Are proceedings before the Dispute Resolution Panel outside the ordinary limitation for completing an assessment?
A Division Bench of the Madras High Court affirmed the single judge and held that the DRP process is not unfettered by limitation: the proceedings remain circumscribed by the limits of time fixed by s.153. It is the decision the Bombay High Court followed in Shelf Drilling, and it is the High Court line the Revenue has carried to the Supreme Court.
Decided by the High Court on 2022, reported as [2022] 445 ITR 537 (Mad) (Division Bench), affirming Roca Bathroom Products (P) Ltd v DRP [2021] 432 ITR 192 (Mad); SLP (C) No. 34673 of 2022. It bears on section 144C, section 153 of the Income Tax Act 1961, in Assessment & Scrutiny matters.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The assessee was an eligible assessee whose assessment was routed through a draft order and objections before the Dispute Resolution Panel. The final assessment order was passed after the ordinary limitation date computed under s.153 had expired. The Revenue contended that once the s.144C route is invoked, the Panel's nine-month period and the officer's further one month run independently of s.153. The single judge rejected that contention and the Revenue appealed to a Division Bench.
The overall time limits for completing an assessment continue to apply to proceedings routed through the Dispute Resolution Panel; the proceedings before the Panel remain circumscribed by the limits of time. The Division Bench rejected the contention that DRP proceedings are unfettered by limitation and upheld the single judge's view that a final order passed beyond the s.153 date cannot stand.
Section 144C creates an additional procedural stage inside the assessment, not a fresh proceeding outside it, so the outer limit that governs the assessment governs the stage as well. If the Panel's timelines were read as additive, the assessment could be kept alive well beyond the period Parliament allowed, defeating the purpose of s.153. The Court also noted the practical consequence the Revenue's reading would produce, where a late reference to the TPO effectively lengthens limitation. The reading adopted keeps s.144C's fast-track purpose intact while preserving the statutory outer date.
circumscribed by the limits of time
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Handle my notice → Ask a CA on WhatsAppA Division Bench of the Madras High Court affirmed the single judge and held that the DRP process is not unfettered by limitation: the proceedings remain circumscribed by the limits of time fixed by s.153. It is the decision the Bombay High Court followed in Shelf Drilling, and it is the High Court line the Revenue has carried to the Supreme Court. This was decided by the High Court and bears on section 144C, section 153 of the Income Tax Act 1961. It is reported as [2022] 445 ITR 537 (Mad) (Division Bench), affirming Roca Bathroom Products (P) Ltd v DRP [2021] 432 ITR 192 (Mad); SLP (C) No. 34673 of 2022. If it applies to you, the first step is this: In Madras and Bombay jurisdictions, plead Roca Bathroom as the governing High Court authority on DRP limitation.
The assessee was an eligible assessee whose assessment was routed through a draft order and objections before the Dispute Resolution Panel. The final assessment order was passed after the ordinary limitation date computed under s.153 had expired. The Revenue contended that once the s.144C route is invoked, the Panel's nine-month period and the officer's further one month run independently of s.153. The single judge rejected that contention and the Revenue appealed to a Division Bench. The matter was decided on 2022 by the High Court. On those facts the High Court held as follows. The overall time limits for completing an assessment continue to apply to proceedings routed through the Dispute Resolution Panel; the proceedings before the Panel remain circumscribed by the limits of time. The Division Bench rejected the contention that DRP proceedings are unfettered by limitation and upheld the single judge's view that a final order passed beyond the s.153 date cannot stand.
Section 144C creates an additional procedural stage inside the assessment, not a fresh proceeding outside it, so the outer limit that governs the assessment governs the stage as well. If the Panel's timelines were read as additive, the assessment could be kept alive well beyond the period Parliament allowed, defeating the purpose of s.153. The Court also noted the practical consequence the Revenue's reading would produce, where a late reference to the TPO effectively lengthens limitation. The reading adopted keeps s.144C's fast-track purpose intact while preserving the statutory outer date. In the words reproduced by the source cited on this page: "circumscribed by the limits of time"
It was decided by the High Court on 2022 and is reported as [2022] 445 ITR 537 (Mad) (Division Bench), affirming Roca Bathroom Products (P) Ltd v DRP [2021] 432 ITR 192 (Mad); SLP (C) No. 34673 of 2022. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 144C, section 153, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. The overall time limits for completing an assessment continue to apply to proceedings routed through the Dispute Resolution Panel; the proceedings before the Panel remain circumscribed by the limits of time. The Division Bench rejected the contention that DRP proceedings are unfettered by limitation and upheld the single judge's view that a final order passed beyond the s.153 date cannot stand. It arises in Assessment & Scrutiny matters, on section 144C, section 153 of the Income Tax Act 1961. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Compute and record the s.153 outer date at the time the draft order is received. Where the DRP directions themselves come after the s.153 date, take the point against the final order rather than the directions. Note the SLP and the later Supreme Court reference, and plead the ground protectively. Check whether the assessment year falls under the 24-month limit applicable where a TPO reference is made.
Still good law. Separate check: the Revenue filed SLP (C) No. 34673 of 2022 against this judgment; the connected question was heard by the Supreme Court in the Shelf Drilling appeals, where a two-judge bench split on 8 August 2025 and referred the issue to a larger bench. The Madras judgment therefore stands but the question is sub judice. That finding was checked against a published source, which is linked on this page, on 2026-08-19. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The overall time limits for completing an assessment continue to apply to proceedings routed through the Dispute Resolution Panel; the proceedings before the Panel remain circumscribed by the limits of time. The Division Bench rejected the contention that DRP proceedings are unfettered by limitation and upheld the single judge's view that a final order passed beyond the s.153 date cannot stand.
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