Search assessment limitation under Section 153 failed after exclusion period still left the order beyond the deadline.

Search-related assessment under the Income-tax Act, 1961 was held to be time-barred because the reduced 12-month limitation under the fourth proviso to Section 153 had to be computed after excluding only the period covered by clause (xii) of Explanation (1), up to 180 days for handing over seized material to the Assessing Officer. On the stated facts, that exclusion extended the last permissible date only to 22.08.2024, while the assessment order was passed later. The statutory computation therefore rendered the order barred by limitation and liable to be quashed.

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Issues: Whether the assessment order for the relevant assessment year was barred by limitation under Section 153 of the Income-tax Act, 1961, having regard to the reduced time limit and the exclusion of time relating to search proceedings.

Analysis: The time limit for completion of assessment for the relevant year was 12 months from the end of the assessment year under the fourth proviso to Section 153 of the Income-tax Act, 1961. The case also fell within clause (xii) of Explanation (1) to Section 153, which excludes the period, up to 180 days, during which the seized material is handed over to the Assessing Officer. On the facts, the excluded period falling within the limitation window extended the last date for completion of assessment only up to 22.08.2024, while the assessment order was passed later. The statutory computation therefore made the order time-barred.

Conclusion: The assessment order was barred by limitation and was quashed.

Ratio Decidendi: For a search-related assessment, only the period falling within the limitation window and covered by clause (xii) of Explanation (1) to Section 153 of the Income-tax Act, 1961 can be excluded, and an order passed beyond the resulting extended deadline is time-barred.

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