Applicability of time limit u/s 153(2A)


section 153(2A)

 Nokia India (P) Ltd. v. Dy. CIT

Decision:    In assessee’s favour.

Assessment–Applicability of time-limit under  section 153(2A) — Proceedings remanded to AO–Non-cancellation of entire assessment order


Question arose for consideration is whether limitation period prescribe under section 153(2A) would be applicable only where a fresh order has to be pass de novo on fresh inquiry and not when the proceedings were remand to the AO with directions from the ITAT, however, without setting aside or cancelling entire assessment order. section 153(2A)


It was important to note that along with insertion of sub-section (2A) to section 153, sub-section (3) underwent a simultaneous change. It is expressly make ‘subject to the provisions of sub-section (2A).’ This meant that section 153(2A) would thereafter apply only to such cases where section 153(2A) do not apply. In other words, in all instances of AO having to pass a fresh assessment order upon remand where section 153(2A) would apply, he would be bond to follow the time-limit impos by sub-section (2A).

Where the AO is only giving effect to an appellate order, then section 153(2A) (ii) would apply. The object behind introduction of sub-section (2A) is to prescribe a time limit. For completing the assessment processing upon original assessment set aside or being cancel in appeal.

There is a distinction between an ‘assessment’ that is set side and an ‘assessment order’ set side. When the assessment on an issue is set aside and the matter remand. With a direction that the issue to be determin afresh, section 153(2A) would get attract. Therefore, time-limit prescribe under section 153(2A) was applicable to the facts of instant case.