India: Split verdict on issue relating to time limit for completion of assessment proceedings (Supreme Court decision)

Issue of whether time limit for completion of assessment proceedings is extended by timeline for completion of Dispute Resolution Panel (DRP) proceedings

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August 18, 2025

The Supreme Court delivered a split verdict on the issue of whether the time limit prescribed for the completion of assessment proceedings under the Income Tax Act, 1961 is extended by the time prescribed for the completion of the Dispute Resolution Panel (DRP) proceedings.

Upholding the Bombay High Court decision, Justice B.V. Nagarathna held that the timeline prescribed for DRP proceedings is subsumed within the limitation period prescribed for the completion of assessment proceedings. On the contrary, Justice S.C. Sharma held that the DRP timeline is in addition to the overall limitation period.

In light of the divergent views, the matter has been placed before the Chief Justice of India for the constitution of an appropriate bench to reconsider the issue.

The case is: ACIT (International Taxation) & Others v. Shelf Drilling Ron Tappmeyer Ltd. Etc.

Read an August 2025 report prepared by the KPMG member firm in India 

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