Limitation challenge to assessment timeline leads to notice and interim protection, while assessment proceedings may continue.

A limitation challenge was raised to an assessment order under the third proviso to section 153(1) of the Income-tax Act for AY 2021-22, on the ground that the time to complete assessment had expired. The HC directed issuance of notice because the issue required further examination. It allowed the Assessing Officer to continue the assessment proceedings, but protected the assessee by directing that any adverse order shall not be given effect to until further orders.

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Issues: Whether the writ petition raising a limitation challenge to the assessment order under the third proviso to Section 153(1) of the Income-tax Act, 1961 required further examination, and whether notice should be issued with interim protection.

Analysis: The petition concerned Assessment Year 2021-22 and questioned whether the time available to pass the assessment order had expired. The respondents indicated that the issue required further examination, and the Court directed issuance of notice. While permitting the Assessing Officer to continue the assessment proceedings, the Court protected the petitioner by directing that any adverse order shall not be given effect to until further orders.

Outcome: Notice issued. Counter-affidavit and rejoinder directed. Assessment proceedings may continue, but any adverse order shall remain inoperative until further directions.

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