Union Budget 2025-26 (Full) + Finance Bill, 2025

III. Excluding the period such as court stay etc. for calculating time limit to pass an order

Sub-section (7A) of section 206C of the Act provides that no order shall be made deeming a person to be an assessee in default for failure to collect the whole or any part of the tax from any person, after the expiry of six years from the end of the financial year in which tax was collectible or two years from the end of the financial year in which the correction statement is delivered under subsection (3B) of section 206C of the Act, whichever is later.

2. While computing the time limit under sub-section (7A) of section 206C of the Act, exclusion of the time period such as period for which proceedings were stayed by an order of any court, etc. is required to be provided.

3. It is proposed that sub-section (7A) of section 206C of the Act is to be amended to provide that relevant provisions of section 153 of the Act would apply to the time limit prescribed in sub-section (7A) of section 206C of the Act.

4. The amendment will take effect from the 1st day of April, 2025.

[Clause 67]

 

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Full Text:

Union Budget 2025-26 (Full) + Finance Bill, 2025

Limitation for deeming tax-collector default: exclusion of court stay periods aligns time-limit rules with reassessment principles. The amendment makes the limitation period for deeming a person an assessee in default for failure to collect tax subject to exclusion of periods such as court stays by applying the exclusion and suspension principles of the general reassessment framework to that time limit; the change is to take effect from the first day of April, 2025.