Limitation for assessment excludes section 144B draft-procedure time, keeping the assessment order within time.

For computing limitation for assessment, the period consumed in the statutory draft-assessment reference procedure under section 144B must be excluded under section 153, as recognised by binding precedent. Applying that exclusion, the assessment order was treated as within time and not barred by limitation.

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Issues: Whether the assessment was barred by limitation and whether the period spent in the reference procedure under section 144B was liable to be excluded while computing limitation under section 153.

Analysis: The assessment for the relevant year was completed beyond two years from the end of the financial year, but the statutory time for completion had to be computed after excluding the period taken in forwarding the draft assessment order and receiving directions under the reference procedure. The applicable legal position, as already recognised in the binding precedent relied upon by the Court, was that the interval covered by the section 144B procedure is excludable for the purpose of limitation under section 153.

Conclusion: The assessment was not barred by limitation and the answer to the reference was against the assessee and in favour of the Revenue.

Final Conclusion: The reference was answered by holding that the assessment order was within time after exclusion of the period consumed in the statutory draft-assessment procedure.

Ratio Decidendi: For computing the limitation for completing assessment, the period legitimately consumed in the section 144B draft-assessment reference procedure must be excluded under section 153.

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