S. 153 provides that no assessment order shall be “made” u/s 143 after the expiry of two years from the end of the assessment year. There is no requirement that service must be effected before the expiry date. However, an order can be considered to have been made/ passed only when it leaves the control of the authority concerned. The mere signing of an order on the last date of limitation does not mean that it has been made/ passed if it is not handed over to the person who is authorized to serve it. In order to make the assessment order complete and effective, it should be issued so as to be beyond the control of the authority concerned for any possible change or modification and this should be done within the limitation period though actual service of the assessment order may be beyond that period. When an assessment order has been purported to have been passed within the prescribed period of limitation but the same is served on the assessee after unreasonable delay without being an explanation coming forward for such delay, in the absence of any explanation whatsoever it can safely be presumed that the order was not made on the date on which it purports to have been made and on the basis of such presumption it can be held that the order was passed after the expiry of limitation. On facts, the Department could not produce any evidence to prove that the assessment order was ready and dispatched on 31.12.2008. Thus, the assessee’s contention that the assessment order was not passed on 31.12.2008 has to be accepted and it has to be held that the order was barred by limitation (Kanu Bhai M. Patel (HUF) 334 ITR 25 (Guj) & other judgements followed)

The Proviso to s. 10A(1A) provides that “no deduction under this section shall be allowed to an assessee who does not furnish a return of his income on or before the due date specified u/s 139(1)”. The assessee’s argument that the said Proviso is merely directory and not mandatory is not acceptable. The Proviso is one of the several consequences (such as interest u/s 234A) that befall an assessee if he fails to file a ROI on the due date. As the other consequences for not filing the ROI on the due date are mandatory the consequence in the Proviso cannot be held to be directory (Shivanand Electronics 209 ITR 63 (Bom) & other judgements distinguished)

S. 153C is analogous to s. 158BD. In the context of s. 158BD, the Supreme Court held in Manish Maheshwari 289 ITR 341 that the recording of satisfaction by the AO that undisclosed income belongs to any person, other than the person who was searched, is a condition precedent. This principle applies to s. 153C as well. The burden is on the Revenue to show that the necessary ingredients of s. 153C have been complied with. On facts, there is material to show the AO in the case of the person searched was satisfied that any money, bullion, jewellery or other valuable articles or things or books accounts or documents seized or requisitioned belongs to someone else. There is nothing to show that such satisfaction was recorded by the AO. Even in the assessment order, no seized document or material has been referred to by the AO. Consequently, the conditions of s. 153C are not satisfied and the assessment order had to be quashed (Vijaybhai N. Chandrani 333 ITR 436 (Guj) and other judgements followed)

The assessee had made a clear disclosure in the ROI that it was claiming exemption under Article 11 for the interest income. This was accepted u/s 143(1). The assessment was sought to be reopened without there being any new material on record. In Telco Dadajee Dhackjee it was held by the Third Member that even in a case where only an intimation had been issued u/s 143(1)(a), it is essential that the AO should have before him tangible material justifying his reason to believe that income had escaped assessment. In the absence of such tangible material, the reassessment proceedings are invalid. Though in Praful Chunilal Patel 236 ITR 832 (Guj),, it was held that there is no necessity for the AO to have fresh facts coming to his notice subsequent to the original assessment to justify the reopening this view has not been subscribed to by the Full Bench in Kelvinator of India 256 ITR 1 (Del) which has been affirmed by the Supreme Court (320 ITR 561)