officer is not within the period of limitation as provided as it did not allow the period of 30 days to the assessee to file it’s acceptance of variations or file it’s objections, if any, to such variations with the DRP Printed from counselvise.com 7 ITA.No.1170/Hyd./2024 because allowing the said period of 30 days will again cross the limitation provided for passing the Final Assessment Order by 31.12.2023. Thus, the Learned Counsel for the Assessee has submitted that as per sub-sec.(2) of sec.144C, the Assessing Officer has to give 30 days time period to the assessee to file acceptance or it’s objections with the DRP before the limitation period provided u/sec.153(4) expires. In support of his contention, he has relied upon the Judgment of Hon’ble Madras High Court in the case of CIT vs., Roca Bathroom Products (P.) Ltd., [2022] 445 ITR 537 (Madras) as well as the Judgment of Hon’ble Bombay High Court in the case of Shelf Drilling Ron Tappmeyer Ltd., vs., ACIT, International Taxation [2023] 457 ITR 161 (Bombay). Thus, the Learned Counsel for the Assessee has submitted that the overall limitation for passing the assessment order cannot be exceeded as provided u/sec.153(1) read with sub- sec.(4) of said Section and the limitation as provided u/sec.144C(13) is only a restriction on the Assessing Officer to pass the final order within one month from the receipt of the Directions of the DRP and not enlarging the limitation Printed from counselvise.com 8 ITA.No.1170/Hyd./2024 which is provided u/sec.153 of the Act. The Hon’ble High Court has held that provisions u/sec.144C and 153C are not mutually exclusive as both contains the provisions relating to sec.92CA and are inter-dependent and overlapping. Similar view has been taken by the Hon’ble Bombay High Court in the case of Shelf Drilling Ron Tappmeyer Ltd., vs., ACIT, International Taxation (supra) and held that the limitation prescribed u/sec.153 of the Act would prevail over and above the assessment time limit prescribed u/sec.144C of the Act. 5. On the other hand, learned DR has submitted that the provisions of sec.144C begins with a non-obstante clause and, therefore, sec.144C is a Code in itself so far as the assessments in case of an “eligible assessee” and, therefore, the non-obstante clause in sec.144C(13) excludes the provisions of sec.153 of the Act. Learned DR has submitted that sec.153 of the Act exists in the Income Tax Act for a consequently longer period of time, whereas sec.144C of the Act is relatively a new provision introduced in 2009 and, therefore, the effect of non-obstante clause in Printed from counselvise.com 9 ITA.No.1170/Hyd./2024 sec.144C makes it clear that the provisions of sec.144C would prevail over the provisions of sec.153 of the Act. The learned DR has further submitted that the Income Tax Act provides two different methods of assessment one for the “eligible assessee” as defined u/sec.144C(15)(b) of the Act and the “other method” is applicable for the assessees’ who falls under the normal category. In case of ordinary or normal category of assessee , the assessment order must be completed within the limitation as provided u/sec.153(1) of the Act, whereas, if the matter is referred to the TPO u/sec.92CA of the Act, this period of limitation is further extended by a period of 12 months as per sub-sec.(4) of sec.153. The learned DR has further submitted that as per the special provisions u/sec.144C, the assessee is having an option to accept the Draft Assessment Order and variations in the draft assessment or to object the same by filing objections before the DRP or to the Assessing Officer for going to challenge the order of the Assessing Officer under regular appeal before the learned CIT(A). Therefore, once the assessee decided to go for the objections before the DRP, the Printed from counselvise.com 10 ITA.No.1170/Hyd./2024 limitation for completing the assessment is applicable as provided u/sec.144C(13) of the Act. Thus, the learned DR has submitted that once the Final Assessment Order is passed within the period of 30 days from the receipt of the DRP directions, then, it is well within the period of limitation provided u/sec.144C(13) of the Act. The learned DR has further submitted that this issue is pending adjudication before the Hon’ble Supreme Court. Earlier the Division Bench of the Hon’ble Supreme Court has given divergent decisions and, therefore, now this controversy has to be resolved by a Larger Bench of Hon’ble Supreme Court. Thus, the learned DR has submitted that till the dispute is resolved by the Larger Bench of the Supreme Court, this issue may be kept open. 6. In rejoinder, the learned Senior Counsel for the Assessee has submitted that though the issue is pending adjudication before the Hon’ble Supreme Court and now has to be resolved by the Larger Bench, however, as on the date, the issue is covered by the Judgment of Hon’ble High Courts and there is no contrary Judgment of any of the Printed from counselvise.com 11 ITA.No.1170/Hyd./2024 Hon’ble High Courts. In support of his contention, he has relied upon the decision of Delhi Benches of the Tribunal in the case of Super Brands Ltd., (UK) vs., ADIT [2023] 147 taxmann.com 323 (Delhi-Trib.) and submitted that the Hon’ble Delhi Tribunal has also taken note of this fact of no distinguishing decision has been brought to the knowledge of the Tribunal on this issue. 7. We have considered the rival submissions as well as relevant material on record. In the case in hand, the assessee has challenged the validity of the assessment order passed u/sec.143(3) r.w.s.144C(13) of the Act dated 18.10.2024 being barred by limitation as provided u/sec.153 of the Act. At the outset, it is noted that the limitation for passing the assessment orders is provided u/sec.153 of the Act and the relevant provisions are in sub- sec.(1) and sub-sec.(4) of sec.153 reads as under : \"153. Time limit for completion of assessment, reassessment and re-computation.— (1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of twenty-one months Printed from counselvise.com 12 ITA.No.1170/Hyd./2024 from the end of the assessment year in which the income was first assessable. Provided that in respect of an order of assessment relating to the assessment year commencing on the 1st day of April, 2018, the provisions of this sub-section shall have effect, as if for the words \"twenty-one months\", the words \"eighteen months\" had been substituted: Provided further that in respect of an order of assessment relating to the assessment year commencing on – (i) the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words \"twenty-one months\", the words \"twelve months\" had been substituted. (ii) the 1st day of April, 2020, the provisions of this sub-section shall have effect, as if for the words \"twenty-one months\", the words \"eighteen months\" had been substituted. Provided also that in respect of an order of assessment relating to the assessment year commencing on the 1st day of April, 2021, the provisions of this sub-section shall have effect, as if for the words \"twenty-one months\", the words \"nine months\" had been substituted: Printed from counselvise.com 13 ITA.No.1170/Hyd./2024 Provided also that in respect of an order of assessment relating to the assessment year commencing on the 1st day of April, 2022, the provisions of this sub-section shall have effect, as if for the words \"twenty-one months\", the words \"twelve months\" had been substituted: (1A) xxxxx xxxxx (1B) xxxxx xxxxx (2) xxxxx xxxxx (3) xxxxx xxxxx (3A) xxxxx xxxxx (4) Notwithstanding anything contained in sub-sections (1), (1A), (2) (3) and (3A), where a reference under sub-section (1) of section 92CA is made during the course of the proceeding for the assessment or reassessment, the period available for completion of assessment or reassessment, as the case may be, under the said sub-sections (1), (1A), (2), (3) and (3A) shall be extended by twelve months. (5) Where effect to an order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264 is to be given by the Assessing Officer [or the Transfer Pricing Officer, as the case may be], wholly or partly, otherwise than by making a fresh assessment or reassessment [or fresh order under section 92CA, as the case may be], such effect shall be given within a period of three months from the end of the month in which order under section 250 or section 254 or section 260 or section 262 is received by the Principal Chief Printed from counselvise.com 14 ITA.No.1170/Hyd./2024 Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, the order under section 263 or section 264 is passed by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be. Provided that where it is not possible for the Assessing Officer [or the Transfer Pricing Officer, as the case may be,] to give effect to such order within the aforesaid period, for reasons beyond his control, the Principal Commissioner or Commissioner on receipt of such request in writing from the Assessing Officer [or the Transfer Pricing Officer, as the case may be], if satisfied, may allow an additional period of six months to give effect to the order. Provided further that where an order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264 requires verification of any issue by way of submission of any document by the assessee or any other person or where an opportunity of being heard is to be provided to the assessee, the order giving effect to the said order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264 shall be made within the time specified in sub- section (3).” 8. A co-joined reading of sub-sec.(1) with third proviso of this sub-section of sec.153 makes it clear that in normal course, no order of assessment shall be made after the expiry of 9 months from the end of the assessment year in which the income was first assessable. The third proviso Printed from counselvise.com 15 ITA.No.1170/Hyd./2024 is relevant for the case in hand because the assessment year under consideration is 2021-2022 and, therefore, the period of 21 months from the end of the assessment year is reduced to 9 months. Sub-sec.(4) contemplates the cases where a reference u/sec.92CA(1) is made during the course of assessment proceedings, then, the period available for completion of the assessment shall be extended by 12 months. It is an undisputed fact that the present case is falling in the category of an “eligible assessee” where reference u/sec.92CA(1) was made by the Assessing Officer to the TPO and, therefore, the time limit for completing the assessment was extended by 12 months whereby the Assessing Officer was required to complete the assessment by 31.12.2023. The Assessing Officer has passed the Final Assessment Order on 18.10.2024 in pursuance to the Directions dated 24.09.2024 of the DRP. This controversy of the limitation applicable u/sec.153 or u/sec.144C(13) was considered by the Hon’ble Madras High Court in the case of CIT vs., Roca Bathroom Products (P.) Ltd., (supra) and held in Paras-18 to 28 as under : Printed from counselvise.com 16 ITA.No.1170/Hyd./2024 Printed from counselvise.com 17 ITA.No.1170/Hyd./2024 Printed from counselvise.com 18 ITA.No.1170/Hyd./2024 Printed from counselvise.com 19 ITA.No.1170/Hyd./2024 Printed from counselvise.com 20 ITA.No.1170/Hyd./2024 Printed from counselvise.com 21 ITA.No.1170/Hyd./2024 Printed from counselvise.com 22 ITA.No.1170/Hyd./2024 9. Thus, the Hon’ble Madras High Court has held that provisions of sec.144C and 153 are not mutually exclusive, but, are rather mutually inclusive. The period of limitation u/sec.153 is applicable for completing the assessment and sec.144C(13) is only in the nature of restricting the time period, within which, the Assessing Officer is required to pass the Final Assessment Order after the Directions of the DRP and not enlarging the limitation provided u/sec.153 of the Act. Printed from counselvise.com 23 ITA.No.1170/Hyd./2024 10. Similar view has been taken by the Hon’ble Bombay High Court in the case of Shelf Drilling Ron Tappmeyer Ltd., vs., ACIT, International Taxation (supra) in Paras-23 to 34 as under : Printed from counselvise.com 24 ITA.No.1170/Hyd./2024 Printed from counselvise.com 25 ITA.No.1170/Hyd./2024 11. Therefore, following the Judgments of Hon’ble Madras High Court as well as Hon’ble Bombay High Court cited (surpa), we hold that the assessment order passed by the Assessing Officer on 18.10.2024 is barred by limitation and consequently, the same is liable to be quashed. We order accordingly. 12. Since the issue is pending adjudication before the Hon’ble Supreme Court in the case of ACIT-[International Taxation] vs., Shelf Drilling Ron Tappmeyer Ltd., [2025] 177 taxmann.com 262 (SC) and the first attempt to resolve the dispute by the Hon’ble Supreme Court is not successful due to divergent views of the Division Bench of the Hon’ble Supreme Court and, therefore, the matter is required to be resolved by the Larger Bench of the Hon’ble Supreme Court. Since the matter is yet to be resolved by the Hon’ble Supreme Court, therefore, we allow the parties to get this Printed from counselvise.com 26 ITA.No.1170/Hyd./2024 appeal revived if the decision of the Hon’ble Supreme Court on this issue necessitates modification of this order. 13. The Hon’ble jurisdictional High Court in the case of Kotha Kantaiah vs., Income Tax Officer in WP.No.344 of 2025 vide order dated 24.04.2025 while dealing with the issue of validity of the notice issued u/sec.148 issued by the Jurisdictional Assessing Officer [in short “JAO”] instead of Faceless Assessing Officer [in short “FAO”] as per the Faceless Assessment Scheme has quashed the notice issued u/sec.148 by the JAO and consequently, re-assessment order, but, granted the liberty to the parties to get the petition revived as per the outcome of the Judgment of the Hon’ble Supreme Court on the identical issue. The relevant part of the Judgment of Hon’ble Jurisdictional High Court of Telangana in the case of Kotha Kantaiah vs., Income Tax Officer (supra) in Paras-15 to 18 of the said judgement is as under : Printed from counselvise.com 27 ITA.No.1170/Hyd./2024 Printed from counselvise.com 28 ITA.No.1170/Hyd./2024 Printed from counselvise.com 29 ITA.No.1170/Hyd./2024 14. Accordingly, we dispose of this appeal on this legal issue and keep open the other issues raised by the assessee on the merits if the Hon’ble Supreme Court decides this issue otherwise. Printed from counselvise.com 30 ITA.No.1170/Hyd./2024 15. In the result, appeal of the Assessee is allowed. Order pronounced in the open Court on 19.11.2025. Sd/- Sd/- [MADHUSUDAN SAWDIA] [VIJAY PAL RAO] ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated 19th November, 2025 VBP Copy to : 1. Aveva Solutions India LLP, Tower-1, 2nd Floor, Waverock, S Y No.115, Wave Rock TSIIC IT/ITES SEZ, Nanakramguda, Hyderabad – 500 008. 2. The Income Tax Officer, Ward-8(1), Signature Towers, Kondapur, R.R District, Hyderabad – 500 084. 3. The Disputes Resolution Panel-1, Kendriya Sadan, 4th Floor, C-Wing, BENGALURU – 560 034. 4. The. Pr. CIT, Hyderabad. 5. The DR, ITAT, “A” Bench, Hyderabad. 6. Guard file. BY ORDER, //True copy// Printed from counselvise.com "