# Assistant Commissioner of Income Tax (International Taxation) & Others v. Shelf Drilling Ron Tappmeyer Ltd. Etc

- **Citation:** 2025 INSC 946
- **Court:** Supreme Court of India
- **Decided:** 2025-08-08
- **Bench:** B.V. Nagarathna, Satish Chandra Sharma
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/assistant-commissioner-of-income-tax-international-taxation-others-v-shelf-38619
- **Pages:** 121

## Headnote

The present matter raised important questions of law relating to
interpretation and interplay between Section 144C and Section
153(3) of the Income Tax Act, 1961. The question for consideration
was on the applicability of Section 153 to a proceeding under
Section 144C namely, whether the period of eleven months as
envisaged under Section 144C should be over and above the
limitation period prescribed, particularly, under Section 153(1) or (3),
as the case may be. In other words, whether the time consumed
for concluding the proceeding under Section 144C has to be
subsumed within the limitation prescribed under Section 153(1)
or (3) or as the case may be.
Headnotes†
Income Tax Act, 1961 - ss.144C and 153(3) - Limitation
periods and procedures prescribed in these two sections -
Interpretation and interplay between s.144C and s.153(3) -
Whether time consumed for concluding the proceeding
u/s.144C has to be subsumed within the limitation prescribed
u/s.153(1) or (3) or as the case may be.
Held [Per Satish Chandra Sharma, J.]:
1. In interpreting the provisions that form the subject matter of
the present controversy, a fine balance has to be maintained
between ensuring that the revenue authorities have ample time and
opportunity to assess income and ensure that those who attempt
tax evasion, are prosecuted, and the income escaping taxation,
is brought within the tax fold - At the same time, the rights of the
Assessees, of not having their returns scrutinized after a substantial
* Author
Ed. Note: Hon'ble Mrs. Justice B.V. Nagarathna and Hon'ble Mr. Justice Satish Chandra Sharma pronounced
separate judgments.
[2025] 8 S.C.R.
1575
Assistant Commissioner of Income Tax (International Taxation)
& Others v. Shelf Drilling Ron Tappmeyer Ltd. Etc.
period of time, must also be balanced - If the entire procedure
prescribed and contemplated in terms of Section 144C of the
Income Tax Act must be subsumed within the overall time period
prescribed under Section 153 of the Income Tax Act, it would result
in a complete catastrophe for recovering lost tax - The time period
within which the Assessing Officers would have to pass orders
would be negligible - This would be totally unworkable - Section
153 in its operation does not distinguish between persons who
are suffering assessment under Section 144C of the Income Tax
Act or otherwise. [Paras 30, 31, 32, 33]
2. The High Courts of Bombay and Madras have taken the view
that the fact that no exception has been carved out for Section
144C of the Income Tax Act in any of the sub-sections of Section
153 of the Income Tax Act makes it clear that the time of Section
144C of the Income Tax Act proceedings must necessarily conclude
within the time period prescribed under Section 153 of the Income
Tax Act - This view can be agreed upon only to a limited extent,
insofar as the timelines prescribed under Section 153 of the Income
Tax Act must apply to proceedings under Section 144C of the
Income Tax Act, but only insofar as they relate to the passing of
the Draft Assessment Order contemplated under Sub-Section (1)
of Section 144C of the Income Tax Act. [Para 35]
3. Sub-Section (4) and Sub-Section (13) of Section 144C of the
Income Tax Act provide clear and unequivocal non obstante clauses,
which remove the application of Section 153 of the Income Tax
Act and the timelines prescribed thereunder - No doubt SubSection (4) and Sub-Section (13) of Section 144C of the Income
Tax Act prescribe very specific timelines for the Assessing Officer
to complete and pass the Final Assessment Order, but these
timelines are independent of the timelines contemplated in Section
153 of the Income Tax Act, and operate in addition to the timelines
contemplated in Section 153 of the Income Tax Act. [Paras 36, 37]
4. The requirements of Section 153 of the Income Tax Act in
terms of timeline are strictly applicable to Section 144C (1) of the
Income Tax Act, that is the stage at which the Draft Order has to
be passed by the Assessing Off

## Text

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[2025] 8 S.C.R. 1574 : 2025 INSC 946
Assistant Commissioner of Income Tax
(International Taxation) & Others
v.
Shelf Drilling Ron Tappmeyer Ltd. Etc.
(Civil Appeal No(s). 10586-10589 of 2025)
08 August 2025
[B.V. Nagarathna* and Satish Chandra Sharma,* JJ.]
Issue for Consideration
The present matter raised important questions of law relating to
interpretation and interplay between Section 144C and Section
153(3) of the Income Tax Act, 1961. The question for consideration
was on the applicability of Section 153 to a proceeding under
Section 144C namely, whether the period of eleven months as
envisaged under Section 144C should be over and above the
limitation period prescribed, particularly, under Section 153(1) or (3),
as the case may be. In other words, whether the time consumed
for concluding the proceeding under Section 144C has to be
subsumed within the limitation prescribed under Section 153(1)
or (3) or as the case may be.
Headnotes†
Income Tax Act, 1961 - ss.144C and 153(3) - Limitation
periods and procedures prescribed in these two sections -
Interpretation and interplay between s.144C and s.153(3) -
Whether time consumed for concluding the proceeding
u/s.144C has to be subsumed within the limitation prescribed
u/s.153(1) or (3) or as the case may be.
Held [Per Satish Chandra Sharma, J.]:
1. In interpreting the provisions that form the subject matter of
the present controversy, a fine balance has to be maintained
between ensuring that the revenue authorities have ample time and
opportunity to assess income and ensure that those who attempt
tax evasion, are prosecuted, and the income escaping taxation,
is brought within the tax fold - At the same time, the rights of the
Assessees, of not having their returns scrutinized after a substantial
* Author
Ed. Note: Hon'ble Mrs. Justice B.V. Nagarathna and Hon'ble Mr. Justice Satish Chandra Sharma pronounced
separate judgments.
[2025] 8 S.C.R.
1575
Assistant Commissioner of Income Tax (International Taxation)
& Others v. Shelf Drilling Ron Tappmeyer Ltd. Etc.
period of time, must also be balanced - If the entire procedure
prescribed and contemplated in terms of Section 144C of the
Income Tax Act must be subsumed within the overall time period
prescribed under Section 153 of the Income Tax Act, it would result
in a complete catastrophe for recovering lost tax - The time period
within which the Assessing Officers would have to pass orders
would be negligible - This would be totally unworkable - Section
153 in its operation does not distinguish between persons who
are suffering assessment under Section 144C of the Income Tax
Act or otherwise. [Paras 30, 31, 32, 33]
2. The High Courts of Bombay and Madras have taken the view
that the fact that no exception has been carved out for Section
144C of the Income Tax Act in any of the sub-sections of Section
153 of the Income Tax Act makes it clear that the time of Section
144C of the Income Tax Act proceedings must necessarily conclude
within the time period prescribed under Section 153 of the Income
Tax Act - This view can be agreed upon only to a limited extent,
insofar as the timelines prescribed under Section 153 of the Income
Tax Act must apply to proceedings under Section 144C of the
Income Tax Act, but only insofar as they relate to the passing of
the Draft Assessment Order contemplated under Sub-Section (1)
of Section 144C of the Income Tax Act. [Para 35]
3. Sub-Section (4) and Sub-Section (13) of Section 144C of the
Income Tax Act provide clear and unequivocal non obstante clauses,
which remove the application of Section 153 of the Income Tax
Act and the timelines prescribed thereunder - No doubt SubSection (4) and Sub-Section (13) of Section 144C of the Income
Tax Act prescribe very specific timelines for the Assessing Officer
to complete and pass the Final Assessment Order, but these
timelines are independent of the timelines contemplated in Section
153 of the Income Tax Act, and operate in addition to the timelines
contemplated in Section 153 of the Income Tax Act. [Paras 36, 37]
4. The requirements of Section 153 of the Income Tax Act in
terms of timeline are strictly applicable to Section 144C (1) of the
Income Tax Act, that is the stage at which the Draft Order has to
be passed by the Assessing Officer - The non-obstante clauses
contained in Sub-Section (4) and Sub-Section (13) of Section 144C
of the Income Tax Act only extend the timeline for the passing of
the final order and not that of the Draft Order - Sub-Section (4)
operates and comes into existence only in cases in situations
when an Assessee subjected to Section 144C of the Income Tax
1576
[2025] 8 S.C.R.
Supreme Court Reports
Act accepts the variations proposed in the Draft Assessment Order
or if the period of filing objections before the Dispute Resolution
Panel expires - The conjoint reading of Section 144C(1), Section
153, and Section 144C(4) of the Income Tax Act make it abundantly
clear that the Assessing Officer is obliged to comply with the
requirements of Section 153 of the Income Tax Act insofar as it
relates to passing the Draft Assessment Order and that he must also
necessarily pass the Final Assessment Order within an additional
period of one month in case the variations are accepted or the
period of limitation for filing objections expires - Similarly, in the
event objections were filed, Section 144C(12) of the Income Tax
Act states that such objections have to be decided and directions
have to be issued within a period of 9 months - Sub-Section (13)
makes it clear that regardless of how long it takes the Dispute
Resolution Panel to pass its directions, the Assessing Officer will
only have an additional period of one month to pass the Final
Assessment Order - This means that if the Dispute Resolution
Panel disposes of the objections and issues directions within a
period of one month from the date of filing of objections, the Final
Assessment Order must be passed within one month from such
date which will be practically impossible. [Paras 39, 40, 41]
5. The non-obstante clauses in Section 144C must be harmoniously
construed - The timelines prescribed under Section 153 will be
applicable upto the stage of passing the draft assessment order
under Section 144C(1) - Once the procedure under Section 144C(1)
gets triggered, the time available with the Dispute Resolution Panel
to carry out the process conceived under Section 144C(5) to Section
144C(12) and the time available with the assessing officer under
Section 144C(13), will be over and above the timelines prescribed
under Section 153 - This interpretation would ensure a smooth
functioning of Section 153 and Section 144C. [Para 46]
6. Section 153 is not the only provision for prescribing time limits
for assessments and reassessments - Had Section 153 subsumed
the timelines prescribed under Section 144C, there was no occasion
for the Parliament to specifically mention Section 144C in Section
92CD(5) which too provided alternate timelines, contrary to the
timelines prescribed under Section 153 - This too is an indication
of the intention of the Parliament to operate the timelines under
Section 144C over and above Section 153. [Paras 47, 48]
7. The two situations contemplated under the Income Tax Act in
terms of assessment under Section 144C of the Income Tax Act
[2025] 8 S.C.R.
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Assistant Commissioner of Income Tax (International Taxation)
& Others v. Shelf Drilling Ron Tappmeyer Ltd. Etc.
are vastly different and will obviously take varying amounts of
time depending on whether objections are filed before the Dispute
Resolution Panel or not - This option is only exercised by the
Assessee - If adequate opportunity or time is not granted to an
Assessee or if the Dispute Resolution Panel is forced to decide
the objections in a very quick manner inhibited by the timelines
prescribed under Section 153 of the Income Tax Act, it would
amount to a violation of the Principles of Natural Justice. [Para 56]
8. In cases of assessment proceedings under Section 144C,
Section 153 of the Income Tax Act and all its sub-sections are
fully applicable, and the timelines prescribed therein apply to
the Draft Assessment Order, which is to be passed under SubSection (1) of Section 144C of the Income Tax Act - If proceedings
under Section 92C are also invoked, the time period in view of
Section 153(4) of the Income Tax Act would be extended by a
period of 12 months - The fixed time periods prescribed under
Section 144C of the Income Tax Act must be adhered to, and a
final assessment order must be passed either within one month
of the Draft Assessment Order if the situation contemplated under
Sub-Section (4) takes place, or within a period of 11 months
from the passing of the Draft Assessment Order if the Assessee
opts to file objections before the Dispute Resolution Panel.
[Paras 59, 60]
Held [Per B.V. Nagarathna, J.] (Dissenting):
1. Sub-section (3) of S.153 which prescribes the limitation period
does not make any distinction between an eligible assessee and
any other assessee - The non-obstante clause in sub-section (1)
of S.144C implies that it overrides all sections of the Act contrary
to the procedure contemplated under S.144C inasmuch as it
contemplates a special procedure insofar as eligible assessees
are concerned - This means that insofar as the eligible assessees
are concerned, their assessment is subject to a distinct procedure
under S.144C, wherein a draft assessment order has to be made
in the first instance - The non-obstante clause in sub-section (1)
of S.144C has been invoked by the Parliament in order to make
a distinction between eligible assessees and other category of
assessees in the matter of assessment/re-assessment where a
draft assessment order has to be made by the Assessing Officer
in the first instance leading to DRP directions being issued to the
1578
[2025] 8 S.C.R.
Supreme Court Reports
Assessing Officer in case there is a reference to the DRP, which
is not so in the case of other assesses - Thus, the non-obstante
clause in sub-section (1) of S.144C is not related to the overall
limitation period prescribed under S.153 but with the aspect of
there being a distinct procedure which has been envisaged in the
case of only eligible assessees - If the non-obstante clause under
sub-section (1) of S.144C is to be construed only in the context
of the limitation period under S.153 inasmuch as the procedure
contemplated under S.144C would be a time frame to be considered
over and above what is contemplated under S.153(3), it would
lead to an absurd result - That is why, the non-obstante clause
in sub-section (1) of S.144C cannot be held to be with reference
to S.153(3) at all - The scope and ambit of the two provisions
are distinct inasmuch as S.153 deals with limitation period with
respect to completion of assessments and reassessments while
S.144C deals with a procedure to be complied with for making an
assessment order only in the case of eligible assesses - There
is no contradiction between S.144C and S.153 - Therefore, subsection (1) of S.144C has to be read as prescribing a unique
procedure insofar as eligible assessees are concerned inasmuch
as notwithstanding anything contrary contained in the Act vis-à-vis
various categories of assesses - S.144C is applicable only in
the case of eligible assessees and not to any other category of
assessee. [Paras 12.12, 12.13 and 12.14]
2. If S.144C applies to an eligible assessee, then the maximum
period that is contemplated for passing the final assessment order
is eleven months from the date of receipt of the draft order by the
eligible assesses; the shortest period would be two months, when
the draft order is accepted by the eligible assessee, for passing the
final order - Also, nine months is the maximum period for the DRP
to issue directions to the Assessing Officer in case objections are
received to a draft assessment order from an eligible assessee.
[Para 12.18]
3. In cases where S.144C applies, the maximum period stipulated
for completion of a final assessment order being eleven months
would still be within the limitation period of twelve months prescribed
under the proviso to S.153(3) - This would mean that a draft
assessment order has to be forwarded by the Assessing Officer
to the eligible assessees within one month from the end of the
financial year in which the order under S.254 is received by the
Principal Chief Commissioner, Chief Commissioner etc., as the
[2025] 8 S.C.R.
1579
Assistant Commissioner of Income Tax (International Taxation)
& Others v. Shelf Drilling Ron Tappmeyer Ltd. Etc.
case may be - Then, one month's time is the shortest period of
time to prepare the draft assessment order under S.144C by the
concerned Assessing Officer. [Para 12.19]
4. As soon as the papers are received by the Principal Chief
Commissioner or Chief Commissioner etc., pursuant to an order
passed under S.254, the same has to be forwarded and ultimately
the final assessment order has to be made within twelve months
from the end of the financial year in which the order under S.254
was received by the Principal Chief Commissioner or Chief
Commissioner etc., as the case may be - In which event, this would
imply that a copy of the same would also have to be simultaneously
sent to the Assessing Officer concerned and the minimum period
that the Assessing Officer would have for making the draft order
would be thirty days, depending on when the order is received by
the Principal Chief Commissioner or Chief Commissioner, etc., as
the case may be. [Para 12.20]
5. The expression "the assessing officer shall, in conformity with
the directions, complete notwithstanding anything to the contrary
contained in s.153 or 153(B), the assessment...within one month
from the end of the month in which such direction is received"
in sub-section (13) of S.144C has to be harmoniously read with
sub-section (3) of S.153 - It would inevitably mean that the
procedure contemplated under S.144C applicable to an eligible
assessee has to be concluded within a period of twelve months
as stipulated in proviso to sub-section (3) of S.153. [Para 14.3]
6. Even when the Assessing Officer has to follow the procedure
prescribed under S.144C, the same has to be commenced and
concluded in terms of sub-section (3) of S.153 - The said provision is
applicable to an eligible assessee inasmuch as when the procedure
under S.144(C)(1) has to be followed - Consequently, the rest of
the provisions of S.144C would become applicable - This is only
when the Assessing Officer intends to make any variation which
is prejudicial to the interest of the eligible assessee - Then a draft
order has to be made in the first instance - Even in such a case,
the assessment has to be concluded within twelve months as
stipulated in S.153(3) where there has been remand by the Tribunal
to the Assessing Officer under S.254 - Within the period of twelve
months prescribed under S.153(3), the Assessing Officer has to
ensure that the entire procedure under S.144C is completed (as and
when it is applicable) and pass a final assessment order. [Para 15]
1580
[2025] 8 S.C.R.
Supreme Court Reports
7. The Assessing Officer has to be prompt, attentive and conscious
of passing an order envisaged under S.144C(1) and not be reminded
about doing so - Therefore, even when S.144C applies to a case,
the twelve month period stipulated under S.153(3) has to be
applied - Thus, the procedure under S.144C has to be concluded
within the time frame envisaged under S.153(3) or S.153(1) as
the case may be [Para 15.1]
8. An assessment order or an order of assessment encompasses
the entire process of assessment commencing from the stage of
filing of a return till the making of an assessment of the total income
and also the determination of the taxes which is contemplated
under Section 153 of the Act in so far as the limitation period for
the said procedure is concerned - That is not exactly the exercise
that is carried out under sub-section (1) of Section 144C as the
said assessment order is not a final assessment order but only
a draft assessment order - This is unlike assessment orders
made under sub-section (3) of Section 143 or sub-section (13)
of Section 144C of the Act which are final assessment orders -
Therefore, the expressions "assessment" used in Section 143 of
the Act and "make an assessment of the total income or loss of
the assessee, and determine the sum payable by him or refund
of any amount due to him on the basis of such assessment", and
the expression "the assessment" in sub-section (13) of Section
144C as well as the expression "assessment order" in sub-section
(4) of Section 144C have to be given an identical meaning under
Section 153 of the Act, i.e., final assessment order although, the
assessment orders are made in a distinct manner and under
a different procedure as they apply to different categories of
assesses - The period under Section 144C of the Act is to be
subsumed within the time prescribed under Section 153(1) of the
Act. [Paras 15.3(iv) and (v)]
Interpretation of Statutes - Absurdity - Courts must avoid
absurd interpretation - Discussed:
Held [Per Satish Chandra Sharma, J.]: While interpreting statutes,
the Court must avoid an absurd interpretation and must always
strive to interpret the provisions to ensure that the Legislation is
not reduced to a futility, and the interpretation must ordinarily be
such that it brings about an effective result which was intended
by the Legislature. [Paras 53, 54, 55]
[2025] 8 S.C.R.
1581
Assistant Commissioner of Income Tax (International Taxation)
& Others v. Shelf Drilling Ron Tappmeyer Ltd. Etc.
Interpretation of Statutes - Purposive Interpretation -
Discussed:
Held [Per B.V. Nagarathna, J.]: A statute or any enacting provision
therein must be so construed as to make it effective and operative -
Courts should avoid a construction which would reduce a provision
to a futility and rather accept a construction based on the view that
Parliament or any Legislature would legislate only for the purpose
of bringing about an effective result. [Para 9.1]
Interpretation of Statutes - Literal interpretation - Plain
meaning rule - Discussed:
Held [Per B.V. Nagarathna, J.]: When the words of a statute
are clear, plain or unambiguous, courts are bound to give effect
to that meaning irrespective of consequences - The results of
the construction are then not a matter for the court, even though
they may be strange or surprising, unreasonable or unjust or
oppressive - Hardship cannot be a ground for not giving effective
and grammatical meaning to every word of the provisions of a
statute if the language used therein is unequivocal - Plain meaning
rule applies at the stage when the words have been construed in
their context and the conclusion has been reached that they are
susceptible to only one meaning. [Paras 9.2-9.5]
Interpretation of Statutes - Statute must be read as whole -
Harmonious interpretation - Discussed:
Held [Per B.V. Nagarathna, J.]: While interpreting a statute it
must be read as a whole and one provision of the Act should be
construed with reference to other provisions in the same Act so
as to make out a consistent enactment of the whole statutes -
Such a construction has a merit of avoiding any inconsistency
or repugnancy either within a Section or between a Section and
other parts of the statutes - It is the duty of the courts to avoid
a clash between two Sections of the same Act and "whenever
it is possible to do so, to construe provisions which appear to
conflict so that they harmonise" - The provisions of one Section
of a statute cannot be used to defeat another section of the same
statute - The same rule applies to a sub-section of a Section.
[Para 9.6]
1582
[2025] 8 S.C.R.
Supreme Court Reports
Interpretation of Statues - Non-Obstante Clause - Discussed:
Held [Per B.V. Nagarathna, J.]: A non-obstante clause is
generally incorporated in a statute to give an overriding effect to a
particular section or the statute as a whole - While interpreting a
non-obstante clause, the court is required to find out the extent to
which the legislature intended to do so and the context in which the
non-obstante clause is used - The utility of non-obstante clause
is where there is a conflict between what is stated in a provision
and any other law for the time being in force, or anything else
contained in the said enactment. [Paras 10-10.6]
Case Law Cited
In the judgment of Satish Chandra Sharma, J.
Commissioner of Income Tax v. Hindustan Bulk Carriers [2002]
Supp. 5 SCR 387 : (2003) 3 SCC 57; Franklin Templeton Trustee
Services Private Limited & Anr. v. Amruta Garg & Ors. [2021] 14
SCR 573 : (2021) 6 SCC 736; Vivek Narayan Sharma & Ors.
(Demonetisation Case-5J.) v. Union of India & Ors. [2023] 1
SCR 1 : (2023) 3 SCC 1 - referred to
Commissioner of Income Tax v. Roca Bathroom Products Pvt. Ltd.
2022 SCC Online Madras 8777 - not approved.
In the judgment of B.V. Nagarathna, J.
Central Bank of India v. State of Kerala [2009] 3 SCR 735 :
(2009) 4 SCC 94; In Re: Interplay Between Arbitration Agreements
under Arbitration, 1996 & Stamp Act, 1899 [2023] 15 SCR 1081 :
(2024) 6 SCC 1; Shree Sajjan Mills Ltd. v. CIT [1985] Supp. 3
SCR 593 : (1985) 4 SCC 590; Kanailal Sur v. Paramnidhi Sadhu
Khan [1958] 1 SCR 360 : AIR 1957 SC 907; CIT, Agri v. Keshab
Chandra Mandal [1950] 1 SCR 435 : AIR 1950 SC 265; MV
Joshi v. MU Shimpi [1961] 1 SCR 986 : AIR 1961 SC 1494; VO
Tractoroexport v. Tarapore and Co. [1970] 3 SCR 53 : AIR 1971
SC 1; Venkataramana Devaru v. State of Mysore [1958] 1 SCR
895 : AIR 1958 SC 255; R.S. Raghunath v. State of Karnataka
[1991] Supp. 1 SCR 387 : (1992) 1 SCC 335; A.G. Varadarajulu v.
State of T.N. [1998] 2 SCR 390 : (1998) 4 SCC 231; ICICI Bank
Ltd. v. Sidco Leathers Ltd. [2006] Supp. 1 SCR 528 : (2006) 10
SCC 452 : (2006) 131 Comp Cas 451; Municipal Corpn., Indore v.
Ratnaprabha [1977] 1 SCR 1017 : (1976) 4 SCC 622 : AIR 1977
[2025] 8 S.C.R.
1583
Assistant Commissioner of Income Tax (International Taxation)
& Others v. Shelf Drilling Ron Tappmeyer Ltd. Etc.
SC 308; Muhammad Abdul Samad v. State of Telangana [2024]
7 SCR 1236 : (2025) 2 SCC 49; Chief Commissioner of Central
Goods and Service Tax v. Safari Retreats Private Limited [2024] 10
SCR 793 : (2025) 2 SCC 523; RBI v. Peerless General Finance and
Investment Co. Ltd. [1987] 2 SCR 1 : (1987) 1 SCC 424; Central
India Spg., Wvg. & Mfg. Co. Ltd. v. Municipal Committee [1958]
1 SCR 1102 : 1957 SCC OnLine SC 18; CIT v. JK Commercial
Corpn. Ltd. [1977] 1 SCR 512 : (1976) 4 SCC 517; Auto & Metal
Engineers v. Union of India (1997) 7 SCC 734 - referred to.
Kalyankumar Ray v. Commissioner of Income Tax, West Bengal
(1991) 191 ITR 634 (SC); Commissioner of Income Tax v. Roca
Bathroom Products Pvt. Ltd., 2022 SCC Online Madras 8777;
CIT v. Shahzada Nand & Sons (1966) 60 ITR 392; CIT v. Jargaon
Electric Supply Co. Ltd. (1960) 40 ITR 184; Pr. CIT v. Lionbridge
Technologies Pvt. Ltd. (2019) 260 Taxman 273 (Bom.); Nokia
India P. Ltd. v. DCIT (2018) 407 ITR 20 (Delhi) (HC); CIT v.
Purshottamdas T. Patel (1994) 209 ITR 52 (Guj) - referred to.
Whitney v. Inland Revenue Commissioner (1926) A.C. 37; Cape
Brandy Syndicate v. Inland Revenue Commissioner [(1921) 1 KB
64] - referred to.
Books and Periodicals Cited
In the judgment of B.V. Nagarathna, J.
GP Singh - Principles of Statutory Interpretation, 15th Ed.
LexisNexis - referred to.
List of Acts
Income Tax Act, 1961; Taxation and other laws (Relaxation and
Amendment of Certain Provisions) Act, 2020; Finance Act, 2016;
Finance Act 2017; Tamil Nadu Land Reforms (Fixation of Ceiling)
Act, 1961; Stamp Act, 1899; Arbitration and Conciliation Act, 1996;
Central Goods and Services Tax Act, 2017; Benami Property
Transaction Act, 1988.
List of Keywords
Income Tax; Interpretation of Statute; Purposive interpretation;
Literal interpretation; Plain interpretation; Non-obstante clause;
Section 144C; Section 153; Assessment; Re-assessment; Draft
Assessment Order; Assessing Officer; Final assessment order;
Dispute resolution panel; Timelines; Limitation period.
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Supreme Court Reports
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No(s).
10586-10589 of 2025
From the Judgment and Order dated 04.08.2023 of the High Court
of Judicature at Bombay in WP Nos. 2340, 2661, 3059, and 3060
of 2021
With
Special Leave Petition (Civil) No. 25798 of 2024
Appearances for Parties
Advs. for the Petitioners:
N Venkatraman, A.S.G., Ms. Swarupama Chaturvedi, Sr. Adv.,
Raj Bahadur Yadav, H R Rao, Udai Khanna, V Chandrashekhara
Bharathi, Ashok Panigrahi, Sachin Sharma, Mrs. A Deepa.
Advs. for the Respondents:
Jehangir D. Mistry, Sr. Adv., Ms. Rubal Bansal Maini, Prakhar
Pandey, Satvik Sareen, Faisal Sherwani, Kunal Cheema.
Judgment / Order of the Supreme Court
Judgment
Satish Chandra Sharma, J.
1.
Leave granted.
2.
The present appeals challenge the judgment and order dated
04.08.2023 passed by the High Court of Bombay in Writ Petition
2340 of 2021 and other connected matters.
3.
The present dispute raises important questions of law relating to the
interpretation and interplay between Section 144C and Section 153(3)
of the Income Tax Act, 1961. More specifically, what are the periods
of limitations prescribed for the revenue authorities to take action
against an Assessee and how the limitation periods and procedures
prescribed in these two sections coexist.
4.
The facts necessary for the adjudication of the present appeals are
as follows:
[2025] 8 S.C.R.
1585
Assistant Commissioner of Income Tax (International Taxation)
& Others v. Shelf Drilling Ron Tappmeyer Ltd. Etc.
5.
The Respondent/Shelf Drilling Ron Tappmeyer Ltd. exercised its
option under Section 44BB of the Income Tax Act and declared a
total loss of Rs. 120,18,44,672/- for the assessment year 2014-2015.
On 28th August 2015, the Appellant issued a notice under Section
143(2) of the Income Tax Act. Pursuant to this, a Draft Assessment
Order in terms of Section 144C of the Income Tax Act was passed
on 26.12.2016, and rejected the books of Account furnished by the
Respondent, and assessed its income at Rs. 4,34,79,980/-. The
Dispute Resolution Panel, in terms of Section 144C of the Income
Tax Act, gave its recommendations on 28th September 2017, and
the final assessment order was passed on 30.10.2017.
6.
Aggrieved by this order, the Respondent approached the Income Tax
Appellate Tribunal, which remanded the matter back to the Assessing
Officer on the ground that the revenue authorities were not justified
in rejecting the books of account furnished by the Respondent and
therefore directed them to carry out the assessment afresh. This
order came to be passed on 04.10.2019.
7.
It is a matter of record that after the remand order passed by the
Appellate Tribunal, a notice was issued on 23.09.2021, and a
Draft Assessment Order was passed on 28.09.2021. This Draft
Assessment Order was challenged before the High Court of
Bombay on the ground that the maximum permissible time period
as prescribed under Section 153(3) of the Income Tax Act had
already expired and that, therefore, subsequent proceedings were
vitiated and could not continue, and no final assessment order
could be passed.
8.
The writ petition filed by the Respondent was allowed by way of
judgment and order dated 04.08.2023. The High Court took the view
that the time period provided by Section 153(3) of the Income Tax Act
is subsumed within the time contemplated in terms of Section 144C
of the Income Tax Act. This Court is therefore required to analyze
and interpret the maximum permissible time periods prescribed as
per the Income Tax Act in terms of proceedings under Section 144C
read with Section 153(3) of the Income Tax Act.
9.
It is therefore appropriate to refer to Section 153 of the Income Tax Act.
"153. Time limit for completion of assessment, reassessment
and recomputation.-
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[2025] 8 S.C.R.
Supreme Court Reports
(1) No order of assessment shall be made under Section
143 or Section 144 at any time after the expiry of twentyone months from the end of the assessment year in which
the income was first assessable:
[Provided that in respect of an order of assessment relating
to the assessment year commencing on the 1st day of
April, 2018, the provisions of this sub-section shall have
effect, as if for the words "twenty-one months", the words
"eighteen months" had been substituted:
[Provided further that in respect of an order of assessment
relating to the assessment year commencing on-
(i) the 1st day of April, 2019, the provisions of this subsection shall have effect, as if for the words "twenty-one
months", the words "twelve months" had been substituted;
(ii) the 1st day of April, 2020, the provisions of this subsection shall have effect, as if for the words "twentyone months", the words "eighteen months" had been
substituted : ]]
[Provided also that in respect of an order of assessment
relating to the assessment year commencing on [* * *] the
1st day of April, 2021, the provisions of this sub-section
shall have effect, as if for the words "twenty-one months",
the words "nine months" had been substituted : ]
 [Provided also that in respect of an order of assessment
relating to the assessment year commencing on or after
the 1st day of April, 2022, the provisions of this sub-section
shall have effect, as if for the words "twenty-one months",
the words "twelve months" had been substituted.]
[(1-A) Notwithstanding anything contained in sub-section
(1), where a return under sub-section (8-A) of Section 139
is furnished, an order of assessment under Section 143 or
Section 144 may be made at any time before the expiry
of [twelve months] from the end of the financial year in
which such return was furnished.]
[(1-B) Notwithstanding anything in sub-section (1), where
a return is furnished in consequence of an order under
[2025] 8 S.C.R.
1587
Assistant Commissioner of Income Tax (International Taxation)
& Others v. Shelf Drilling Ron Tappmeyer Ltd. Etc.
clause (b) of sub-section (2) of Section 119, an order of
assessment under Section 143 or Section 144 may be
made at any time before the expiry of twelve months
from the end of the financial year in which such return
was furnished.]
(2) No order of assessment, reassessment or recomputation
shall be made under Section 147 after the expiry of nine
months from the end of the financial year in which the
notice under Section 148 was served:
 [Provided that where the notice under Section 148 is served
on or after the 1st day of April, 2019, the provisions of
this sub-section shall have effect, as if for the words "nine
months", the words "twelve months" had been substituted.]
(3) Notwithstanding anything contained in [sub-sections
(1), (1-A) and (2)], an order of fresh assessment [or
fresh order under Section 92-CA, as the case may be,] in
pursuance of an [order under Section 250 or Section 254]
or Section 263 or Section 264, setting aside or cancelling
an assessment, [or an order under Section 92-CA, as the
case may be] may be made at any time before the expiry
of nine months from the end of the financial year in which
the [order under Section 250 or Section 254] is received by
the Principal Chief Commissioner or Chief Commissioner
or [Principal Chief Commissioner or Chief Commissioner
or Principal Commissioner or Commissioner, as the
case may be,] or, as the case may be, the order under
Section 263 or Section 264 is passed by the [Principal
Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner, as the case may be,]:
[Provided that where the order under Section 254 is
received by the Principal Chief Commissioner or Chief
Commissioner or Principal Commissioner or Commissioner
or, as the case may be, the order under Section 263 or
Section 264 is passed by the Principal Commissioner or
Commissioner on or after the 1st day of April, 2019, the
provisions of this sub-section shall have effect, as if for
the words "nine months", the words "twelve months" had
been substituted.]
1588
[2025] 8 S.C.R.
Supreme Court Reports
[(3-A) Notwithstanding anything contained in subsections (1), (1-A), (2) and (3), where an assessment or
reassessment is pending on the date of initiation of search
under Section 132 or making of requisition under Section
132-A, the period available for completion of assessment
or reassessment, as the case may be, under the said
sub-sections shall,-
(a) in a case where such search is initiated under Section
132 or such requisition is made under Section 132-A;
(b) in the case of an assessee, to whom any money,
bullion, jewellery or other valuable article or thing seized
or requisitioned belongs to;
(c) in the case of an assessee, to whom any books of
account or documents seized or requisitioned pertains or
pertain to, or any information contained therein, relates
to, be extended by twelve months.]
(4) Notwithstanding anything contained in [sub-sections
(1), (1-A), (2), (3) and (3-A)], where a reference under
sub-section (1) of Section 92-CA is made during the course
of the proceeding for the assessment or reassessment,
the period available for completion of assessment or
reassessment, as the case may be, under the said [subsections (1), (1-A), (2), (3) and (3-A)] shall be extended
by twelve months.
(5) Where effect to an order under Section 250 or
Section 254 or Section 260 or Section 262 or Section
263 or Section 264 is to be given by the Assessing
Officer [or the Transfer Pricing Officer, as the case may
be,] wholly or partly, otherwise than by making a fresh
assessment or reassessment [or fresh order under
Section 92-CA, as the case may be,] such effect shall
be given within a period of three months from the end of
the month in which order under Section 250 or Section
254 or Section 260 or Section 262 is received by the
Principal Chief Commissioner or Chief Commissioner or
Principal Commissioner or Commissioner, as the case
may be, the order under Section 263 or Section 264
is passed by 3407[the Principal Chief Commissioner
[2025] 8 S.C.R.
1589
Assistant Commissioner of Income Tax (International Taxation)
& Others v. Shelf Drilling Ron Tappmeyer Ltd. Etc.
or Chief Commissioner or Principal Commissioner or
Commissioner, as the case may be,]:
Provided that where it is not possible for the Assessing
Officer [or the Transfer Pricing Officer, as the case may be,]
to give effect to such order within the aforesaid period, for
reasons beyond his control, the Principal Commissioner or
Commissioner on receipt of such request in writing from
the Assessing Officer, 3409[or the Transfer Pricing Officer,
as the case may be,] if satisfied, may allow an additional
period of six months to give effect to the order:
[Provided further that where an order under Section 250
or Section 254 or Section 260 or Section 262 or Section
263 or Section 264 requires verification of any issue by
way of submission of any document by the assessee or
any other person or where an opportunity of being heard
is to be provided to the assessee, the order giving effect
to the said order under Section 250 or Section 254 or
Section 260 or Section 262 or Section 263 or Section 264
shall be made within the time specified in sub-section (3).]
[(5-A) Where the Transfer Pricing Officer gives effect to
an order or direction under Section 263 by an order under
Section 92-CA and forwards such order to the Assessing
Officer, the Assessing Officer shall proceed to modify the
order of assessment or reassessment or recomputation, in
conformity with such order of the Transfer Pricing Officer,
within two months from the end of the month in which such
order of the Transfer Pricing Officer is received by him.]
(6) Nothing contained in [sub-sections (1), (1-A) and
(2)] shall apply to the following classes of assessments,
reassessments and recomputation which may, subject
to the provisions of [sub-sections (3), (5) and (5-A)], be
completed-
(i) where the assessment, reassessment or recomputation
is made on the assessee or any person in consequence of
or to give effect to any finding or direction contained in an
order under Section 250, Section 254, Section 260, Section
262, Section 263, or Section 264 or in an order of any
court in a proceeding otherwise than by way of appeal or
1590
[2025] 8 S.C.R.
Supreme Court Reports
reference under this Act, on or before the expiry of twelve
months from the end of the month in which such order is
received or passed by the [Principal Chief Commissioner
or Chief Commissioner or] Principal Commissioner or
Commissioner, as the case may be; or
(ii) where, in the case of a firm, an assessment is made
on a partner of the firm in consequence of an assessment
made on the firm under Section 147, on or before the expiry
of twelve months from the end of the month in which the
assessment order in the case of the firm is passed.
(7) Where effect to any order, finding or direction referred
to in sub-section (5) or sub-section (6) is to be given by
the Assessing Officer, within the time specified in the
said sub-sections, and such order has been received or
passed, as the case may be, by the income-tax authority
specified therein before the 1st day of June, 2016, the
Assessing Officer shall give effect to such order, finding or
direction, or assess, reassess or recompute the income of
the assessee, on or before the 31st day of March, 2017.
(8) Notwithstanding anything contained in the foregoing
provisions of this section, sub-section (2) of Section 153-A
or sub-section (1) of [Section 153-B or Section 158-BE],
the order of assessment or reassessment, relating to any
assessment year, which stands [revived under sub-section
(2) of Section 153-A or sub-section (5) of Section 158-BA],
shall be made within a period of one year from the end of
the month of such revival or within the period specified in
this section or sub-section (1) of [Section 153-B or Section
158-BE], whichever is later.
(9) The provisions of this section as they stood immediately
before the commencement of the Finance Act, 2016,
shall apply to and in relation to any order of assessment,
reassessment or recomputation made before the 1st day
of June, 2016:
[Provided that where a notice under sub-section (1) of
Section 142 or sub-section (2) of Section 143 or Section
148 has been issued prior to the 1st day of June, 2016
[2025] 8 S.C.R.
1591
Assistant Commissioner of Income Tax (International Taxation)
& Others v. Shelf Drilling Ron Tappmeyer Ltd.