Section 153

Section 153 — the law in short

What the courts have decided on section 153, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• ACIT v Shelf Drilling Ron Tappmeyer Supreme CourtCuts both ways
  Has the Supreme Court settled whether the s.144C nine-month DRP process runs over and above the s.153 limitation?
  A two-judge bench heard the Revenue's appeals against the Bombay High Court in Shelf Drilling and delivered a split verdict. One judge held the s.144C timelines operate independently of s.153(3); the other held the whole s.144C procedure must finish within the s.153(3) period. The matter was referred to the Chief Justice of India for an appropriate bench, so there is no binding ratio.
• GE Oil & Gas India P Ltd v Addl/Jt/Dy/Asst CIT High CourtCuts both waysValidity unconfirmed
  You are an eligible assessee with a transfer pricing adjustment and the faceless unit passed a final order instead of a draft. What relief will the court give?
  The order goes, but not always as a clean quashing. The Madras High Court set aside a final order passed three days after the show cause notice cum draft assessment order and directed that the impugned order be treated as a draft assessment order, leaving the assessee to work out its remedies against it under s.144B.
• Pfizer Healthcare India P Ltd v JCIT High CourtHelps taxpayer
  The TPO's order was one day late. Does that kill the transfer pricing addition?
  Yes. The sixty days run backwards from the s.153 limitation date, excluding that date itself, so an order passed on the sixtieth day is out of time. The requirement is mandatory, not directory, limitation goes to jurisdiction, and an order a single day late is non est along with everything built on it.
• Nokia India P Ltd v Addl CIT High CourtHelps departmentValidity unconfirmed
  The special audit direction was passed inside the limitation period but served on me afterwards. Does the section 153 exclusion run from the date of the order or from the date I received it?
  From the date of the order. The Delhi High Court held that the starting point of the exclusion in clause (iii) of Explanation 1 to section 153 is the date on which the Assessing Officer directs the assessee to get the accounts audited, and not the date on which the assessee receives that direction. It also held that an order under section 142(2A) is communicated for this purpose when it is sent out, so a direction signed and despatched on the last day of limitation is in time even though it reaches the assessee later. The writ petition was dismissed and the assessment proceedings were held not to have abated.
• CIT v Roca Bathroom Products High CourtCuts both ways
  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.
• Shelf Drilling Ron Tappmeyer v ACIT High CourtCuts both ways
  Does the DRP route under s.144C buy the Assessing Officer extra time, or must the whole assessment still finish within the s.153 limitation?
  Non-resident assessees argued that the overall limitation in s.153 continued to govern even where the DRP route was taken, so that a final order passed long after that date was time-barred. The Bombay High Court agreed, holding that s.153 is not excluded by s.144C and that the non obstante clause operates only to the limited extent of the one-month window for passing the final order after the Panel's directions.
• Naina Saluja v DCIT ITATHelps taxpayerValidity unconfirmed
  The officer sent my property to the Valuation Officer. Does that give him extra time to finish the assessment?
  No, not where the reference is under s.50C. The extension in clause (iv) of Explanation 1 to s.153 is given only where the Assessing Officer makes a reference to the Valuation Officer under s.142A(1); a reference under s.50C or s.55A does not stop the clock. The assessment, completed after the ordinary period had run out, was quashed as barred by limitation.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.