As per the query, it appears that ITAT has remanded the matter back to the Assessing Officer to decide afresh. Section 153 of the Income Tax Act prescribes time limit for completion of assessment and re-assessment. It is amended by the Finance Act 2017 with retrospective effect from 01.06.2016 and the provision regarding limitation for framing an assessment pursuance to any order passed, inter alia, u/s 254 of the Act was included under sub-section (3) of section 153 of the Act. Section 153(3) states as under:-
“153(3) – Notwithstanding anything contained in sub-section (1) or (2), an order of fresh assessment in pursuance of an order u/s 254 or section 263 or section 264, setting aside or canceling an assessment may be made at any time before the expiry of 9 months from the end of the financial year in which the order u/s 254 is received by the Pr. Chief Commissioner or Chief Commissioner or Pr. Commissioner or Commissioner or, as the case may be, the order u/s 263 or 264 is passed by the Pr. Commissioner or Commissioner……”
According to the said provision, if the Assessing Officer has passed the order beyond the prescribed period, then it is barred by limitation and shall have no effect. Accordingly, the original return filed by the assessee is to be accepted and if any refund is due to the assessee then the same shall be allowed alongwith interest as applicable under law. The judgement of Delhi High Court in the case of Aricent Technologies (Holdings) Ltd. v. Assistant Commissioner of Income Tax (2023) 458 ITR 578 (Del) may be relied upon.