Tax Act Proviso Extends AO Assessment Period to One Year if Application Withdrawn Before Settlement Commission

The 4th Proviso to Section 153 of the Income Tax Act specifies that if an assessee withdraws an application before the settlement commission under Section 245M(1), the period of limitation for the Assessing Officer (AO) to make an assessment, reassessment, or recomputation shall be at least one year after excluding the period under Section 153(5). If the remaining period is less than a year, it is extended to one year. The 5th Proviso applies this rule to determine the limitation period under Sections 149, 154, and 155, and for calculating interest under Section 244A.