The firm is engaged in the business of construction and real estate development. The primary issue involved was whether the reassessment proceedings initiated against the Assessee were time-barred due to the expiration of the limitation period as prescribed under Section 153 of the Income Tax Act, 1961.  The specific contention was whether the extended period of limitation under sub-section (6) of Section 153 applied in this case. 

The notice under Section 148 was issued on 29 March 2019, and the financial year ended on 31 March 2019. The nine-month period from 1 April 2019 ended on 31 December 2019. The reassessment proceedings were stayed by the High Court from 13 December 2019 to 21 September 2021. Excluding this period, the limitation period was extended to 20 November 2021. Since the remaining period after the exclusion was less than sixty days, the period of limitation was extended to sixty days, ending on 20 November 2021.

The assessee contended that the entire reassessment proceedings were time-barred.  The Assessee argued that the last date for passing the assessment order was 31 December 2019, and even after excluding the period during which the proceedings were stayed by the High Court, the limitation period expired on 20 November 2021. The assessee asserted that the impugned assessment order passed on 30 September 2022 was almost ten months after the limitation period had expired. 

The revenue contended that the order dated 21 September 2021 passed by the High Court constituted a direction to deal with the fresh objections. Therefore, the Revenue argued that the extended period of twelve months from the end of the month in which the court’s order was passed, as provided under sub-section (6) of Section 153, was applicable. According to the Revenue, the impugned assessment order passed on 30 September 2022 was within the prescribed limitation. 

The Hon’ble High Court found that the order dated 21 September 2021 passed by the Division Bench did not contain any findings or directions as understood in terms of clause (i) of sub-section (6) of Section 153 but was merely a remand back to consider the matter afresh. Therefore, the extended period of limitation under sub-section (6) of Section 153 did not apply. The Hon’ble High Court held that the limitation period for the Assessing Officer to pass the assessment order had ended on 20 November 2021, and the impugned assessment order passed on 30 September 2022 was time-barred. Consequently, the High Court quashed and set aside the impugned assessment order. (AY. 2012-13)