An assessment order passed after Section 153’s statutory deadline is time-barred.

The petitioner, a company engaged in manufacturing encapsulation films and packaging products, filed its return for A.Y. 2022–23 on 22 September 2022, declaring a loss.

Following scrutiny proceedings, the Revenue passed an assessment order on 24 March 2025, making an addition of ₹29.72 crore for unsecured loans received from the petitioner’s directors.

The petitioner challenged the order as time-barred under Section 153 of the Income-tax Act, 1961. The Revenue’s affidavit acknowledged that the statutory deadline for the assessment order was 31 March 2024.

Whether the assessment order for A.Y. 2022–23, passed on 24 March 2025, was barred by limitation under Section 153 of the Income-tax Act, 1961.

Whether the time-barred assessment order was liable to be quashed.

Section 153(1) of the Income-tax Act, 1961 prescribes the period within which an assessment order under Sections 143 or 144 must be made.

For an assessment year commencing on or after 1 April 2022, the provision, as reproduced by the Court, substitutes “twelve months” for “twenty-one months”.

Applying that period to A.Y. 2022–23, the Court treated 31 March 2024 as the deadline for passing the assessment order.

The assessment order was passed on 24 March 2025, whereas the statutory deadline was 31 March 2024.

The Revenue did not dispute either date or the limitation consequence in its submissions and affidavit.

The Court therefore concluded that the assessment order had been made after expiry of the period prescribed by Section 153 and was time-barred.

It quashed and set aside the order and allowed the petition.