Law:

Section:

Section 153(1)(a)(i ) of the income-tax act, 1961-Assessment-Time limit for completion of-For assessment year 1963-64, ito made assessment on 16-3-1968-Relevant demand notice dated 20-3-1968 was issued by ito on 30-3-1968 and served on assessee on 13-4-1968-Whether, assessment was completed on 16-3-1968 and as such was not barred by limitation-Held, on facis, yes Words and phrases-'Order of assessment' in section 153(1) of the income-tax act, 1961 Facts The ITO made the assessment of the assessee for the assessment year 1963-64 on 16-3-1968. A demand notice dated 20-3-1968, in respect of that assessment was issued by the ITO on 30-3-1968 and served on the assessee on 13-4-1968. The assessee filed an appeal against the assessment, contending that it was barred by time under section 153, as he had received the demand notice on 13-4-1968 accompanied by an undated assessment order. The AAC repelled the contention, holding that the assessment order was passed before 31-3-1968. On further appeal, the Tribunal held that the assessment was completed by the ITO on 16-3-1968 and was entered into the register in March 1968. It further held that the demand notice was also issued on 30-3-1968. Accordingly, it upheld the order of the AAC. On reference : Held On reading the provisions of section 153, it is clear that the assessment order should be passed within four years from the end of the relevant assessment year, when the assessment pertains to an assessment year commencing on or before 1-4-1967. In the instant case, the relevant assessment year ended on 31-3-1964. The assessment order should, therefore, have been passed before 31-3-1968. Having regard to the facts and findings recorded by the Tribunal, it had to be accepted that the ITO had passed the relevant assessment order on 16-3-1968. The ITO, thus, passed that order fifteen days before the deadline. Section 153 requires an ITO to pass an order of assessment within the period prescribed in the Act. It does not require that the demand notice should also be issued within that period. The words 'order of assessment' cannot be construed so as to include a demand notice as well. The demand notice does not form part of…

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