Facts of the Case

The respondent, Hyundai Rotem Company, is a foreign company incorporated in Korea and engaged in manufacturing railway rolling stock and related systems. For Assessment Year 2018-19, the assessee filed its return declaring total income of ₹13,64,92,120. The case was selected for scrutiny and referred to the Transfer Pricing Officer, who proposed an upward adjustment of ₹7,36,34,508 on account of provision of administrative support services. The Assessing Officer passed a draft assessment order, against which the assessee filed objections before the Dispute Resolution Panel. The DRP issued its directions on 24.05.2022, which were uploaded on the ITBA portal on 26.05.2022. Pursuant to the revised transfer pricing adjustment, the Assessing Officer passed the final assessment order on 01.07.2022. The ITAT allowed the assessee’s appeal holding the final assessment order to be barred by limitation under Section 144C(13). Aggrieved, the Revenue preferred an appeal before the Delhi High Court under Section 260A.

Issues Involved

Whether the limitation period prescribed under Section 144C(13) for passing the final assessment order commences from the date of uploading of DRP directions on the ITBA portal or from the date of physical receipt of the DRP order by the Assessing Officer, and whether the assessment order dated 01.07.2022 was barred by limitation.

Petitioner’s Arguments

The Revenue contended that the assessee was assessed under International Taxation and therefore outside the Faceless Assessment Scheme. It was argued that limitation under Section 144C(13) should be computed from the date on which the Assessing Officer physically received the DRP directions, which according to the Revenue was 01.06.2022, and therefore the final assessment order dated 01.07.2022 was within time. The Revenue further argued that mere uploading of DRP directions on the ITBA portal does not amount to “receipt” by the Assessing Officer.

Respondent’s Arguments

The assessee contended that DRP directions were uploaded on the ITBA portal on 26.05.2022 and were immediately available and accessible to the Assessing Officer. Relying on Section 13 of the Information Technology Act, the E-Assessment Scheme, and consistent judicial precedents, it was argued that electronic upload constitutes valid receipt. Accordingly, the limitation period expired on 30.06.2022, rendering the final assessment order dated 01.07.2022 void and time-barred.

Court Order / Findings

The Delhi High Court observed that the issue was no longer res integra and was squarely covered by its earlier decision in Louis Dreyfus Company India Private Limited as well as judgments of the Bombay, Madras, Karnataka and Telangana High Courts. The Court held that once DRP directions are uploaded on the ITBA portal with a Document Identification Number, they are deemed to be received by the Assessing Officer on the same date. The plea of the Revenue that limitation should commence from the date of physical receipt was rejected as inconsequential in the electronic assessment regime. The Court further held that Section 144C is a self-contained code and the limitation prescribed therein is mandatory. Since the DRP directions were uploaded on 26.05.2022, the Assessing Officer was required to pass the final assessment order by 30.06.2022. The order passed on 01.07.2022 was therefore barred by limitation and void ab initio. No substantial question of law arose for consideration.

Important Clarification

The High Court clarified that internal administrative delays or modes of physical transmission cannot extend statutory limitation. Uploading of DRP directions on the ITBA portal constitutes valid receipt for the purposes of Section 144C(13), including in cases of International Taxation. Procedural lapses within the Department cannot operate to the detriment of the assessee.

Final Outcome

The appeal filed by the Revenue was dismissed. The order of the ITAT quashing the final assessment order dated 01.07.2022 as time-barred under Section 144C(13) was upheld.

Link to Download Order- https://www.mytaxexpert.co.in/uploads/1769502247_COMMISSIONEROFINCOMETAXINTERNATIONALTAXATION2NEWDELHIVsHYUNDAIROTEMCOMPANY.pdf 

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