The Finance Bill 2025 proposes amendments to various sections of the Income-tax Act to clarify the period to be excluded when court proceedings are stayed. Sections 144BA, 153, 153B, 158BE, 158BFA, 263, 264, and Rule 68B of Schedule II currently exclude the period of stay but lack clarity on its exact commencement and end dates. The proposed amendments define the exclusion period as beginning on the date a stay is granted by a court order and ending when the jurisdictional Principal Commissioner or Commissioner receives the certified copy of the order vacating the stay.
These changes apply to several provisions, including those related to assessments, reassessments, block assessments, tax recovery, and penalties. For instance, amendments to sections 153 and 153B specify that the period during which an assessment proceeding is stayed will now be precisely determined. Similarly, amendments to sections 158BE and 158BFA address block assessment time limits and penalty proceedings. Sections 263 and 264, concerning revisions of tax orders, and Rule 68B, regarding the sale of attached immovable property, are also amended to incorporate the clarified exclusion period.
These amendments aim to eliminate ambiguity and ensure uniformity in calculating the limitation period for tax proceedings. Most of the changes will take effect from April 1, 2025, while some provisions, such as the amendment to section 158BE, will apply retrospectively from February 1, 2025.
Budget 2025: Clarification regarding commencement date and the end date of the period stayed by the Court
Section 144BA, section 153, section 153B, section 158BE, section 158BFA, section 263, section 264 and Rule 68B of Schedule-II of the Act, inter-alia, provide that period during which the proceedings under respective provisions are stayed by an order or injunction of any court shall be excluded in computing the time limit for conclusion of the proceedings.
2. However, there was an ambiguity regarding the commencement date and the end date of the period stayed by an order or injunction of any court which was required to be excluded.
3. With a view to removing any ambiguity, it is proposed to amend the said provisions of the Act so as to exclude the period commencing on the date on which stay was granted by an order or injunction of any court and ending on the date on which certified copy of the order vacating the stay was received by the jurisdictional Principal Commissioner or Commissioner (Approving panel in case of section 144BA of the Act).
4. This amendment will take effect from the 1st day of April, 2025.
[Clauses 41, 43, 44, 49, 50, 72, 73 & 86]
Extract of Relevant Clauses of Finance Bill, 2025
Clause 41 of the Bill seeks to amend the section 144BA of the Income-tax Act relating to reference to Principal Commissioner or Commissioner in certain cases.
The said section, inter alia, provides that if the Assessing Officer considers that it is necessary to declare an arrangement as an impermissible avoidance arrangement, then, he may make a reference to the Principal Commissioner or Commissioner and to determine the consequence of such an arrangement within the meaning of the General Anti-Avoidance Rules.
Sub-section (13) of the said section provides that the Approving Panel shall issue directions declaring such arrangement as an impermissible avoidance arrangement within six months from the end of the month in which the reference was received.
Clause (ii) of the Explanation to the said section provides that the period during which the proceeding of the Approving Panel is stayed by an order or injunctions of any court shall be excluded in computing the period as per sub-section (13).
It is proposed to amend the said clause so as to clarify the commencement date and the end date of such exclusion period.
This amendment will take effect from 1st April, 2025.
Clause 43 of the Bill seeks to amend the section 153 of the Income-tax Act relating to time limit for completion of assessment, reassessment and recomputation.
The said section, inter alia, provides various time limits for completion of assessment, reassessment and recomputation under various provisions of the said Act.
Clause (ii) of Explanation 1 to the said section, inter alia, provides that the period during which the assessment proceeding is stayed by an order or injunction of any court shall be excluded in computing the period of limitation.
It is proposed to substitute the said clause so as to clarify the commencement date and the end date of such exclusion period.
This amendment will take effect from 1st April, 2025.
Clause 44 of the Bill seeks to amend the section 153B of the Income-tax Act relating to time limit for completion of assessment under section 153A.
The said section, inter alia, provides that the Assessing Officer shall make an order of assessment or reassessment within twelve months from the end of the financial year in which the last of the authorisations for search or requisition was executed.
Clause (i) of the Explanation to the said section, inter alia, provides that the period during which the assessment proceeding is stayed by an order or injunction of any court shall be excluded in computing the period of limitation.
It is proposed to substitute the said clause so as to clarify the commencement date and the end date of such exclusion period.
This amendment will take effect from 1st April, 2025.
Clause 49 of the Bill seeks to amend section 158BE of the Income-tax Act relating to time-limit for completion of block assessment.
Section 158BE, inter alia, provides the time-limit for completion of block assessment as twelve months from end of the month in which the last of the authorisations for search or requisition has been executed.
It is proposed to amend sub-section (1) so as to provide that the order under section 158BC shall be passed within twelve months from the end of the quarter in which the last of the authorisations for search or requisition was executed.
It is also proposed to amend sub-section (3) of the said section so as to provide that the order under section 158BC in pursuance of section 158BD shall be passed within twelve months from the end of the quarter in which the notice under section 158BC in the case of the other person referred to in section 158BD, was issued.
This amendment will take effect retrospectively from 1st February, 2025.
Sub-section (1) of the said section provides that the order of block assessment shall be passed within twelve months from the end of the month in which the last of the authorisations for search or requisition was executed or made.
Clause (i) of sub-section (4) of the said section provides that the period during which the assessment proceeding is stayed by an order or injunction of any court shall be excluded in computing the period of limitation under this section.
It is proposed to substitute the said clause so as to clarify the commencement date and the ending date of such exclusion period.
This amendment will take effect from 1st April, 2025.
Clause 50 of the Bill seeks to amend section 158BFA of the Income-tax Act relating to levy of interest and penalty in certain cases.
The said section, inter alia, provides the procedure for the levy of interest and penalty in the case of search assessment.
Clause (ii) of sub-section (4) of the said section, inter alia, provides that the period during which the proceeding under sub-section (2) are stayed by an order or injunction of any court shall be excluded in computing the period of limitation under this section.
It is proposed to amend the said clause so as to clarify the commencement date and the ending date of such exclusion period.
This amendment will take effect from 1st April, 2025.
Clause 72 of the Bill seeks to amend the section 263 of the Income-tax Act relating to revision of orders prejudicial to revenue.
The said section, inter alia, provides for revision of order prejudicial to revenue by the Principal Chief commissioner or Chief Commissioner or Principal Commissioner or Commissioner.
Sub-section (2) of the said section provides that no order under the said section shall be made after the expiry of two years from the end of the financial year in which the order sought to be revised was passed.
The Explanation to the said section provides that the period during which any proceeding under that section is stayed by an order or injunction of any court shall be excluded in computing the period of limitation.
It is proposed to amend the said Explanation so as to clarify the commencement date and the ending date of such exclusion period.
This amendment will take effect from 1st April, 2025.
Clause 73 of the Bill seeks to amend the section 264 of the Income-tax Act relating to revision of other orders.
The said section inter alia, provides the procedure for revision of other orders by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner.
Sub-section (6), of the said section provides that an order shall be passed within one year from the end of the financial year in which such application is made by the assessee for revision.
The Explanation to the said sub-section provides that the period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded in computing the period of limitation.
It is proposed to amend the said Explanation so as to clarify the commencement date and the ending date of such exclusion period.
This amendment will take effect from 1st April, 2025.
Clause 86 of the Bill seeks to amend rule 68B of the Second Schedule to the Income-tax Act relating to time-limit for sale of attached immovable property.
The said rule provides the time limit for the sale of attached immovable property by the Tax Recovery Officer.
Clauses (i) and (ii) of sub-rule (2) of the said rule, inter alia, provides that the period during which the levy of the tax, interest, fine, penalty or any other sum is stayed by an order or injunction of any court; or the proceeding of attachment or sale of the immovable property are stayed by an order or injunction of any court shall be excluded in computing the period of limitation.
It is proposed to substitute clauses (i) and (ii) of the said sub-rule so as to clarify the commencement date and the ending date of such exclusion period.
This amendment will take effect from 1st April, 2025.
Extract of Relevant Amendment Proposed by Finance Bill, 2025
41. Amendment of section 144BA.
In section 144BA of the Income-tax Act, in the Explanation, for clause (ii), the following clause shall be substituted, namely:––
“(ii) the period commencing on the date on which stay on the proceeding of the Approving Panel was granted by an order or injunction of any court and ending on the date on which certified copy of the order vacating the stay was received by the Approving Panel:”.
43. Amendment of section 153.
In section 153 of the Income-tax Act, in Explanation 1, for clause (ii), the following clause shall be substituted, namely:––
“(ii) the period commencing on the date on which stay on the assessment proceeding was granted by an order or injunction of any court and ending on the date on which certified copy of the order vacating the stay was received by the jurisdictional Principal Commissioner or Commissioner; or”.
44. Amendment of section 153B.
In section 153B of the Income-tax Act, in the Explanation, for clause (i), the following clause shall be substituted, namely:––
“(i) the period commencing on the date on which stay on the assessment proceeding was granted by an order or injunction of any court and ending on the date on which certified copy of the order vacating the stay was received by the jurisdictional Principal Commissioner or Commissioner; or”.
49. Amendment of section 158BE.
In section 158BE of the Income-tax Act,
(a) in sub-section (1), for the words “from the end of the month”, the words “from the end of the quarter” shall be substituted and shall be deemed to have been substituted with effect from the 1st February, 2025;
(b) in sub-section (3), for the words “from the end of the month”, the words “from the end of the quarter” shall be substituted and shall be deemed to have been substituted with effect from the 1st February, 2025;
(c) in sub-section (4), for clause (i), the following clause shall be substituted, namely:––
“(i) the period commencing on the date on which stay on assessment proceedings was granted by an order or injunction of any court and ending on the date on which certified copy of the order vacating the stay was received by the jurisdictional Principal Commissioner or Commissioner; or”.
50. Amendment of section 158BFA.
In section 158BFA of the Income-tax Act, in subsection (4), for clause (ii), the following clause shall be substituted, namely:––
“(ii) the period commencing on the date on which stay on the proceeding under sub-section (2) was granted by an order or injunction of any court and ending on the date on which certified copy of the order vacating the stay was received by the jurisdictional Principal Commissioner or Commissioner;”
72. Amendment of section 263.
In section 263 of the Income-tax Act, in the Explanation, occurring after sub-section (3), for the words “any period during which any proceeding under this section is stayed by an order or injunction of any court”, the words “the period commencing on the date on which stay on any proceeding under this section was granted by an order or injunction of any court and ending on the date on which certified copy of the order vacating the stay was received by the jurisdictional Principal Commissioner or Commissioner” shall be substituted.
73. Amendment of section 264.
In section 264 of the Income-tax Act, in sub-section (6), in the Explanation, for the words “any period during which any proceeding under this section is stayed by an order or injunction of any court”, the words “the period commencing on the date on which stay on any proceeding under this section was granted by an order or injunction of any court and ending on the date on which certified copy of the order vacating the stay was received by the jurisdictional Principal Commissioner or Commissioner” shall be substituted.
86. Amendment of rule 68B of the Second Schedule.
In the Second Schedule to the Income-tax Act, in rule 68B, in sub-rule (2), for clauses (i) and (ii), the following clauses shall be substituted, namely:––
“(i) commencing on the date on which stay on levy of the said tax, interest, fine, penalty or another sum was granted by an order or injunction of any court and ending on the date on which certified copy of the order vacating the stay was received by the jurisdictional Principal Commissioner or Commissioner; or
(ii) commencing on the date on which stay on the proceeding of attachment or sale of the immovable property was granted by an order or injunction of any court and ending on the date on which certified copy of the order vacating the stay was received by the jurisdictional Principal Commissioner or Commissioner; or”.
