Treaty-based exclusion from reassessment limitation depends on valid exchange-of-information request within the DTAA's operative period.

The exclusion of time under Explanation (ix) to section 153B applies only when an exchange-of-information request is made under a treaty covered by section 90 or section 90A and within that treaty's operative temporal scope. A request made after the Indo-Swiss DTAA protocol substitution, but for a period outside the new article's effective reach, was not maintainable under the treaty. On that basis, the limitation period for reassessment could not be extended, the assessments were barred by limitation, and penalty orders founded on those assessments could not survive.

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Issues: Whether the period of limitation for completing reassessment under section 153B could be extended by the exclusion in Explanation (ix) where the reference for exchange of information was not made in terms of the Indo-Swiss DTAA read with section 90 or section 90A of the Income-tax Act, 1961.

Analysis: The exclusion under Explanation (ix) to section 153B applies only when a reference for exchange of information is made under an agreement covered by section 90 or section 90A. The Amending Protocol to the Indo-Swiss DTAA substituted the earlier exchange-of-information provision and made the new article operative only for information relating to the prescribed later period. A request made after the substitution, but for a period preceding its effective operation, was not maintainable under the treaty. Since the Revenue's reference was made under the treaty framework for a period outside its temporal reach, the statutory exclusion for limitation could not be invoked.

Conclusion: The assessments were barred by limitation, and the penalty orders founded on those assessments could not survive.

Final Conclusion: The assessees succeeded on the limitation issue, while the Revenue's connected appeals failed, and the consequential penalty orders also fell with the assessment orders.

Ratio Decidendi: The exclusion period under Explanation (ix) to section 153B is available only where the information request is made in accordance with the relevant tax treaty under section 90 or section 90A and within its operative temporal scope.

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