Time limit for completion of assessment and reassessments

153. (1) No order of assessment shall be made under section 143 or section 144 at any time after—

(a) the expiry of four years from the end of the assessment year in which the income was first assessable; 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,

whichever is latest.

(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 ;

(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.

(3) The provisions of sub-sections (1) and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may 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 ¹[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.

Explanation 1.—In computing the period of limitation for the purposes of this section, 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 any period during which the assessment proceeding is stayed by an order or injunction of any court, shall be excluded.

Explanation 2-—Where, by an order ²[referred to in clause (ii) of sub-section (3)] any income is excluded from the total income of the assessee for an assessment year, than, 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.

Explanation 3.—Where, by an order ²[referred to in clause (ii) of sub-section (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.

 

 

[As amended by the Finance Act, 1966]