Amendment of section 153.
72. In section 153 of the Income-tax Act,––
(I) in sub-section (1),––
(a) in the third proviso, the words “or after” shall be omitted;
(b) after the third proviso, the following proviso shall be inserted, namely:––
“Provided also that in respect of an order of assessment relating to the assessment year commencing on or after the 1st day of April, 2022, 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 (1A), for the words “nine months”, the words “twelve months” shall be substituted;
(III) in sub-section (3),––
(a) for the words, brackets and figures “sub-sections (1) and (2)”, the words, brackets, figures and letter “subsections (1), (1A) and (2)” shall be substituted;
(b) for the words “Principal Commissioner or Commissioner” at both the places where they occur, the words “Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be,” shall be substituted;
(IV) after sub-section (3), the following sub-section shall be inserted, namely:––
“(3A) Notwithstanding anything contained in subsections (1), (1A), (2) and (3), where an assessment or reassessment is pending on the date of initiation of search under section 132 or making of requisition under section 132A, the period available for completion of assessment or reassessment, as the case may be, under the said sub-sections shall,––
(a) in a case where such search is initiated under section 132 or such requisition is made under section 132A;
(b) in the case of an assessee, to whom any money, bullion, jewellery or other valuable article or thing seized or requisitioned belongs to;
(c) in the case of an assessee, to whom any books of account or documents seized or requisitioned pertains or pertain to, or any information contained therein, relates to,
be extended by twelve months.”;
(V) in sub-section (4), for the words, brackets and figures “sub-sections (1), (2) and (3)” at both the places where they occur, the words, brackets, figures and letters “sub-sections (1), (1A), (2), (3) and (3A)” shall be substituted;
(VI) in sub-section (5), for the words “the Principal Commissioner or Commissioner”, the words “the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be,” shall be substituted;
(VII) in sub-section (6),––
(a) in the opening portion, for the words, brackets and figures “sub-sections (1) and (2)”, the words, brackets, figures and letter “sub-sections (1), (1A) and (2)” shall be substituted;
(b) in clause (i), after the words “passed by the”, the words “Principal Chief Commissioner or Chief Commissioner or” shall be inserted;
(VIII) in Explanation 1,––
(a) in clause (iv),––
(i) in the opening portion, after the word “audited”, the words “or inventory valued” shall be inserted;
(ii) in sub-clause (a), after the words “such audit”, the words “or inventory valuation” shall be inserted;
(b) in the first proviso, for the words, brackets and figures “sub-sections (1), (2)”, the words, brackets, figures and letter “sub-sections (1), (1A), (2)” shall be substituted.
Notes on Clauses:
Clause 72 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.
It is proposed to amend the third proviso to sub-section (1) to provide that the period of nine months specified therein to pass an order of assessment shall be applicable only to the assessment year commencing on 1st April, 2021.
It is further proposed to insert a new proviso, so that an order of assessment relating to the assessment year commencing on or after 1st April, 2022 shall be passed within twelve months from the end of the assessment year in which the income was first assessable.
It is also proposed to increase the said time limit to pass an order of assessment from nine months to twelve months from the end of the financial year in which return under subsection (8A) of section 139 was furnished.
It is also proposed to amend sub-section (3) of the said section to provide that the provisions of the said sub-section shall also be applicable to order under section 263 or section 264, passed by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be.
It is also proposed to insert a new sub-section (3A) in the said section to provide that notwithstanding anything contained in sub-sections (1), (1A), (2) and (3) of the said section, where an assessment or reassessment is pending on the date of initiation of search under section 132 or making of requisition under section 132A, the period available for completion of assessment or reassessment, as the case may be, under the said sub-sections (1), (1A), (2) and (3) of the said section shall be extended by twelve months in a case where such search is initiated under section 132 or such requisition is made under section 132A or in the case of an assessee to whom any money, bullion, jewellery or other valuable article or thing seized or requisitioned belongs to or in the case of an assessee to whom any books of account or documents seized or requisitioned pertains or pertain to, or any information contained therein, relates to.
It is also proposed to amend sub-section (4) of the said section to provide that the provisions thereof shall also be applicable to cases covered by sub-sections (1A) and (3A) of section 153 of the Act.
It is also proposed to amend sub-section (5) of the said section to provide that the provision of the said sub-section shall also be applicable to an order under section 263 or section 264 passed by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be.
It is also proposed to amend sub-section (6) of the said section to provide that nothing contained in sub-section (1A) shall also apply to the classes of assessments, reassessments and re-computation mentioned therein.
Clause (i) of the sub-section (6) of the said section provides that 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, section 254, section 260, section 262, section 263, or section 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act, such assessment, reassessment or recomputation shall be completed on or before the expiry of twelve months from the end of the month in which such order is received or passed by the Principal Commissioner or Commissioner, as the case may be.
It is also proposed to amend the said sub-section to provide that provisions of the said sub-section shall also be applicable to an order under section 263 passed by the Principal Chief Commissioner or Chief Commissioner.
It is also proposed to amend the first proviso to Explanation 1 of the said section so as to also make it available to the period of limitation mentioned in sub-section (1A) of the said section.
These amendments will take effect from 1st April, 2023.
It is also proposed to amend clause (iv) of Explanation 1 to the said section, so as to exclude the period for inventory valuation through the cost accountant for the purposes of computation of time limit.
This amendment will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years.
