ITAT Delhi: DRP Route Does Not Extend Limitation; Orders Beyond Section 153 Time Barred

January 23, 2026 : The Delhi Bench of the Income Tax Appellate Tribunal has held that final assessment orders passed under the Dispute Resolution Panel (DRP) mechanism must adhere to the overall limitation period prescribed under Section 153 of the Income Tax Act, and cannot be sustained if passed beyond such statutory timeline.

In BT India Private Limited v. ACIT, Circle-4(2), Delhi (ITA Nos. 533 & 1701/Del/2022), the Tribunal comprising Judicial Member Vikas Awasthy and Accountant Member Sanjay Awasthy allowed the assessee’s appeals for Assessment Years 2017–18 and 2018–19, holding that the impugned assessment orders were time-barred.

The dispute centered on whether the timeline under Section 144C governing the DRP procedure operates independently or must be read in conjunction with Section 153, which prescribes the outer time limit for completion of assessments. The assessee contended that even after factoring in the DRP process, the final orders were passed beyond the permissible limitation period under Section 153.

Rejecting the Revenue’s objection that the issue is pending before the Supreme Court, the Tribunal held that mere pendency of a matter before a higher forum does not preclude adjudication when no binding stay exists on the precedent relied upon. It noted that the decision of the Madras High Court in CIT v. Roca Bathroom Products Pvt. Ltd. continues to hold the field and can be relied upon.

On merits, the Tribunal reaffirmed that Sections 144C and 153 are not mutually exclusive but are interdependent and overlapping. It observed that the DRP proceedings form part of the overall assessment framework, and therefore, the final assessment order under Section 144C(13) must still be passed within the limitation period prescribed under Section 153.

Examining the factual timeline, the Tribunal noted that for AY 2017–18, the final order was required to be passed by 30.09.2021 but was actually passed on 28.02.2022, and for AY 2018–19, against the due date of 30.09.2021, the order was passed on 30.06.2022. Both were beyond the statutory deadline.

Accordingly, the Tribunal held the assessment orders to be barred by limitation and quashed them. However, it clarified that both parties would be at liberty to seek revival of proceedings if the Supreme Court settles the issue contrary to the view relied upon.