Limitation period runs from the date the DRP’s directions are uploaded on the ITBA portal.
Telangana High Court in the case of Rapiscan Systems Pvt. Limited (WP Nos 44891 & 44915 of 2022) has held that the period of limitation should be computed from the date of uploading.
Let us have a Short Overview of the case:
Background:
Rapiscan Systems Pvt. Limited is a foreign company based in Singapore with branch and project offices in India. The company is engaged in the distribution and installation of security and inspection systems, such as airport security x-ray machines and metal detectors.
The AO completed the assessment and passed a draft assessment order on 27.09.2021 for AY 2018-19, proposing additions.
The petitioner filed objections before the DRP, which issued its directions on 30.06.2022, declining relief to the petitioner.
The final assessment order was issued on 30.08.2022, along with a computation sheet, demand draft, and penalty notice, but without a Document Identification Number DIN.
Contentions of the Petitioner:
The petitioner argued that the final assessment orders were barred by limitation as per Section 144C(13) of the Act, which mandates that the assessment order must be passed within one month from the end of the month in which the DRP’s directions are received.
The petitioner contended that the DRP’s directions were uploaded on the ITBA portal on 30.06.2022, and therefore, the final assessment order should have been passed by 31.07.2022. The orders passed on 30.08.2022 and 01.09.2022 were beyond the permissible period of limitation.
Contentions of the Revenue:
The Revenue argued that the DRP’s directions were received by the AO on 05.07.2022 through web mail, and therefore, the final assessment order passed on 30.08.2022 was within the time limit.
The revenue relied on the Supreme Court’s judgment in National Faceless Assessment Centre v. Automotive Manufacturers Pvt. Ltd., which allowed some leverage for the revenue to take corrective measures in the faceless assessment regime.
The High Court’s ruling
The court examined Sections 144C(13) and 282(1)(c) of the Act and Section 13 of the Information Technology Act, 2000.
The court noted that the DRP’s directions were uploaded on the ITBA portal on 30.06.2022, and as per the E-Assessment Scheme, 2019, the period of limitation should be computed from the date of uploading.
The court referred to judgments from the Delhi High Court, Bombay High Court, and Madras High Court, which held that the period of limitation runs from the date the DRP’s directions are uploaded on the ITBA portal.
The court emphasized that once the DRP’s directions are uploaded, the originator (DRP) loses control over them, and the recipient (AO) is deemed to have received them on the same day.
The court concluded that the final assessment orders were issued beyond the permissible period of limitation, as the DRP’s directions were uploaded on 30.06.2022, and the final assessment order should have been passed by 31.07.2022. Accordingly, the court set aside the impugned assessment orders dated 30.08.2022 and 01.09.2022.
The Copy Of the order is as under: