Section 153 of the Income-tax Act provides for the time limits for completion of assessments and reassessments. In Explanation ‘I to section 153 of the Income-tax Act, certain periods specified therein are to be excluded while computing the period of limitation for completion of assessments and reassessments.
It is proposed to exclude the time taken in obtaining information from the tax authorities in jurisdictions situated outside India, under an agreement referred to in section 90 or section 90A, from the statutory time limit prescribed for completion of assessment or reassessment.
Accordingly, it is proposed to insert a new clause (viii) in Explanation ‘I to section 153. It provides that the period commencing from the date on which a reference 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 so requested is received by the Commissioner, or a period of six months, whichever is less, shall be excluded.
Similar amendments are proposed to be made to section 153B of the Income-tax Act.
These amendments will take effect from 1st June, 2011.