Budget 2017: Rationalisation of time limits for completion of assessment, reassessment and re-computation
and reducing the time for filing revised return
The existing provisions of section 153 specify time limit for completion of assessment, reassessment and re-computation of cases mentioned therein.
In the effort to minimise human interface and move towards technology, massive computerisation has been carried out in the Department, which has translated into overall enhanced efficiency in the functioning of the Department. In view of the same, it is proposed to amend sub-section (1) of the said section, to provide that for the assessment year 2018-19, the time limit for making an assessment order under sections 143 or 144 shall be reduced from existing twenty-one months to eighteen months from the end of the assessment year, and for the assessment year 2019-20 and onwards, the said time limit shall be twelve months from the end of the assessment year in which the income was first assessable.
It is further proposed to amend sub-section (2) of the said section to provide that the time limit for making an order of assessment, reassessment or re-computation under section 147, in respect of notices served under section 148 on or after the 1st day of April, 2019 shall be twelve months from the end of the financial year in which notice under section 148 is served.
It is also proposed to amend sub-section (3) of the said section to provide that the time limit for making an order of fresh assessment in pursuance of an order passed or received in the financial year 2019-20 and onwards under sections 254 or 263 or 264 shall be twelve months from the end of the financial year in which order under section 254 is received or order under section 263 or 264 is passed by the authority referred therein.
These amendments will take effect from 1st April, 2017.
It is also proposed to amend sub-section (5) of the said section to provide that where an order under section 250 or 254 or 260 or 262 or 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 heard is to be provided to the assessee, the time limit relating to fresh assessment provided in sub-section (3) shall apply to the order giving effect to such order.
It is also proposed to amend sub-section (9) of the said section to provide that where a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or under section 148 has been issued prior to the 1st day of June, 2016 and the assessment or reassessment has not been completed by such date due to exclusion of time referred to in Explanation 1, such assessment or reassessment shall be completed in accordance with the provisions of section 153 as it stood immediately before its substitution by the Finance Act, 2016.
These amendments will take effect retrospectively from 1st June, 2016.
It is also proposed to amend third proviso to Explanation 1 of the said section to omit the reference of section 1 53B therein.
It is also proposed to consequentially amend the meaning of conclusion of proceeding in the Explanation to clause (b) of section 245A so as to provide that conclusion of proceedings shall be construed in accordance with the time specified for making assessment or reassessment under sub-section (1) of section 153.
These amendments will take effect from 1st April, 2017.
In order to expedite assessments of the Department as proposed above, it is critical that the returns for an assessment year also freeze by the end of the assessment year. It is hence proposed to amend the provisions of sub-section (5) of section 139 to provide that the time for furnishing of revised return shall be available upto the end of the relevant assessment year or before the completion of assessment, whichever is earlier.
These amendments will take effect from 1st April, 2018 and will, accordingly apply in relation to assessment year 2018-19 and subsequent years.
[Clauses 55, 58 & 78]
Extract of relevant clause from Finance Bill, 2017
Amendment of section 139.
55. In section 139 of the Income-tax Act, with effect from the 1st day of April, 2018,—
(i) in sub-section (4C),—
(I) after clause (c), the following clause shall be inserted, namely:—
“(ca) person referred to in clause (23AAA) of section 10;”;
(II) after clause (eb), the following clauses shall be inserted, namely:—
“(eba) Investor Protection Fund referred to in clause (23EC) or clause (23ED) of section 10;
(ebb) Core Settlement Guarantee Fund referred to in clause (23EE) of section 10;”;
(III) after clause (f), the following clause shall be inserted, namely:—
“(fa) Board or Authority referred to in clause (29A) of section 10;”;
(IV) in the long line occurring after clause (h), after the words “association or institution,”, the words “person or” shall be inserted;
(ii) in sub-section (5) [as substituted by section 67 of the Finance Act, 2016], the words “the expiry of one year from” shall be omitted.
Amendment of section 153.
58. In section 153 of the Income-tax Act,—
(i) in sub-section (1), the following provisos shall be inserted, namely:—
‘Provided that in respect of an order of assessment relating to the assessment year commencing on the 1st day of April, 2018, the provisions of this sub-section shall have effect, as if for the words “twenty-one months”, the words “eighteen months” had been substituted:
Provided further that in respect of an order of assessment relating to the assessment year commencing on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words “twenty-one months”, the words “twelve months” had been substituted.’;
(ii) in sub-section (2), the following proviso shall be inserted, namely:—
‘Provided that where the notice under section 148 is served on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words “nine months”, the words “twelve months” had been substituted.’;
(iii) in sub-section (3), the following proviso shall be inserted, namely:—
‘Provided that where the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Principal Commissioner or Commissioner on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words “nine months”, the words “twelve months” had been substituted.’;
(iv) in sub-section (5), after the proviso, the following proviso shall be inserted and shall be deemed to have been inserted with effect from the 1st day of June, 2016, namely:—
“Provided further that where an order under section 250 or section 254 or section 260 or section 262 or section 263 or section 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 heard is to be provided to the assessee, the order giving effect to the said order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264 shall be made within the time specified in sub-section (3).”;
(v) in sub-section (9), the following proviso shall be inserted and shall be deemed to have been inserted with effect from the 1st day of June, 2016, namely:—
“Provided that where a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or section 148 has been issued prior to the 1st day of June, 2016 and the assessment or reassessment has not been completed by such date due to exclusion of time referred to in Explanation 1, such assessment or reassessment shall be completed in accordance with the provisions of this section as it stood immediately before its substitution by the Finance Act, 2016.”;
(vi) in Explanation 1, in the third proviso, the figures and letter “153B,” shall be omitted.
Amendment of section 245A.
78. In section 245A of the Income-tax Act, in clause (b), in the Explanation, in clause (iv), for the words “two years from the end of the relevant assessment year”, the words, brackets and figures “the time specified for making assessment under sub-section (1) of section 153” shall be substituted.
