Limitation under section 153B: assessments under section 153C must be completed within twelve months, late orders invalid.

Assessments framed under section 153C consequent to search and seizure are governed by the limitation period in section 153B; for searches on or after 1 April 2019 the substituted twelve-month period from the end of the financial year in which seized books or documents are handed over (or the last authorization is executed) controls completion. Extensions relied upon by revenue do not extend that twelve-month period except where a transfer pricing reference under section 92CA is made. Applied to the facts, final orders dated 17/01/2025 were beyond the statutory period and were quashed.

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Issues: (i) Whether the final assessment orders passed under section 153C read with section 144C(13) of the Income-tax Act, 1961 dated 17/01/2025 for assessment years 2016-17 to 2019-20 are barred by limitation under section 153B of the Income-tax Act, 1961.

Analysis: The Tribunal examined the timeline: search in the case of the searched person occurred on 22/10/2019; satisfaction for initiation under section 153C was recorded on 02/08/2022 and notice under section 153C was issued on 03/08/2022. Section 153B prescribes the time limit for completion of assessments in cases of search assessments, and, for searches conducted on or after 1 April 2019, the relevant period for persons covered by section 153C is twelve months from the end of the financial year in which books of account or documents seized are handed over to the assessing officer having jurisdiction over the other person (or twelve months from end of the financial year in which the last authorization was executed, whichever is later). The Tribunal held that the fourth proviso or other extensions relied upon by the Revenue do not operate to extend the twelve-month period under section 153B except where a reference under section 92CA (transfer pricing) is made. Applying section 153B to the facts, the Tribunal concluded that the assessments required completion by 31/03/2024 (twelve months from end of the financial year in which notice under section 153C was issued) and that the final orders dated 17/01/2025 were therefore beyond the statutory period.

Conclusion: The final assessment orders passed under section 153C read with section 144C(13) dated 17/01/2025 for assessment years 2016-17 to 2019-20 are barred by limitation under section 153B of the Income-tax Act, 1961 and are quashed; the appeals are allowed in favour of the assessee.

Ratio Decidendi: Where assessments are framed under section 153C consequent to search and seizure, the time limit prescribed by section 153B of the Income-tax Act, 1961 applies; the twelve-month period (as substituted for searches on or after 1 April 2019) governs completion of assessment for persons under section 153C and an extension of that period is available only where a reference under section 92CA is made for transfer pricing, and not otherwise.

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