Key Points
The taxman is trying to buy time as a large number of cases related to international taxation and contentious transfer pricing matters hang in the balance...
If the Supreme Court subsequently upholds a recent Bombay High Court order (or an earlier Chennai High court order), then several tax matters, which are currently before the Dispute Resolution Panel (DRP), would become time-barred under the tax law and the Income Tax (I-T) department would be unable to recover any tax from these claims...
Now, according to the Bombay High Court ruling on August 4, 2023 - the order that drove the department to the Income Tax Appellate Tribunal (ITAT) - the time limit of 9 months is included within the 2 years that is available for completion of the final assessment order...
Faced with such a situation, the international taxation division of the Mumbai I-T office, in a letter dated August 8, 2023, has said, "In view of the wide ramifications and huge tax implications of the above order the Revenue is in the process of seeking stay on the operation of the said order (i.e, the Bombay HC order) from the Hon'ble Supreme Court..
Section 153 of the I-T Act deals with the time limits for completion of assessment, reassessment and re-computation while Section 144C, introduced in 2017 to bring in greater accountability in the tax assessment process, dwells on the procedure of the draft assessment order and the role of the DRP..
