Exchange of information treaty reference could not extend reassessment limitation for an earlier assessment year.

A reference for exchange of information under the India-Switzerland tax treaty did not extend the limitation period for reassessment where the requested information related to assessment year 2008-09. The treaty protocol and implementing notification limited the exchange-of-information mechanism to fiscal years beginning on or after 1 April 2011, so the amended arrangement could not apply retrospectively to the earlier year. As the reference was incapable of yielding information for the relevant period, it could not trigger the statutory extension of time under section 153B. The reassessment completed on 29.12.2016 was therefore time-barred.

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Issues: Whether the reference made for exchange of information under the India-Switzerland tax treaty, in relation to assessment year 2008-09, validly extended the limitation period for completion of the reassessment under section 153B of the Income-tax Act, 1961.

Analysis: The assessment was required to be completed within the normal period under section 153B, unless the time limit stood extended by a valid reference for exchange of information under the treaty and the corresponding statutory explanation. The treaty protocol and the notification giving effect to it showed that the exchange of information mechanism applied only to information relating to fiscal years beginning on or after 1 April 2011. The requested information for assessment year 2008-09 therefore fell outside the temporal scope of the amended protocol. Since the reference itself was incapable of yielding the sought information for the relevant year, it could not operate to extend limitation under the statutory provision.

Conclusion: The reference was not valid for assessment year 2008-09 and did not extend the limitation period. The assessment completed on 29.12.2016 was time-barred and the assessee succeeded on the legal ground.

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