The limitation period for completing assessments following a Tribunal's order is governed by Section 153(2A), mandating a one-year limit from the end of the financial year of the Tribunal's decision.

JUDGMENT :

K.V. ARAVIND, J.

1. Heard Sri E.I. Sanmathi, learned Senior Standing Counsel appearing for the appellants and Smt. Tanmayee Rajkumar, learned counsel appearing for the respondent.

2. This writ appeal, filed under Section 4 of the Karnataka High Court Act, 1961, by the Revenue, is directed against the order dated 17.08.2023 passed in W.P. No.13953/2020 (T-IT).

3. The facts, in brief, are that, the respondent–assessee, filed its return of income for the assessment year 2007–08. The Assessing Officer completed the assessment under Section 143(3) of the INCOME TAX ACT , 1961 (hereinafter referred to as the ‘Act’ for short) on 31.12.2009 assessing the tax payable. Aggrieved by the said assessment order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) [‘CIT(A)’], which came to be dismissed by order dated 06.10.2010. Being further aggrieved, the assessee preferred an appeal before the Income Tax Appellate Tribunal [‘the Tribunal’]. The Tribunal, by order dated 31.03.2015, remanded the matter to the Assessing Officer for de novo consideration. Thereafter, the respondent–assessee filed an application seeking refund of the taxes paid pursuant to the original assessment order, contending that no fresh assessment had been made pursuant to the Tribunal's remand. The Assessing Officer, by notice dated 06.11.2020, sought to provide an opportunity to the respondent–assessee to complete the assessment afresh in terms of the Tribunal’s directions. The respondent–assessee challenged the said notice in the writ petition, inter alia contending that the proceedings were time- barred. A further prayer was made to direct the Assessing Officer to refund the tax amount along with applicable interest.

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4. The learned Single Judge held that, in view of Section 153(7) of the Act, the notice dated 06.11.2020 was barred by limitation and accordingly quashed the same. The learned Single Judge further directed the Assessing Officer to consider the assessee’s claim for refund.

5. Sri E.I. Sanmathi, learned Senior Standing Counsel appearing for the appellants–Revenue, submits that the order of the Tribunal remanding the matter to the Assessing Officer for fresh consideration is dated 31.03.2015. As per clause (ii) of sub-section (3) of Section 153, as it stood prior to the coming into force of the Finance Act, 2016, the assessment, reassessment or recomputation could be made at any time. The amended sub-section (3) of Section 153 introduced by the Finance Act, 2016 is not applicable to the present case in view of sub-section (9) of the said provision. As per sub-section (9) of Section 153, inserted by the Finance Act, 2016, the assessment pursuant to an order of remand by the Tribunal shall be governed by the provisions as they stood immediately prior to the commencement of the Finance Act, 2016. Therefore, by virtue of sub-section (9), the amended provisions, including sub-section (7) of Section 153 brought in by the Finance Act, 2016, are inapplicable to the present case.

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6. Smt. Tanmayee Rajkumar, learned counsel appearing for the respondent–assessee, submits that although the order of remand by the Tribunal was passed prior to the coming into force of the Finance Act, 2016, the amended provisions of Section 153, as introduced by the Finance Act, 2016, would nevertheless govern the matter. Learned counsel further submits that sub-section (7) of Section 153 mandates that any order giving effect to a finding or direction referred to in sub- sections (5) or (6) shall be made on or before