Section 153 of the Income Tax Act is a crucial provision that deals with the time limit for completion of assessments, reassessments, and re-computations by the tax authorities. This provision lays down strict timelines within which the tax authorities must complete these proceedings to ensure that taxpayers are not subjected to undue delays and uncertainty.
The section divides the time limit for completion of assessments, reassessments, and re-computations into two parts- the time limit for normal cases and the time limit for special cases. Let us delve deeper into these provisions:
Time limit for normal cases (Section 153(1)):
The time limit for completion of assessments, reassessments, and re-computations in normal cases is as follows:
Assessments: The tax authorities must complete assessments within 21 months from the end of the assessment year in which the income was first assessable. For example, if the income was first assessable in the assessment year 2020-21, the assessment must be completed by December 31, 2022.
Reassessments: The tax authorities must complete reassessments within 9 months from the end of the financial year in which the notice for reassessment was served. For example, if the notice for reassessment was served on August 1, 2022, the reassessment must be completed by March 31, 2023.
Re-computations: The tax authorities must complete re-computations within 12 months from the end of the financial year in which the application for re-computation was made. For example, if the application for re-computation was made on July 1, 2022, the re-computation must be completed by March 31, 2023.
Time limit for special cases (Section 153(2)):
The time limit for completion of assessments, reassessments, and re-computations in special cases is as follows:
Assessments: The tax authorities must complete assessments within 33 months from the end of the assessment year in which the income was first assessable. This provision is applicable in cases where the assessment involves international transactions or specified domestic transactions.
Reassessments: The tax authorities must complete reassessments within 12 months from the end of the financial year in which the notice for reassessment was served. This provision is applicable in cases where the reassessment involves international transactions or specified domestic transactions.
Re-computations: The tax authorities must complete re-computations within 12 months from the end of the financial year in which the application for re-computation was made. This provision is applicable in cases where the re-computation involves international transactions or specified domestic transactions.
Section 153 of the Income Tax Act: Time Limit for Assessments, Reassessments, and Re-computations
Section 153 of the Income Tax Act is a crucial provision that lays down strict timelines for the completion of assessments, reassessments, and re-computations by the tax authorities. These timelines are meant to ensure that taxpayers are not subjected to undue delays and uncertainty, and that the tax authorities complete their proceedings in a timely and efficient manner.
In this blog post, we will delve deeper into the provisions of Section 153, understand the timelines laid down for assessments, reassessments, and re-computations, and examine the implications of these provisions for taxpayers.
Time Limit for Normal Cases:
The time limit for completion of assessments, reassessments, and re-computations in normal cases is as follows:
Assessments: The tax authorities must complete assessments within 21 months from the end of the assessment year in which the income was first assessable. For example, if the income was first assessable in the assessment year 2020-21, the assessment must be completed by December 31, 2022.
Reassessments: The tax authorities must complete reassessments within 9 months from the end of the financial year in which the notice for reassessment was served. For example, if the notice for reassessment was served on August 1, 2022, the reassessment must be completed by March 31, 2023.
Re-computations: The tax authorities must complete re-computations within 12 months from the end of the financial year in which the application for re-computation was made. For example, if the application for re-computation was made on July 1, 2022, the re-computation must be completed by March 31, 2023.
Time Limit for Special Cases:
The time limit for completion of assessments, reassessments, and re-computations in special cases is as follows:
Assessments: The tax authorities must complete assessments within 33 months from the end of the assessment year in which the income was first assessable. This provision is applicable in cases where the assessment involves international transactions or specified domestic transactions.
Reassessments: The tax authorities must complete reassessments within 12 months from the end of the financial year in which the notice for reassessment was served. This provision is applicable in cases where the reassessment involves international transactions or specified domestic transactions.
Re-computations: The tax authorities must complete re-computations within 12 months from the end of the financial year in which the application for re-computation was made. This provision is applicable in cases where the re-computation involves international transactions or specified domestic transactions.
Implications for Taxpayers:
The provisions of Section 153 have significant implications for taxpayers. These provisions ensure that the tax authorities complete their proceedings within a specified time frame, which provides certainty to taxpayers and enables them to plan their finances better.
In cases where the tax authorities fail to complete their proceedings within the specified time frame, the taxpayer has the right to file an appeal with the appropriate authorities. This appeal can lead to a reduction in the tax liability or a refund of excess taxes paid.
Conclusion:
Section 153 of the Income Tax Act is a crucial provision that lays down strict timelines for the completion of assessments, reassessments, and re-computations by the tax authorities. These timelines ensure that taxpayers are not subjected to undue delays and uncertainty, and that the tax authorities complete their proceedings in a timely and efficient manner.
Read more useful content:
- section 145 of income tax act
- section 10e of income tax act
- section 9 of the income tax act
- section 94b of income tax act
- section 206aa of income tax act
FAQs related to Section 153 of the Income Tax Act:
Q: What is the time limit for completion of assessments under Section 153 of the Income Tax Act?
A: The time limit for completion of assessments in normal cases is 21 months from the end of the assessment year in which the income was first assessable. In special cases, the time limit is 33 months from the end of the assessment year.
Q: What is the time limit for completion of reassessments under Section 153 of the Income Tax Act?
A: The time limit for completion of reassessments in normal cases is 9 months from the end of the financial year in which the notice for reassessment was served. In special cases, the time limit is 12 months from the end of the financial year.
Q: What is the time limit for completion of re-computations under Section 153 of the Income Tax Act?
A: The time limit for completion of re-computations is 12 months from the end of the financial year in which the application for re-computation was made.
Q: What are the implications for taxpayers if the tax authorities fail to complete their proceedings within the specified time frame under Section 153?
A: If the tax authorities fail to complete their proceedings within the specified time frame, the taxpayer has the right to file an appeal with the appropriate authorities. This appeal can lead to a reduction in the tax liability or a refund of excess taxes paid.
Q: Are there any exceptions to the time limits laid down under Section 153?
A: Yes, the tax authorities can extend the time limit for completion of assessments, reassessments, and re-computations in certain circumstances, such as when the taxpayer is not cooperating or when the case involves complex issues.
Q: How can taxpayers ensure that the tax authorities complete their proceedings within the specified time frame under Section 153?
A: Taxpayers can regularly follow up with the tax authorities and ensure that all necessary documents and information are provided in a timely manner. They can also seek the assistance of a tax professional to ensure that their case is being handled efficiently.
