The issue concerned interpretation of s.144(C)(13) of the Income Tax Act, 1961.

The Bombay High Court held:

“23. The requirements of Section 144 C (13) are:

(a) There ought to be directions passed by the DRP as per sub-section (5) of Section 144(C);

(b) The directions passed by the DRP under Section 144 C (5) ought to be received by the Assessing Officer;

(c) It casts a burden on the Assessing officer by the mandatory language of the Section to complete the assessment; and

(d) That the Assessing Officer ought to complete the assessment within one month from the end of the month in which such direction of the DRP is received.

24. The language of Section 144 C (13) is clear, unambiguous and mandatory. It provides a mechanism for the steps that must be taken after proceedings under subsection (5) of Section 144(C) are completed. The mechanism envisaged under the section has a strict timeline, which cannot be deviated from by the Assessing Officer.

…

30. The scheme of the Section clearly provides that the Assessing Officer is bound by the directions and he has to complete the assessment within the timelines provided by the Section. The reason for imposing a strict timeline in the Section is that the Assessing Officer must follow the directions issued by the DRP, which are provided for his guidance in completing the assessment. It is a settled principle of law that, where a statute requires something to be done in a particular manner, it has to be done in that manner. The statutory provisions cannot be waived or deviated from.”

The Division Bench of the Bombay High Court rejected the submission of the Revenue that in case of remand proceedings, the timelines provided by s.144(C)(13) are not applicable and the assessment can be completed beyond the time limits provided by the section.