1990 (9) TMI 128

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....t year 1981-82 is barred by limitation and hence invalid in law as the period commencing from the date on which the ITO forwarded the draft assessment order to the assessee and ending with the date on which the assessee received directions from the IAC has exceeded the specified period of 180 days. Certain facts in this regard may first be stated. The assessee is a limited company deriving income from manufacture and sale of pharmaceutical products. For the assessment year 1981-82, the ITO forwarded the draft assessment order to the IAC on 10-2-1984. The IAC's directions under section 144B were received by the ITO on 26-9-1984 and the order of assessment was passed by the ITO on the same date. It is now the case of the appellant that since ....

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....etion of assessment is section 153. The section as it stood for the relevant assessment years provided that no order of assessment shall be under section 143 or section 144 and at any time after the expiry of two years from the end of the assessment year in which the income was first assessable when such assessment year is an assessment year commencing on or after 1-10-1969. Thus, in the normal case, the assessment has to be completed within two years from the end of the assessment year from which the income is first assessable. Explanation 1 provides certain exceptions to this rule. It provides, inter alia, that while counting the periods of limitation for the purpose of section 153, certain periods will be excluded, e.g., the period durin....

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....ituation where an assessing officer may not be able to get directions from the IAC on the draft assessment order to enable him to pass the final order of assessment within the normal period of two years from the end of the assessment year. This clause only extends the normal period of two years by a further period of 180 days within which time the assessing officer is expected to refer the draft assessment order to the IAC and get his directions thereon and pass the final order of assessment. This section does not place any hindrance or constraint on the IAC's powers of issuing directions under section 144B. Being a clause in the Explanation below section 153, the contents of this clause have, of necessity, to be considered in the context o....