Limitation for reassessment: court-linked findings and excluded stay periods brought the assessment within time.

The limitation scheme under the Income Tax Act and Wealth Tax Act distinguishes a routine fresh assessment after an appellate setting-aside from an assessment made to give effect to a finding or direction in a court or appellate order; the latter is not confined by the ordinary limitation period. On the facts described, the assessment was completed only after disputes over the legal heirs and the nature of the estate were finally resolved in civil and writ proceedings, and the period during which proceedings were stayed by court orders was excluded. The assessment was therefore treated as one made in consequence of court determinations on status and ownership, not as a time-barred fresh assessment.

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Issues: Whether the assessment order dated 8.2.2007 was barred by limitation, and whether the case fell within the general limitation rule for fresh assessment or within the exception for assessments made in consequence of a finding or direction in a court order.

Analysis: The limitation scheme under the Income Tax Act and the Wealth Tax Act draws a distinction between a fresh assessment made after an appellate order setting aside the assessment, and an assessment made to give effect to a finding or direction contained in an order of a court or appellate authority. In the latter situation, no ordinary limitation period applies. Here, the assessment was completed only after the disputes regarding the legal heirs and the nature of the estate were finally resolved by the civil and writ proceedings. The period during which the assessment proceedings remained stayed by court orders was also excluded. The assessment was therefore made to give effect to the court determinations on status and ownership, not as a routine fresh assessment governed by the shorter limitation provision.

Conclusion: The assessment order dated 8.2.2007 was within limitation and the challenge based on limitation failed.

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