The Delhi High Court while giving major relief to Hyundai held that under Faceless Assessment Regime, limitation period to run from date of uploading DRP Order on ITBA portal.
The bench of Justice V. Kameswar Rao and Justice Vinod Kumar has observed that the crucial date being 26.05.2022 and the date of one month from the end of the month on which DRP order/ directive was received by the AO would be 30.06.2022. In the case of the appellant/Revenue, the FAO was passed only on 01.07.2022, which is clearly barred by limitation as contemplated under Section 144 C (13) of the Income Tax Act.
The respondent/assessee, Hyundai Rotem Company is incorporated in Korea engaged in producing different kinds of railway vehicles such as multiple units, high speed trains, light rail vehicles, locomotives and passenger coaches, car manufacturing systems and environment plants. The assessee filed its return of income on 26.03.2019 declaring a total income of Rs. 13,64,92,120.
The case was selected through CASS, and notice under Section 143(2) of the Income Tax Act was issued on 22.09.2019. By way of assessment proceedings, the case was referred to a Transfer Pricing Officer (TPO) on 24.06.2021. The TPO passed the order dated 25.07.2021 under Section 92CA (3) of the Act proposing upward adjustment amounting to Rs. 7,36,34,508 in respect of “provision of administrative support services“.
Based on the TPO‟s report, the Assessing Officer (AO) passed the Draft Assessment Order dated 27.09.2021 proposing assessed income of Rs. 21,01,26,630. The assessee filed objections before the Dispute Resolution Panel (DRP), New Delhi against the Draft Assessment Order dated 27.09.2021.
Pursuant to the direction of the DRP, the TPO revised the adjustment to ₹6,12,26,135/- and the AO passed the Final Assessment Order (FAO) dated 01.07.2022 at an assessed income of ₹19,77,18,255/-
Aggrieved by the FAO dated 01.07.2022, the respondent/assessee filed the appeal before the ITAT under Section 143 read with Section 144C(13) of the Income Tax Act.
It was the submission of the assessee before the ITAT that, FAO passed on the pivotal issue is vitiated in law owing to bar of limitation and
thus non est in law at the threshold as the time lines as provided under Section 144C(13) of the Act were not satisfied.
The submission of the appellant/Revenue was that manual orders uploaded by the DRP were not visible in the assessment worklist of the AO and hence the AO was not notified about the same in the ITBA portal. The case of the assessee reflected in AO’s work list on 30.06.2022 as is also evident from the “Order Sheet Details” downloaded from ITBA in the case of the assessee for AY 2018-19. Hence, the AO did not receive any communication of the said DRP order either through mail or on ITBA worklist until 30.06.2022.
It received the Dak physically on 01.06.2022 vide Diary No 123 and there was no communication regarding the same on the email from the DRP. In such a scenario, the time limit can only be computed from the date on which the communication was received in Dak i.e 01.06.2022. The appellant stated that, as per the Act, the time prescribed is one month from the end of the month in which directions are received from DRP for passing the FAO and in the instant case FAO was passed on 01.07.2022, which was well within time limit as prescribed in the Income Tax Act.
The department contended that the ITAT has erred in holding that the FAO for AY 2018-19 is time barred, null and void as the same was done without correctly interpreting the provisions of Section 144C (13) of the Act in calculating time of receipt of directions from the date of uploading of DRP orders in ITBA portal.
The ITAT has erred in overlooking the clear provisions of Section 144C(13) of the Act, which stipulates that upon the receipt of directions issued under sub-Section 5 of Section 144C of the Act, the AO shall in conformity with the directions, notwithstanding anything to the contrary contained in Section 153 of the Act, complete the assessment without providing any further opportunity of being heard to the assessee within one month from the end of month in which the directions have been received.
The issue raised was what would be the actual date of “receipt” of the directions of the DRP issued under Section 144C (5) of the Act for the purpose of computing the limitation period prescribed to pass the FAO under Section 144C (13) of the Income Tax Act.
The assessee, Hyundai contended that as per Section 144C(13) of the Income Tax Act, the AO should have completed the assessment by 30.06.2022. However, the FAO has been prepared, issued and served on 01.07.2022,in direct violation to limitation prescribed under Section 144C(13) of the Act and as such the same has been rightly quashed by the ITAT.
The tribunal held that as part of the larger Faceless Assessment Regime, all filed and uploaded directives of the DRP would be construed to be sufficient service and the period of limitation as prescribed under Section 144C (13) of the Act, would be liable to be computed from the date of uploading of the order and the AO shall pass the Assessment Order, bearing that crucial date in mind.
Case Details
Case Title: Commissioner Of Income Tax International Taxation-2, New Delhi Versus Hyundai Rotem Company
Case No.: ITA 304/2025 & CM APPL. 50009/2025
Date: 29.10.2025
Counsel For Appellant: Sunil Agarwal
Counsel For Respondent: Ananya Kapoor, Ms. Soumya Singh and Mr. Sumit Lalchandani, Advocates
