Income-tax Act,1961
Act No : 43
Section :
Time limit for completion of assessments and reassessments
153. Time limit for completion of assessments and reassessments 1[(1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of- (a) two years from the end of the assessment year in which the income was first assessable; or (b) one year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, is filed under sub-section (4) or sub- section (5) of section 139, whichever is later.] 2[(2) No order of assessment, reassessment or recomputation shall be ----------------------------------------------------------------------- 1 Substituted by the Finance Act, 1989, w.e.f. 1-4-1989. Prior to the substitution, subsection (1), as amended by the Finance Act, 1968, w.e.f. 1-4-1968 and amended by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984, read as under: "(1) No order of assessment shall be made under section 143 or section 144 at any time after- (a) the expiry of- (i) four years from the end of the assessment year in which the income was first assessable, where such assessment year is an assessment year commencing on or before the 1st day of April, 1967; (ii) three years from the end of the assessment year in which the income was first assessable, where such assessment year is the assessment year commencing on the 1st day of April, 1968; (iii) two years from the end of the assessment year in which the income was first assessable, where such assessment year is an assessment year commencing on or after the 1st day of April, 1969; or (b) the expiry of eight years from the end of the assessment year in which the income was first assessable, in a case falling within clause (c) of sub-section (1) of section 271; or (c) the expiry of one year from the date of the filing of a return or a revised return under sub-section (4) or sub- section (5) of section 139; or (d) the expiry of six months from the end of the month in which an application under clause (a) of sub-section (2) of section 143 is made by the assessee, whichever is latest." It was also substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989 but the substituted provision never came into effect. See also Instruction No. 888, dated 1-10-1975, reproduced in Bharat's Direct Taxes Circulars, 1991 edn., p. 1477. 2 Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Prior to the substitution, sub-section (2) read as under: "(2) No order of assessment, reassessment or recomputation shall be made under section 147- (a) where the assessment, reassessment or recomputation is to be made under clause (a) of that section, after the expiry of four years from the end of the assessment year in which the notice under section 148 was served; -> -> ------------------------------------------------------------------------ 1.553 made under section 147 after the expiry of two years from the end of the financial year in which the notice under section 148 was served: Provided that where the notice under section 148 was served on or before the 31st day of March, 1987, such assessment, reassessment or recomputation may be made at any time up to the 31st day of March, 1990.] 1[(2A) Notwithstanding anything contained in sub-sections (1) and (2), in relation to the assessment year commencing on the 1st day of April, 1971, and any subsequent assessment year, an order of fresh assessment under section, 146 or in pursuance of an order, under section 250, section 254, section 263 or section 264, setting aside or cancelling an assessment, may be made at any time before the expiry of two years from the end of the financial year in which the order under section 146 cancelling the assessment is passed by the 2[Assessing] Officer or the order under section 250 or section 254 is received by the 4[Chief Commissioner or Commissioner] or, as the case may be, the order under section 263 or section 264 is passed by the 4 [Chief Commissioner or Commissioner].] (3) The provisions of sub-sections (1) and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may, 5[subject to the provisions of sub-section (2A),] be completed at any time- (i) where a fresh assessment is made under section 146; (ii) 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, 254, 260, 262, 263 or 264 6[or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act]; (iii) 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. 7 [Explanation 1.-In computing the period of limitation for the purposes of this section- ----------------------------------------------------------------------- -> -> (b) where the assessment, reassessment or recomputation is to be made under clause (b) of that section, after- (i) the expiry of four years from the end of the assessment year in which the income was first assessable, or (ii) the expiry of one year from the date of service of the notice under section 148, whichever is later." 1 Inserted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4- 1971. 2 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 3 Substituted for "Commissioner", ibid. 4 Ibid. 5 Inserted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4- 1971. 6 Inserted by the Direct Taxes (Amendment) Act, 1964, w.e.f. 6-10- 1964. 7 Substituted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1- 1-1976 as regards clauses (i), (ii) and (iv) and w.e.f. 1-4-1976 as regards clauses (iii) and (v). ------------------------------------------------------------------------ 1.554 (i) the time taken in reopening the whole or any part of the proceeding or in giving an opportunity to the assessee to be reheard 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 1[Assessing] Officer directs the assessee to get his accounts audited under subsection (2A) of section 142 and ending with the date on which the assessee furnishes a report of such audit under that sub-section, or 2[(iv) Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.] 3[(iva)the period (not exceeding sixty days) commencing from the date on which the 4 [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] (v) in a case where an application made before the Income- tax Settlement Commission under section 245C is rejected by it or is not allowed to be proceeded with by it, the period commencing from the date on which such application is made and ending with the date on which the order under sub-section (1) of section 245D is received by the Commissioner under sub-section (2) of that section, shall be excluded:] 5 [Provided that where immediately after the exclusion of the aforesaid time or period, the period of limitation referred to in sub- sections (1), (2) and (2A) 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,] Explanation 2.-Where, by an order 6[referred to in clause (ii) of subsection (3)], any income is excluded, from the total income of the assessee for an assessment year, then, an assessment of such income for another ---------------------------------------------------------------------- 1 Substituted for me-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 2 Prior to the omission, clause (iv), as amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988, read as under: "(iv) the period (not exceeding one hundred and eighty days) commencing from the date on which the Assessing Officer forwards the draft order under subsection (1) of section 144B to the assessee and ending with the date on which the Assessing Officer receives the directions from the Deputy Commissioner under sub-section (4) of that section, or, in a case where no objections to the draft order are received from the, assessee, a period of thirty days, or" 3 Inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10- 1984. 4 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 5 Inserted by the Finance (No. 2) Act, 1991, w.e.f. 27-9-1991. 6 Substituted for "under section 250, 254 260, 262, 263 or 264" by the Direct Taxes (Amendment) Act, 1964, w.e.f. 6-10-1964. ------------------------------------------------------------------------- 1.555 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. Explanation 3.-Where, by an order 1[referred to in clause (ii) of subsection (3)], ;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, provided such other person was given an opportunity of being heard before the said order was passed.
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