LN, January 28, 2026 : The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed the final assessment order passed against Oracle India Private Limited for Assessment Year 2007–08, holding that the order was barred by limitation despite having been routed through the Dispute Resolution Panel (DRP).
The Bench, comprising Judicial Member Yogesh Kumar U.S. and Accountant Member Manish Agarwal, ruled that the DRP mechanism under Section 144C of the Income Tax Act, 1961 does not override the statutory time limits prescribed under Section 153. It held that DRP proceedings are only a continuation of the assessment process and do not constitute an independent or self-contained code.
The matter arose out of cross-appeals filed by the assessee and the Revenue challenging multiple orders passed under Sections 143(3), 144C and 154 of the Act. The decisive issue, however, was an additional legal ground raised by Oracle India contending that the final assessment order dated 30 October 2014 had been passed well beyond the permissible statutory time limit and was therefore void ab initio.
Oracle India argued that the outer time limit for completing the assessment expired on 29 November 2013, whereas the Assessing Officer passed the final order almost a year later. The assessee relied heavily on the Madras High Court’s judgment in CIT v. Roca Bathroom Products Pvt. Ltd., which held that Sections 144C and 153 are interdependent and that the non obstante clause in Section 144C does not exclude the operation of limitation under Section 153.
The Revenue opposed adjudication of the limitation issue, submitting that the question of law relating to the interplay between Sections 144C and 153 is pending before a Larger Bench of the Supreme Court in the appeal arising from Shelf Drilling Ron Tappmeyer Ltd., and therefore the Tribunal should defer its decision.
Rejecting this contention, the ITAT noted that there is no stay on the Madras High Court’s ruling in Roca Bathroom Products and that Oracle India had not relied on the Bombay High Court decision in Shelf Drilling, which is under interim restraint. The Tribunal reiterated the settled position that, in the absence of a contrary ruling, a non-jurisdictional High Court decision is binding on the Tribunal. It further observed that Section 158AB of the Act already provides a statutory mechanism enabling the Revenue to protect its interests where identical questions of law are pending before higher courts, making deferral unnecessary.
After examining the statutory framework and the detailed date chart on record, the Tribunal held that DRP proceedings form an integral part of the assessment process and must culminate within the maximum time limit prescribed under Section 153, including any extensions available in transfer pricing cases. On facts, the final assessment order dated 30 October 2014 was clearly beyond the permissible limitation period.
Accordingly, the ITAT quashed the final assessment order as time-barred. However, noting that the issue is pending consideration before the Supreme Court, the Tribunal granted liberty to both the assessee and the Revenue to seek revival of the appeals on other issues, should future developments in law so require.
Cause Title: Oracle India Private Limited v. ACIT
Case No.: ITA No. 6907/DEL/2014 (A.Y. 2007–08)
Coram: Yogesh Kumar U.S. (Judicial Member) and Manish Agarwal (Accountant Member)
