Final assessment order served after the statutory deadline is invalid

Final assessment order served after the statutory deadline is invalid and barred by limitation.

Issue

Whether a final assessment order passed by the Assessing Officer pursuant to Dispute Resolution Panel (DRP) directions is legally barred by limitation if it is signed within the deadline but is dispatched and served on the assessee after the expiry of the prescribed statutory period.

Facts

The case relates to the final assessment proceedings of the assessee for the Assessment Year 2020-21.
Following the directions issued by the Dispute Resolution Panel (DRP), the Assessing Officer (AO) passed a final assessment order under Section 143(3) read with Section 144C(13).
The final assessment order was dated 31-07-2024 and was manually signed by the Assessing Officer instead of being processed through the Income Tax Business Application (ITBA) portal.
According to the official records placed before the Income Tax Appellate Tribunal, the order was first served on the assessee via email on 21-08-2024.
The formal income-tax e-filing intimation and the copy of the assessment order were subsequently uploaded to the portal on 22-08-2024.

Decision

It was held that a final assessment order under Section 143 read with Section 144C must not only be signed but also dispatched or served within the prescribed statutory time limit.
Merely signing an order on a sheet of paper within the deadline does not satisfy the legal requirement of “completing” an assessment if the order remains within the control of the tax authority.
Because the final order was first delivered and put into transmission to the assessee only on 21-08-2024, the assessment order dated 31-07-2024 was ruled to be clearly barred by limitation.
The impugned final assessment order was consequently quashed, and the case was decided in favor of the assessee.

Key Takeaways

Signing is Not Completion: For an assessment order to be legally “completed” within the limitation period, it must leave the control of the Assessing Officer through actual dispatch or digital transmission before the deadline expires.
Service Standards Control Timelines: Manual signing of orders outside the ITBA system cannot be used by the Revenue to bypass statutory deadlines if the subsequent digital delivery or email tracking proves a delayed dispatch.
Strict Compliance with DRP Timelines: The time limits prescribed under Section 144C(13) for passing an order after receiving DRP directions are mandatory; any delay in issuing the final order serves as a fatal jurisdictional defect that nullifies the entire assessment.

IN THE ITAT KOLKATA BENCH ‘C’

Versuni India Home Solutions Ltd.

DCIT^*

PRADIP KUMAR CHOUBEY, Judicial Member
and Rajesh Kumar, Accountant Member

IT Appeal No. 2091 (KOL) OF 2024
[Assessment year 2020-21]

MAY 20, 2026

Ketan Ved, AR for the Appellant. Praveen Kishore, DR for the Respondent.

ORDER

Rajesh Kumar, Accountant Member. – This is an appeal preferred by the assessee against the order of the DC/ACIT TP 2, Kolkata (hereinafter referred to as the “Ld. CIT(A)”] dated 11.07.2024 for the AY 2020-21.

2. At the time of hearing the ld. Counsel for the assessee pressed ground no.2, which is extracted below:-

“Order under section 143(3) r.w.s. 144C(13) of the Act dated 31 July 2024 (served to appellant on 21 August 2024) is bad in law being time barred (Refer our detailed grounds of appeal on this issue)”

3. The facts in brief are that the Appellant i.e. Versuni India Home Solutions Limited formerly known as Philips Domestic Appliances India Limited (on behalf of Preethi Kitchen Appliances Private Limited) (‘Versuni’) (PAN AAFCP8830K) is engaged in the business of selling consumer household items like mixies, tabletop grinders, coffee makers, chimney, induction cookers, electric rice cookers, electric kettle, electric iron box, electric pressure cooker, vessels for Induction cooker and other related items. Given below is a sequence of events in connection with the assessment proceedings for the year under consideration i.e. AY 2020-21 in a tabular format:

SL No.	Date	Events	Running page number in the appeal set
1.	21-Jul-2023	Order under Section 92CA(3) of the Act passed by the Transfer Pricing officer	152-205
2.	27-Sepp-2023	Draft Assessment Order passed under Section 144C of the Act	144-151
3.	25-Oct-2023	Application Form in 35A alongwith Objections filed by the assessee before the Hon’ble Dispute Resolution Panel (DRP).	41-143
4.	27-Jun-2024	Directions issued by the DRP under section 144C(5) of the Act.	24-40
5.	11-Jul-2024	Order passed by the TPO giving effect to the Directions of the Hon ‘ble DRP	14-21
6.	21-Aug-2024	Order dated 31 July 2024 passed under section 143(3) read with Section 144C(13) served on the Appellant vide email	9-13 Email is on page No. 22 of the appeal set.

4. On the basis of the above sequence of events, it is argued and submitted that since the Hon’ble DRP had issued its Directions under section 144C(5) on 27 June 2024, the Assessing Officer was required to “Complete” the Final Assessment Order u/s. 143(3) r.w.s 144C(13) of the Income-tax Act, within one month from the end of the month in which the DRP directions are received i.e, the Final Assessment Order ought to have been passed by 31 July 2024. 1961.

5. However, the Final assessment order though is dated 31 July 2024, the same was served on the Appellant for the first time only on 21 August 2024, vide an email communication [Refer Page 22 of the Appeal Set]. It is therefore submitted and it will be appreciated that the Final Assessment Order thereforeis clearly barred by limitation. The ld. AR also submitted that the Ld. AO has passed a “manual order” (not through the Income Tax Business Application i.e. ITBA) dated 31 July 2024. However, the same was “served” on the Appellant only on 21 August 2024. Besides, the Income-Tax e-filing and the Intimation letter were uploaded only on 22 August 2024.

6. The ld. AR submitted that the aforesaid factual position has been also accepted by the Ld. AO in his report dated 04 June 2025 filed before the Hon’ble Bench on 08 October 2025. In the said report, the Ld. AO himself confirmed that the Final Assessment Order was manually signed purportedly on 31 July 2024 and the intimation letter was generated only on 02 August 2024. There is no mention whatsoever as to when was the same served on the Appellant.

7. Then ld. AR submitted that instead, in the said report, the Ld. AO further stated that the provisions of section 144C(13) does not mandate that the Final Assessment order is required to be “served or intimated to the assessee company and only requires that the order be “completed” withing the time limit as per the Act. That completion, it is argued is only “signing” of the Order. The ld. AR submitted and it will be appreciated that it is not in accordance with the law laid down by the Hon’ble Supreme Court in the case of CCE v. M.M. Rubber and Co. (SC) wherein it has been as under:

12. It may be seen therefore, that, if an authority is Authorised to exercise a power or do an act affecting the rights of parties, he shall exercise that power within the period of limitation prescribed therefore. The order or decision of such authority comes into force or, becomes operative or becomes an effective order or decision on and from the date when it is signed by him. The date of such order or decision is the date on which the order or decision was passed or made: that is to say when he ceases to have any authority to tear it off and draft a different order and when he ceases to have any locus poenitentiae. Normally that happens when the order or decision is made public or notified in some form or when it can be said to have left his hand. The date of communication of the order to the party whose rights are affected is not the relevant date for purposes ofdetermining whether the power has been exercised within the prescribed time.

8. Further, reliance in this regard is also placed on the following decisions of the Hon’ble Karnataka High Court in the following cases wherein the ratio laid down by the Hon’ble Supreme Court has be applied/followed and it has been duly held that an order if dispatched post the statutory limitation date and if no substantial records are available to prove that they were dispatched before the limitation date, then such orders is invalid and barred by law of limitation.

•

Maharaja Shopping Complex v. DCIT [IT Apeeal No. 832 of 2008, dated 14-10-2024]; and

•

CIT v. B J N Hotels Ltd. [2016] 382 ITR 110 (Karnataka).

9. Here, it would not be out of place to also refer to the E-Assessment Scheme, 2019, notified by CBDT in terms of the assessment proceedings were carried out. Reference can be made to Rule 10 of the said Scheme which prescribes the manner of delivery of electronic records. The said Rule is reproduced hereunder for ready reference:

“10. Delivery of electronic record.–(1) Every notice or order or any other electronic communication under this Scheme shall be delivered to the addressee, being the assessee, by way of-

(a)

placing an authenticated copy thereof in the assessee’s registered account; or

(b)

sending an authenticated copy thereof to the registered email address of theassessee or his authorised representative; or

(c)

uploading an authenticated copy on the assessee’s Mobile App; and followed by a real time alert.

(2)

Every notice or order or any other electronic communication under this Scheme shall be delivered to the addressee, being any other person, by sending an authenticated copy thereof to the registered email address of such person, followed by a real time alert.

(3)

The Assessee shall file his response to any notice or order or any other electronic communication, under this Scheme, through his registered account, and once an acknowledgement is sent by the National e-assessment Centre containing the hash result generated upon successful submission of response, the response shall be deemed to be authenticated.

(4)

The time and place of dispatch and receipt of electronic record shall be determined in accordance with the provisions of section 13 of the Information Technology Act, 2000 (21 of 2000).”

10. In the instant case, the said Final Assessment Order dated 31 July 2024 was emailed to the Appellant only 21 August 2024 (albeit without a real time alert) and hence for the first time the same was delivered to the Appellant only that date which is clearly and admittedly beyond the due date prescribed in section 144C (13) of the Act thereby rendering the same barred by limitation.

11. Further, Rule 9 of the said Scheme prescribes for authentication of electronic record, the same is reproduced hereunder for ready reference:

“9. Authentication of electronic record. — For the purposes of this Scheme, an electronic record shall be authenticated by the originator by affixing his digital signature in accordance with the provisions of sub-section (2) of section 3 of the Information Technology Act, 2000 (21 of 2000):

12. Reliance in this regard is also placed on the decisions of the Delhi Bench of the ITAT wherein it has been inter-alia held that an Assessment Order which is signed manually is invalid when the proceedings are carried on under the E-assessment Scheme:

•

Outsytems Singapore Pte. Ltd. v. Dy. CIT (Delhi – Trib.) (dated 10 December 2025)

•

Navyug Technologies Private Limited v. ITO [IT Appeal No. 4579 (Delhi) of 2024, dated 16-2-2026]

13. During the course of hearing on 25th February 2026, the Ld. DR also relied upon the decision of the Delhi High Court in the case of Suman Jeet Agarwal v. ITO (Delhi)/[2022] 449 ITR 517 (Delhi) to contend that the Order is validly passed.

14. We note that said reliance is misconceived and the said decision in fact supports the Appellant’s contention. The said decision was rendered in the context of issuance of notice under section 148 read with section 149, where the expression used is “shall be issued” within the prescribed period of limitation. The Hon’ble Delhi High Court categorically held that mere generation or signing of a notice does not amount to issuance and that “despatch” is sine qua non for issuance. The Hon’ble High Court has further clarified that a notice is said to be issued only when it leaves the control of the originator, i.e., upon due despatch refer paragraph Nos. 25.12 and 26.21 reproduced hereunder for ready reference:

25.12 The review of the aforesaid judgments of the Supreme Court and the several High Courts shows that all Courts have consistently held that the expression ‘issue’ in its common parlance and its legal interpretation means that the issuer of the notice must after drawing up the notice and signing the notice, make an overt act to ensure due despatch of the notice to the addressee. It is only upon due despatch, that the notice can be said to have been ‘issued’. —-

…..

26.21 We therefore answer question no. (II) in affirmative and hold that despatch as per Section 13 of the Act of 2000, is a sine qua non and happens when the electronic mall message leaves the ITBA’s servers.

15. Applying the said ratio to the present case, the Assessment Order, though dated 31 July 2024, was admittedly served only on 21 August 2024, hence the same can be said to have been passed only when it is put beyond the control of the Assessing Officer which is (in terms of Rule 10) by way of dispatch /communication and not when it is merely signed or dated. In view of the foregoing facts and discussion, we opine that Assessment Order passed on 31 July is clearly barred by limitation as the same was served on the Appellant for the only on 21 August 2024.

16. In the result, the appeal of the assessee is allowed.