Limitation on reassessment: procedural remand without a substantive finding does not extend reassessment limitation, so reassessment is time barred.

Re assessment proceedings for AY 2015 16 are time barred because the provisos governing limitation and the additional sixty day extension yield a last date of 19.02.2024, by which no order was passed. The principle applied is that extended limitation applies only where a prior order contains a substantive finding or direction necessary to dispose of the case and which governs the course of assessment; procedural remands that merely set timelines, permit objections or require personal hearings and expressly disclaim merit do not qualify as such findings or directions. Result: reassessment barred and petition allowed in favour of the assessee.

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Issues: Whether the re-assessment proceedings initiated by notice dated 04.02.2020 for Assessment Year 2015-16 are barred by limitation under the first proviso to Section 153(2) read with the first proviso to Explanation 1 to Section 153 of the Income-tax Act, 1961, and whether the extended limitation under Section 153(6)(i) applies by reason of the High Court's order dated 29.08.2023 (i.e., whether that order contains any 'finding' or 'direction' within the meaning of Section 153(6)(i)).

Analysis: The legal framework comprises Section 148 (notice for reopening), Section 153(2) and Explanation 1 provisos (ordinary limitation and exclusions/extensions) and Section 153(6)(i) (extended limitation where assessment is in consequence of or to give effect to a finding or direction contained in specified orders). For Section 153(6)(i) to apply, the prerequisite is that the principal order must contain a 'finding' or 'direction' that is necessary for disposal of the relevant case and that governs or controls the course of assessment, reassessment or recomputation. Orders that merely remand the matter with timelines, permit filing of objections, direct personal hearing or lay down procedural steps without expressing findings or mandatory directions do not qualify. Applying these principles, the High Court's order dated 29.08.2023 only remitted the matter to the Assessing Officer with timelines for supply of reasons, filing and disposal of objections, and for personal hearing; it expressly disclaimed any observation on merits. Such procedural remand does not amount to a 'finding' or 'direction' within the meaning of Section 153(6)(i). Computing limitation with exclusion period and the additional sixty-day extension as per the provisos yields the last date for passing assessment as 19.02.2024, by which no assessment order was passed; accordingly the re-assessment is time-barred.

Conclusion: The re-assessment proceedings are barred by limitation; Section 153(6)(i) does not apply because the High Court's order dated 29.08.2023 contains no 'finding' or 'direction' as required; the writ petition is allowed in favour of the petitioner (assessee) and the rule is made absolute disposing the petition on the ground of limitation.

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