Pr. Commissioner of Income Tax, Bangalore & Assistant Commissioner of Income Tax, LTU v. M/s. Yokogawa India Ltd.

1. FACTS OF THE CASE

Revenue appealed the Tribunal order of 11 March 2021 in IT(TP)A 692/Bang/2016. The draft assessment dated 10 March 2016 reached Yokogawa on 12 March. Objections filed on 13 April were rejected by the DRP on 24 August as belated; the final assessment followed on 31 August 2016.

Source: PDF pp.1–4, 7

2. DISCUSSION BY THE COURT

The assessee reported receipt on 14 March, when security personnel handed the Saturday delivery to the concerned officer. Revenue said that statement caused the AO to await the DRP. The Court held the AO had to verify actual service and timeliness from available postal records, rather than rely on the assessee’s stated date.

Source: PDF pp.5–7, 14–16

3. JUDICIAL DECISION

Only timely objections restrained completion of assessment. Belated objections did not require the AO to await their dismissal; the section 144C(3)–(4) route remained applicable. The Court sustained the finding that the 31 August assessment was time-barred.

Source: PDF pp.12–18, paras 10–17

4. OUTCOME

Revenue’s appeal dismissed; no substantial question of law arose and the Tribunal’s limitation ruling stood.

Source: PDF p.18, para 17

5. Expert Comments

AKHB editorial analysis, distinct from the Court’s findings.

Track service independently from internal circulation

The accepted service date was 12 March, not the later date when the tax officer within the company received the document. Companies should preserve receipt and dispatch records and route draft orders promptly. The AO also had an independent duty to check the postal record; an incorrect date in the assessee’s intimation did not replace actual delivery.

Source: PDF pp.7, 15–16, paras8, 14

Two statutory paths cannot be mixed

The Court distinguished assessment following timely DRP objections from finalisation where no timely objections exist. A late filing does not suspend the AO’s power or preserve the later DRP-based timetable. The useful chronology therefore includes actual service, objection filing and the deadline under subsection (4), rather than starting the calculation only when the DRP eventually rejects the filing.

Source: PDF pp.12–15, 17–18, paras10–13, 16

The limitation result did not approve the late objection

The Court did not condone the taxpayer’s delay or accept 14 March as service. It treated alleged misleading conduct as unable to alter the plain statutory language, without deciding that allegation conclusively. The substantive transfer-pricing adjustment was not adjudicated here; the surviving relief was invalidity of the final assessment on limitation.

Source: PDF pp.16–18, paras15–17