New time limits for completion of assessment or reassessment under sections 153 and 153B in cases where reference is made to TPO to apply irrespective of the date of reference to TPO or the date of passing of order under section 92CA(3)

Section 153 provides for the time limit for completion of assessments and reassessments. With respect to income first assessable in the A.Y.2009-10 or any subsequent assessment year, the Finance Act, 2012 had extended the time limit for completion of assessment under section 143(3) or section 144 from 33 months to 3 years in case where, during the course of the assessment proceeding, reference is made to the Transfer Pricing Officer (TPO) under section 92CA(1).

Further, where notice under section 148 is served on or after 1.4.2010, the Finance Act, 2012 had extended the time limit for completion of assessment, reassessment or recomputation under section 147 from 21 months to 2 years from the end of the financial year in which notice under section 148 was served in a case where reference under section 92CA(1) is made during the course of the assessment proceeding to the TPO.

However, in both the above cases, the extended time limit was applicable only if the reference was made –

–      on or after 1st July, 2012 or

–      before 1st July, 2012 but the order of TPO has not been made upto that date.

The said provisions are now proposed to be amended to provide that the extended time limits of 3 years and 2 years, respectively, will be applicable irrespective of the time of making reference to TPO and date of passing of order by the TPO.

Section 153B which deals with the time limit for completion of assessment in case of search or requisition, is also proposed to be amended on the similar lines.

Related Amendment  to Finance Bill 2013  which presented in Lok sabha on 28.02.2013 and as passed by Lok Sabha on 30.04.2013

Page 21 for line 8, substitute-

37 In section 153 of the Income-tax Act,

   (I) in sub-section (I), for the third proviso, the following proviso shall be substituted and shall he deemed to have been substituted with effect from the 1st day of July 2012, namely:

   ‘Provided also that in case the assessment year in which the income was first assessable is the assessment year commencing on the 1st day of April, 2009 or any subsequent assessment year and during the course of the proceeding for the assessment of total income a reference under sub-section (I) of section 92CA is made, the provisions of clause (a) shall, notwithstanding anything contained in the first proviso, have effect as if for the words “two years the words three years” had been substituted

   (II) in sub section (2), for the fourth proviso, the following proviso shall be substituted and shall be deemed to have been substituted with effect from the 1st day of July 2012, namely:

   ‘Provided also that where the notice under section 148 was served on or after the 1st day of April, 2010 and during the course of the proceeding for the assessment or reassessment or recomputation of total income, a reference under sub-section (1) of section 92CA is made. the provisions of this sub-section shall notwithstanding anything contained in the second proviso, have effect as if for the words “one year”, the words “two years” had been substituted.’:

(Ill) In sub-section (2A), for the fourth proviso, the following proviso shall be substituted and shall be deemed to have been substituted with effect from the 1st day of July, 2012, namely:-

   ‘Provided also that where the order under section 254 is received by the Chief Commissioner or Commissioner or, as the case may be the order under section 263 or section 264 is passed by the Commissioner on or after the 1st day of April, 2010, and during the course of the proceeding for the fresh assessment of total income a reference under sub-section (I) of section 92CA is made. the provisions of this sub-section shall, notwithstanding anything contained in the second proviso, have effect as it’ for the words “one year”. the words “two years” had been substituted.’;

(1V) in Explanation I-,

 Page 21, for line 3I, substitute

38. In section 153B of the income-tax Act, in sub-section (I)-

(a) for the fourth proviso, the following proviso shall be substituted and shall be deemed to have been substituted with effect from the 1st day of July, 2012, namely:-.

   ‘Provided also that in case where the last of the authorizations for search under section 132 or for requisition under section 132A was executed during the financial year commencing on the 1st day of April, 2009 or any subsequent financial year and during the course of the proceeding for the assessment or reassessment of total income, a reference under sub-section (I) of section 92CA is made, the provisions of clause (a) or clause (b) of this sub-section, shall not withstanding anything contained in clause (i) of the second proviso, have effect as if’ for the words “two years”, the words -three years” had been substituted;

(b) for the sixth proviso the following proviso shall be substituted and shall be deemed to have been Substituted with effect from the 1st day of July, 2012, namely:-

   ‘Provided also that in case where the last of the authorisations for search under section 132 or for requisition under section 132A was execute financial year commencing on the last day of April, 2009 or any subsequent financial year and during the course of the proceeding for the assessment or reassessment of total income. in case of other person referred to in section 153C, a reference under sub-section (I) of section 92CA is made, the period of limitation for making the assessment or reassessment in case of such other person shall, notwithstanding anything contained in clause (ii) of the second proviso, be the period of thirty-six months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed or twenty four months from the end of the financial year in which books of account or documents or asset seized or requisitioned are handed over under section 153C to the Assessing Officer having jurisdiction over such other person, whichever is later.

(c) in the Explanation,

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