ITAT Delhi Quashes Final Assessment as Time-Barred under Section 153

Background of the Dispute

The appeal in Motorola Solutions India Private Limited Vs DCIT (ITAT Delhi) revolved around the validity of a Final Assessment Order framed under Section 143(3) read with Section 144C(13) and Section 144B of the Income Tax Act 1961 for **Assessment Year 2020-21`.

The core controversy was whether the Final Assessment Order dated 26/07/2024 was completed within the statutory time limit mandated under Section 153(1) read with Section 153(4) or whether it stood barred by limitation, thereby rendering it void in law.

The assessee asserted that the assessment was completed beyond the outer time limit prescribed in Section 153, and therefore the order deserved to be annulled. The Revenue, on the other hand, urged that the limitation issue itself is unsettled and pending before the Hon’ble Supreme Court, and thus the Tribunal should defer adjudication.

Assessee’s Primary Ground

The assessee specifically raised a ground challenging the jurisdiction of the Assessing Officer (A.O.), contending that:

  • The Final Assessment Order dated 26/07/2024 was time-barred,
  • The order violated the limitation framework under Section 153(1) read with Section 153(4), and
  • Consequently, the order was bad in law and void ab initio.

The assessee relied heavily on the judgment of the Hon’ble High Court of Madras in:

Commissioner of Income-tax Vs. Roca Bathroom Products (P.) Ltd. [2022] 445 ITR 537 (Madras)

and also on a series of rulings by the Hyderabad Bench of the ITAT, which had already applied this ratio to similar disputes and quashed time-barred assessments.

Revenue’s Objection and Prayer for Deferral

The Department’s Representative opposed immediate adjudication on limitation and submitted that:

  • The interplay between Section 144C and Section 153 is an unsettled legal question.
  • The issue is already under consideration before the Hon’ble Supreme Court in ACIT Vs. Shelf Drilling Ron Tappmeyer Ltd. in Special Leave to Appeal (C) Nos. 20569-20572/2023.
  • The Hon’ble Supreme Court has passed an interim order dated 22/09/2023 in relation to the Bombay High Court decision in Shelf Drilling Ron Tappmeyer Ltd. Vs. Assistant Commissioner of Income Tax (International Taxation) Circle-4(2)(1) Mumbai, 2023 (8) TMI 460 - Bombay High Court, directing that the said High Court decision shall not be cited as a precedent in any subsequent matter.
  • Since a split verdict has been delivered by the Supreme Court in ACIT (International Taxation) v. Shelf Drilling Ron Tappmeyer Ltd. [2025] 177 taxmann.com 262 (SC) and the issue has been referred to a Larger Bench, the Tribunal should refrain from deciding the limitation question at this stage.

On that basis, the Revenue pleaded that:

  • The Tribunal should defer the hearing and adjudication of the limitation issue; and
  • The appeal be kept pending till the Larger Bench of the Supreme Court finally resolves the legal controversy.

The Revenue also filed detailed written submissions elaborating its position on:

  • The effect of the Supreme Court’s interim restraint on relying upon the Bombay High Court’s Shelf Drilling decision;
  • The implications of leave granted by the Supreme Court in CIT v. Roca Bathroom Products (P.) Ltd. [2023] 147 taxmann.com 224 (SC); and
  • Its interpretation that Section 144C operates as a special mechanism independent of the limitation prescribed in Section 153.

Reference to Earlier ITAT and High Court Decisions

Reliance on Prior ITAT Delhi and Hyderabad Bench Orders

The Delhi Bench noted that identical contentions had recently been examined in:

Teva Pharmaceutical & Chemical Industries India Private Limited Vs. Assessment Unit, Income Tax Department/DCIT, ITA No. 4197/Del/2024, order dated 19/01/2026

In that case, the Tribunal had already:

  • Rejected similar preliminary objections by the Revenue;
  • Declined to defer matters merely because the issue was under consideration by the Supreme Court; and
  • Followed the ratio of Roca Bathroom Products (P.) Ltd. and several Hyderabad Bench decisions.

The assessee in the present appeal also cited a long list of Hyderabad Bench rulings (e.g., Aveva Solutions India LLP Vs. ITO, M/s Concentrix Catalyst Technologies (P.) Ltd. Vs. Dy CIT, Shakti Hormann Private Limited Vs. DCIT, Interwrap Corporation Private Ltd Vs. DCIT, etc.), where: