section 153(3)(ii) of income tax act

Dear friend Juhi,

Section 153(3)(ii) reads as under:

         (ii)  where the assessment, reassessment or recomputation is made on the assessee or any person⁶⁷ in consequence of or to give effect to⁶⁷ any finding or direction⁶⁸ contained in an order under section 250, 254, 260, 262, 263, or 264 ⁶⁹[or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act] ;

It may be noted that under sections 250, 254 and 260, the CIT(A), tribunal or national tax tribunal respectively, may pass an order setting aside, modifying, etc. the order appealed against. So, it may happen that the CIT(A)  or tribunal or national tax tribunal may have recorded some fresh finding which was not in the knowledge of the AO and due to such finding the income of the assessee needs to be assessed or reassessed or recomputed. Since appeals at tribunal last for long periods, the exception in respect of time limit for assessments, etc. u/s 153(1), etc. given u/s 153(3)(ii) applies to such orders. Please note that CIT(A) and tribunal and NTT are the only fact finding appellate authorities. Therefore this provision does not specify HC or SC’s orders.

Similar is the case in respect of revision made by Commissioner u/s 263 or 264. In case the commissioner while proceeding to revise the order discovers some finding which was not to the knowledge of the AO at the time of making assessment than such finding must be given effect to by assessing, reassessing or recomputing the income of the assessee. Since, assessment, etc. has to be made after the revision order is made (which can be made within one year from the end of the financial year in which the original order was passed u/s 264 or two years in case of S. 263) the time limit is not applicable.

In respect of the lines bolded and coloured red, the appeal or reference can be made to the courts only on question of law. So in case of appeal or reference the no order can be given on the basis of fresh finding. However, suppose petitioner files a SLP, there may be a fresh finding that may be recorded by the court, which needs to be given effect to. Hence the exception to time limit provided u/s 153(1), etc. also applies to those orders.

Regards

Chintan

In respect of the lines bolded and coloured red, the appeal or reference can be made to the courts only on question of law. So in case of appeal or reference the no order can be given on the basis of fresh finding. However, suppose petitioner files a SLP, there may be a fresh finding that may be recorded by the court, which needs to be given effect to. Hence the exception to time limit provided u/s 153(1), etc. also applies to those orders.

Originally posted by : CA. Dashrath Maheshwari
	In respect of the lines bolded and coloured red, the appeal or reference can be made to the courts only on question of law. So in case of appeal or reference the no order can be given on the basis of fresh finding. However, suppose petitioner files a SLP, there may be a fresh finding that may be recorded by the court, which needs to be given effect to. Hence the exception to time limit provided u/s 153(1), etc. also applies to those orders.

 pls can u explain the line highlighted

hi @ juhi,

Fresh finding means, any more findings which was not subject matter of previous appeal.