Section 153 of Income Tax Act "Time limit for completion of assessments and reassessments"
153. (1) No order of assessment shall be made under
section 143 or section 144 at any time after the expiry of
twenty-one 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 or after the
1st day of April, 2019, the provisions of this sub-section
shall have effect, as if for the words "twenty-one months",
the words "twelve months" had been substituted.
(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)
and (2), an order of fresh assessment in pursuance of an
order under section 254 or section 263 or section 264,
setting aside or cancelling an assessment, 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 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:
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.
(4) Notwithstanding anything contained in sub-sections (1),
(2) and (3), where a reference under sub-section (1) of
section 92CA 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 sub-sections (1), (2) and (3) 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, wholly or
partly, otherwise than by making a fresh assessment or
reassessment, 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 the Principal Commissioner or Commissioner:
Provided that where it is not possible for the Assessing
Officer 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, 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).
(6) Nothing contained in sub-sections (1) and (2) shall
apply to the following classes of assessments, reassessments
and recomputation which may, subject to the provisions of
sub-sections (3) and (5), 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 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 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 153A
or sub-section (1) of section 153B, the order of assessment
or reassessment, relating to any assessment year, which
stands revived under sub-section (2) of section 153A, 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 153B, 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 and the
assessment or reassessment has not been completed by such
date due to exclusion of time referred to in Explanation 1,
such assessment or reassessment shall be completed in
accordance with the provisions of this section as it stood
immediately before its substitution by the Finance Act, 2016
(28 of 2016).
Explanation 1.-For the purposes of this section, in
computing the period of limitation-
(i) the time taken in reopening the whole or any part of the
proceeding or in giving an opportunity to the assessee to be
re-heard under the proviso to section 129; or
(ii) the period during which the assessment proceeding is
stayed by an order or injunction of any court; or
(iii) the period commencing from the date on which the
Assessing Officer intimates the Central Government or the
prescribed authority, the contravention of the provisions of
clause (21) or clause (22B) or clause (23A) or clause (23B)
or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or
sub-clause (via) of clause (23C) of section 10, under clause
(i) of the proviso to sub-section (3) of section 143 and
ending with the date on which the copy of the order
withdrawing the approval or rescinding the notification, as
the case may be, under those clauses is received by the
Assessing Officer; or
(iv) the period commencing from the date on which the
Assessing Officer directs the assessee to get his accounts
audited under sub-section (2A) of section 142 and-
(a) ending with the last date on which the assessee is
required to furnish a report of such audit under that
sub-section; or
(b) where such direction is challenged before a court,
ending with the date on which the order setting aside such
direction is received by the Principal Commissioner or
Commissioner; or
(v) the period commencing from the date on which the
Assessing Officer makes a reference to the Valuation Officer
under sub-section (1) of section 142A and ending with the
date on which the report of the Valuation Officer is
received by the Assessing Officer; or
(vi) the period (not exceeding sixty days) commencing from
the date on which the Assessing Officer received the
declaration under sub-section (1) of section 158A and ending
with the date on which the order under sub-section (3) of
that section is made by him; or
(vii) in a case where an application made before the
Income-tax Settlement Commission is rejected by it or is not
allowed to be proceeded with by it, the period commencing
from the date on which an application is made before the
Settlement Commission under section 245C and ending with the
date on which the order under sub-section (1) of section
245D is received by the Principal Commissioner or
Commissioner under sub-section (2) of that section; or
(viii) the period commencing from the date on which an
application is made before the Authority for Advance Rulings
under sub-section (1) of section 245Q and ending with the
date on which the order rejecting the application is
received by the Principal Commissioner or Commissioner under
sub-section (3) of section 245R; or
(ix) the period commencing from the date on which an
application is made before the Authority for Advance Rulings
under sub-section (1) of section 245Q and ending with the
date on which the advance ruling pronounced by it is
received by the Principal Commissioner or Commissioner under
sub-section (7) of section 245R; or
(x) the period commencing from the date on which a reference
or first of the references for exchange of information is
made by an authority competent under an agreement referred
to in section 90 or section 90A and ending with the date on
which the information requested is last received by the
Principal Commissioner or Commissioner or a period of one
year, whichever is less; or
(xi) the period commencing from the date on which a
reference for declaration of an arrangement to be an
impermissible avoidance arrangement is received by the
Principal Commissioner or Commissioner under sub-section (1)
of section 144BA and ending on the date on which a direction
under sub-section (3) or sub-section (6) or an order under
sub-section (5) of the said section is received by the
Assessing Officer,
shall be excluded:
Provided that where immediately after the exclusion of the
aforesaid period, the period of limitation referred to in
sub-sections (1), (2), (3) and sub-section (8) available to
the Assessing Officer for making an order of assessment,
reassessment or recomputation, as the case may be, is less
than sixty days, such remaining period shall be extended to
sixty days and the aforesaid period of limitation shall be
deemed to be extended accordingly:
Provided further that where the period available to the
Transfer Pricing Officer is extended to sixty days in
accordance with the proviso to sub-section (3A) of section
92CA and the period of limitation available to the Assessing
Officer for making an order of assessment, reassessment or
recomputation, as the case may be, is less than sixty days,
such remaining period shall be extended to sixty days and
the aforesaid period of limitation shall be deemed to be
extended accordingly:
Provided also that where a proceeding before the Settlement
Commission abates under section 245HA, the period of
limitation available under this section to the Assessing
Officer for making an order of assessment, reassessment or
recomputation, as the case may be, shall, after the
exclusion of the period under sub-section (4) of section
245HA, be not less than one year; and where such period of
limitation is less than one year, it shall be deemed to have
been extended to one year; and for the purposes of
determining the period of limitation under sections 149,
154, 155 and 158BE and for the purposes of payment of
interest under section 244A, this proviso shall also apply
accordingly.
Explanation 2.-For the purposes of this section, where, by
an order referred to in clause (i) of sub-section (6),-
(a) any income is excluded from the total income of the
assessee for an assessment year, then, an assessment of such
income for another assessment year shall, for the purposes
of section 150 and this section, be deemed to be one made in
consequence of or to give effect to any finding or direction
contained in the said order; or
(b) any income is excluded from the total income of one
person and held to be the income of another person, then, an
assessment of such income on such other person shall, for
the purposes of section 150 and this section, be deemed to
be one made in consequence of or to give effect to any
finding or direction contained in the said order, if such
other person was given an opportunity of being heard before
the said order was passed.
153A. (1) Notwithstanding anything contained in section
139, section 147, section 148, section 149, section 151 and
section 153, in the case of a person where a search is
initiated under section 132 or books of account, other
documents or any assets are requisitioned under section 132A
after the 31st day of May, 2003, the Assessing Officer
shall-
(a) issue notice to such person requiring him to furnish
within such period, as may be specified in the notice, the
return of income in respect of each assessment year falling
within six assessment years and for the relevant assessment
year or years referred to in clause (b), in the prescribed
form and verified in the prescribed manner and setting forth
such other particulars as may be prescribed and the
provisions of this Act shall, so far as may be, apply
accordingly as if such return were a return required to be
furnished under section 139;
(b) assess or reassess the total income of six assessment
years immediately preceding the assessment year relevant to
the previous year in which such search is conducted or
requisition is made and for the relevant assessment year or
years :
Provided that the Assessing Officer shall assess or reassess
the total income in respect of each assessment year falling
within such six assessment years and for the relevant
assessment year or years :
Provided further that assessment or reassessment, if any,
relating to any assessment year falling within the period of
six assessment years and for the relevant assessment year or
years referred to in this sub-section pending on the date of
initiation of the search under section 132 or making of
requisition under section 132A, as the case may be, shall
abate :
Provided also that the Central Government may by rules made
by it and published in the Official Gazette (except in cases
where any assessment or reassessment has abated under the
second proviso), specify the class or classes of cases in
which the Assessing Officer shall not be required to issue
notice for assessing or reassessing the total income for six
assessment years immediately preceding the assessment year
relevant to the previous year in which search is conducted
or requisition is made and for the relevant assessment year
or years:
Provided also that no notice for assessment or reassessment
shall be issued by the Assessing Officer for the relevant
assessment year or years unless-
(a) the Assessing Officer has in his possession books of
account or other documents or evidence which reveal that the
income, represented in the form of asset, which has escaped
assessment amounts to or is likely to amount to fifty lakh
rupees or more in the relevant assessment year or in
aggregate in the relevant assessment years;
(b) the income referred to in clause (a) or part thereof has
escaped assessment for such year or years; and
(c) the search under section 132 is initiated or requisition
under section 132A is made on or after the 1st day of April,
2017.
Explanation 1.-For the purposes of this sub-section, the
expression "relevant assessment year" shall mean an
assessment year preceding the assessment year relevant to
the previous year in which search is conducted or
requisition is made which falls beyond six assessment years
but not later than ten assessment years from the end of the
assessment year relevant to the previous year in which
search is conducted or requisition is made.
Explanation 2.-For the purposes of the fourth proviso,
"asset" shall include immovable property being land or
building or both, shares and securities, loans and advances,
deposits in bank account.
(2) If any proceeding initiated or any order of assessment
or reassessment made under sub-section (1) has been annulled
in appeal or any other legal proceeding, then,
notwithstanding anything contained in sub-section (1) or
section 153, the assessment or reassessment relating to any
assessment year which has abated under the second proviso to
sub-section (1), shall stand revived with effect from the
date of receipt of the order of such annulment by the
Principal Commissioner or Commissioner:
Provided that such revival shall cease to have effect, if
such order of annulment is set aside.
Explanation.-For the removal of doubts, it is hereby
declared that,-
(i) save as otherwise provided in this section, section 153B
and section 153C, all other provisions of this Act shall
apply to the assessment made under this section;
(ii) in an assessment or reassessment made in respect of an
assessment year under this section, the tax shall be
chargeable at the rate or rates as applicable to such
assessment year.