ITAT Quashes Assessment Order for Exceeding Statutory Deadline

The appellant, M/s. ACE Tyres (P) Ltd, challenged an assessment order passed under Section 143(3) of the Income-tax Act, 1961, for the Assessment Year 2022-23. The core of the dispute was a technical violation of the statutory timeline. Under the provisions of Section 153, the standard deadline for completing the assessment was March 31, 2024.

However, due to a delay in the investigation wing handing over seized records to the Assessing Officer (AO), a 144-day extension was applicable as per clause (xii) of Explanation 1 to Section 153. This pushed the final deadline to August 22, 2024. Despite this extension, the AO passed the final assessment order only on September 27, 2024.

Issue Before ITAT: Whether the assessment order passed by the AO on September 27, 2024, is legally sustainable or if it is “void ab initio” due to being barred by the statutory period of limitation.

Tribunal Held: The ITAT ruled in favor of the assessee and quashed the assessment order. The Tribunal performed a precise calculation of the limitation period: the original date of March 31, 2024, plus the 144 days lost during the transfer of documents from April 1, 2023, to August 22, 2023, resulted in a hard deadline of August 22, 2024. As the AO failed to pass the order by this date and instead issued it on September 27, 2024, the Bench held the order to be “clearly barred by limitation.”

The Tribunal reiterated that compliance with limitation periods is not a mere formality but a mandatory legal requirement, and any order passed beyond such time is non-existent in the eyes of the law.

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