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Interpretation of Section 144 C (13) :

24. On a reading of the Scheme of Section 144C of the Act, and more particularly on a conjoint and harmonious reading of Sections 144C(4), 144C (12) and 144C (13), we cannot accept the submission of the learned counsel for the appellant- revenue that the time limit provided in Section 144C (13) is only directory. In our view, Section 144C (13) provides that the assessing officer has to complete the assessment within one month from the end of the month in which such direction is received. This provision overrides the general limitation time contained in Section 153 of the Act but it does not override the nature of effect of completion of assessment in time provided under Section 144C (13).

29. The phrase used in Section 144C (13) is "shall ............ complete the assessment .............. within one month .......... received." The word "shall" gives a clear indication of the intention of the legislature, moreso on looking at the objective of insertion of Section 144C, that the time limit provided is imperative and mandatory. On a complete reading of Section 144C (13), there is an affirmative direction to the AO to complete the assessment within the time limit provided therein. The affirmative mandate to complete the assessment in time is absolute, explicit and peremptory. On reading of the provision of Section 144C (13) r.w.s. 144 (12) and the scheme and objective of insertion of Section 144C (13), it is implied that no order order under Section 144C (13) can be made within one month from the end of the month in which directions under Section 144C (5) of the DRP is received. Any other interpretation as suggested by the appellant- revenue would be contrary to the intention of the legislature and also contrary to the scheme of Section 144C as analysed by us above.

37. We may observe, although not argued by any of the parties, that the period provided under Section 144C (13) cannot be counted from the end of the month in which the TPO's order dated 27 January 2015 were received. We say so for more than one reason. Firstly, since the TPO's order is pursuant to the DRP's direction which was received much before 31 January 2015 and there is no justification for the AO not to have passed the assessment order before 31 January 2015. Secondly, the date of TPO's order pursuant to the DRP's directions cannot be counted as a starting date since sub-section (13) of Section 144C provides for the starting period to commence for the purpose of completion of the assessment as the end of the month in which the directions of the DRP were received by the AO. If the TPO's order dated 27 January 2015 is considered to be the starting point for the purpose of Section 144C (13), then we would be reading into the said section something which is not there and it is settled position that ppn 16/21 1.itxa-1238.18(j).docx the Court cannot re-draft the provisions of the law. The provision of Section 144C (13) has to be read as it stands in the statute book. Provisions of Sections 144C (6) and 144C (7) requires the DRP to carry out enquiry before any directions under Section 144C (5) are issued to the AO. This clearly shows post Section 144C (5) directions, no authority other than AO intervenes. Therefore, looked from any angle, in our view, the final assessment order made on 27 February 2015 is beyond the limitation period provided under Section 144C (13) of the Act.

In our view, the ratio of the decision of the Co-ordinate bench in the case of Vodafone Idea Limited (Supra) squarely applies to the interpretation of whether the provision of Section 144C (13) is mandatory or directory and, therefore, it is to be held that Section 144C (13) of the Act time limit is mandatory.

40. Mr. Pardiwalla, learned senior counsel for the respondent-assessee is justified in placing reliance on the decision of the Delhi High Court in the case of Louis Dreyfus Company India (P.) Ltd. (supra). The facts of the present case before us are very close and similar to the facts before the Delhi High Court. Before the Delhi High Court, the TPO proposed adjustments of Rs.25.82 crore which found its place in the draft assessment order. The assessee filed objections before the DRP and the DRP ultimately passed an order on 20 June 2022 affirming the transfer pricing adjustments made to the income of the assessee. The said directions were uploaded on the Income Tax Business Application portal on 24 June 2022. Pursuant to the directions framed by the DRP, the TPO by an order dated 25 July 2022 revised the transfer pricing adjustments to Rs.20.24 crore and the assessment order came to be passed on 24 August 2022. On these facts, it ppn 18/21 1.itxa-1238.18(j).docx was the contention of the revenue that the limitation period provided under Section 144C (13) should be counted from the date of TPO's order dated 25 July 2022 and therefore, the assessment order was passed within the limitation period provided under Section 144C (13). The Delhi High Court after examining the scheme of Section 144C and after relying upon the decision of this Court in the case of Vodafone Idea Ltd. (supra) rejected the contention of the revenue and observed that the procedure of assessment as provided under Section 144C does not envisage or contemplate the interdiction or involvement of the TPO once a directive has been framed by the DRP. The Delhi High Court further observed that the role of the TPO comes to an end once an order as contemplated under Section 92 CA(4) of the Act is framed and remitted to the AO. In our view, even on this count following the decision of the Delhi High Court, the assessment order passed on 27 February 2015 is barred by limitation.