Limitation on Reassessment: failure to commence reassessment within the statutory period renders later proceedings void and entitles refund.

Failure by revenue to initiate fresh assessment proceedings within the statutory limitation after a Tribunal remand extinguishes jurisdiction to reopen assessment; Section 153(5) read with Sections 153(3) and 153(4) prescribes the period which expired without any draft assessment or communication to the assessee, and only Transfer Pricing proceedings under Section 92CA were recorded thereafter without lawful commencement of reassessment. Consequently the later action was without jurisdiction and the assessee is entitled to restitution by refund, leading to allowance of the writ and a directed refund with interest.

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Issues: Whether the respondent-Revenue's failure to initiate fresh assessment proceedings within the statutory limitation period pursuant to the Tribunal's remand (order dated 16.09.2016) renders any subsequent action without jurisdiction and entitles the petitioner to refund of Rs.12,62,160/- with applicable interest for assessment year 2005-06.

Analysis: Section 153(5) read with Sections 153(3) and 153(4) of the Income-tax Act, 1961 prescribes the time-frame within which a fresh assessment must be completed after a remand by the Tribunal. The Tribunal's order dated 16.09.2016 reserved liberty to the Revenue to initiate proceedings afresh; the statutory limitation period relevant to that remand ran from 31.03.2017 and expired on 31.12.2017. No draft assessment order or communication initiating proceedings afresh was served on the assessee within the limitation period, and only proceedings before the Transfer Pricing Officer under Section 92CA of the Income-tax Act, 1961 were recorded without compliance with the requirement to commence and complete a reassessment under Section 153 within the prescribed period. Where the statutory time-bar has expired and no action to initiate reassessment within the limitation period was taken, any later attempt to proceed would be without jurisdiction, and the assessee is entitled to restitution in the form of refund of amounts paid pursuant to an assessment that cannot lawfully be reopened.

Conclusion: The writ petition is allowed. The respondent-Revenue is directed to refund Rs.12,62,160/- together with applicable interest for the assessment year 2005-06. The refund is to be made within twelve weeks.

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