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Issues involved: Interpretation of section 153 of the Income Tax Act, 1961 regarding the completion of assessment within the prescribed time limit.
Summary: The High Court of GAUHATI was presented with a question regarding the completion of assessment within the specified time limit as per section 153 of the Income Tax Act, 1961. The case involved the assessment of an individual's income for the year 1963-64, with the assessment order being passed on March 16, 1968. The assessee contended that the assessment was barred by time under section 153 of the Act. The Appellate Authority Commissioner (AAC) held that the assessment order was passed before March 31, 1968. The assessee then appealed to the Income-tax Appellate Tribunal, reiterating the argument that the assessment order was time-barred. The Tribunal, however, held that the assessment was completed on March 16, 1968, and the demand notice was issued on March 30, 1968. The key issue revolved around the interpretation of section 153 of the Income Tax Act, which specifies the time limit for passing an assessment order. The section mandates that an assessment order must be passed within four years from the end of the assessment year. In this case, the assessment year ended on March 31, 1968, and the assessment order was passed on March 16, 1968, well within the prescribed time limit. The demand notice, although dated March 20, 1968, was issued on March 30, 1968, after the assessment order was already passed. The Court emphasized that the demand notice is a separate stage from the assessment order and does not need to be issued within the same time frame. The order of assessment must be passed within the specified period, and in this case, it was completed within the required time limit. Therefore, the Court ruled in favor of the Income Tax Officer, stating that the assessment was not barred by limitation under section 153 of the Act. In conclusion, the Court's decision was in favor of the Income Tax Officer, affirming that the assessment was completed within the stipulated time frame as per section 153 of the Income Tax Act, 1961.
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