Scope of Sec.153(1) vis-a-vis Sec.143(1). - Income Tax - 1371/CBDT

INSTRUCTION NO. 1371/CBDT Dated: November 29, 1980 Reference is invited to Instruction No.308 dated 9th June 1971 in which the provisions of sec.143(1) as introduced by the Taxation Laws 1970 was explained w.r.t time limit for filing of objections, reopening of assessments and completion of fresh assessments thereon. It was also desired that to obviate difficulties it is necessary that summary assessments u/s.143(1) are made well before the expiry of the limitation period and if for any reason whatsoever an assessment is not disposed of well within time, the I.T.O. should proceed to make the assessment u/s.143(3) without first completing a summary assessment u/s.143(1). 2. References have again been received in the same connection which are replied as under in consultation with the Ministry of Law: Question No.1: What is the time limit for completion of assessment u/s.143(3) when objection is filed u/s.143(2)(a) or the assessment is re-opened u/s.143(2)(b)? Answer: Time limit provided u/s.153(1)(a) will apply for completion of assessments or re-assessments in pursuance to objections received u/s.143(2)9a) or assessments reopened u/s.143(2)(b). Time limit u/s.153 does not get extended. Question No.2: Can the time limit be extended u/s.153 if the objection u/s.143(2)(b) is filed after expiry of limitation period u/s.153 but within one month of the service of notice of demand? Answer: Time limit u/s.153 would not get extended in such cases. The bar prescribed by sec.153 is not on filling of the objection but on the making of the order of assessment. Question No.3: What is the fate of the assessment made u/s.143(1) where an assessee has filed objection but the I T O fails to issue notice u/s.143(2), or having issued the notice u/s.143(2), fails to complete the assessment before the expiry of the limitation period provided u/s.153(1)(a)? Answer: After the expiry of the period of limitation prescribed u/s.153 no assessment can be made in terms of sec.143(3) of the act. So far as the failure of the I.T.O. to issue notice u/s.143(2) is concerned it is violative of the provisions of sec.143(2) which is a mandatory requirement 3. In view of the above the Board desire that these instructions may be reiterated to all the I.T.Os working in your charge and they should be asked to scrupulously keep track of the applications filed u/s.143(2)(a) and the assessments reopened by them u/s.143(2)(b) by watching the time limit for completion of assessments. With reference to annual register required to be maintained as per Board's Instruction No.305(F.No.220/29/71(ITA II)) dated 5-7-71.