Section 153-Time Limit for Completion of Assessment

Section 153 of the Income Tax Act covers provision related to the time limit for completion of the assessment, reassessment, and recomputation.

Section 153(1) of the Income Tax Act

As per section 153(1); the assessing officer or income tax authorities shall not pass an order of assessment u/s 143 or 144; after the expiry of 21 months from the end of the AY in which the income was first assessable.

For an order of assessment for the AY, beginning on 1st April 2018; no order for an assessment shall be made after the expiry of 18 months from the end of the AY.

For an order of assessment for the AY, beginning on 1st April 2019, the time limit shall be 12 months.

Section 153(2) of the Income Tax Act

Section 153(2) provides that, the AO shall not make an order of assessment, reassessment or recomputation u/s 147; after the expiry of 9 months from the end of the FY in which the notice u/s 148 was issued.

However, in case; where the notice u/s 148 is issued on or after 1st April 2019, the time limit shall be 12 months.

Section 153(3) of the Income Tax Act

This section provides that, in spite of the provisions of above subsections; an order of fresh assessment in pursuance of an order u/s 254 or 263 or 264 may be made; at any time before the expiry of 9 months from the end of the FY in which the order u/s 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be; the order u/s 263 or 264 is passed by the Principal Commissioner or Commissioner.

However, in case, where the order u/s 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be; the order u/s 263 or 264 is passed by the Principal Commissioner or Commissioner on or after 1st April 2019, the time limit shall be 12 months.

Section 153(4) of the Income Tax Act

As per the section 153(4), where a reference u/s 92CA(1) is made during the proceeding for the assessment or reassessment, the period available for completion of assessment or reassessment u/s 153(1), 153(2) or 153(3) shall be extended by 12 months.

Section 153(5) of the Income Tax Act

Where the AO give an effect to an order u/s 250, 254, 260, 262, 263 or 264, either wholly or partly, by making a fresh assessment or reassessment, such effect shall be given within 3 months from the end of the month in which the order u/s 250, 254, 260, 262, 263 or 264 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order u/s 263 or 264 is passed by the Principal Commissioner or Commissioner.

In case, it is not possible for the AO to give effect to such order within the period as mentioned above, for reason beyond his control, the Principal Commissioner or Commissioner may allow an additional period of 6 months, on receipt of such request in writing from the AO, to give the effect to the order.

Note: Where an order u/s 250, 254, 260, 262, 263 or 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 is to be provided to the assessee, the order giving effect to the said order u/s 250, 254, 260, 262, 263 or 264 shall be made within the time specified in section 153(3).

Section 153(6) of the Income Tax Act

The provisions of section 153(1) and 153(2) shall not apply to the following classes of assessments, reassessments, and recomputation which may, subject to the provisions of section 153(3) & 153(5), be completed;

  1. where an assessment, reassessment or recomputation is made on the assessee in consequence of or; to give effect to any finding or direction contained in an order u/s 250, 254, 260, 262, 263 or 264; or in order of any court in a proceeding otherwise than by way of appeal or reference under this Act; on or before the expiry of 12 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
  2. where, in a case of a firm; an assessment is made on a partner of the firm in consequence of assessment made on the firm u/s 147; on or before the expiry of 12 months, from the end of the month in which; the assessment order in the case of the firm is passed.

Section 153(7) of the Income Tax Act

Under this section, where effect to any order; finding or direction referred to in section 153(5) or 153(6) is to be given by the AO; within the time specified in the said subsections, and such order has been received or passed, as the case maybe; by the income-tax authority specified therein before the 1st June 2016, the AO shall give effect to such order; finding or direction, or assess, reassess or recompute the income of the assessee; on or before the 31st March 2017.

Section 153(8) of the Income Tax Act

Section 153(8) provides that, notwithstanding anything contained in the foregoing provisions of this section, section 153A(2) or 153B(1); the order of assessment or reassessment, relating to any AY, which stands revived u/s 153A(2); shall be made within a period of 1 year from the end of the month of such revival or; within the period specified in this section or section 153B(1), whichever is later.

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