S.V.S. Securities vs Income Tax - Re-assessment Proceedings

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S.V.S. Securities Pvt.Ltd vs The Assistant Commissioner Of Income ... on 12 March, 2026

Author: B. P. Colabawalla

Bench: B. P. Colabawalla

2026:BHC-OS:6733-DB

                                                                 5-WP-3313-2025.doc

                  IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                      ORDINARY ORIGINAL CIVIL JURISDICTION
                             WRIT PETITION NO. 3313 OF 2025
       S.V.S. Securities Ltd.                                        .. Petitioner
                Versus
       The Assistant Commissioner of
       Income Tax - 4(2)(1) and Ors.                                 .. Respondents

            Adv. Devendra H. Jain, a/w Adv. Shashank A. Mehta, Adv.
            Saukhya D. Lakade, i/b Kashayap N. Chothani, for the Petitioner.

            Adv. Subir Kumar, a/w Adv. Niyanta Trivedi, for the Respondent.

                             CORAM: B. P. COLABAWALLA &
                                         FIRDOSH P. POONIWALLA, JJ. DATE:       MARCH 12, 2026

       P. C. 1.              Rule. Respondents waive service. With the consent of the parties,

       Rule is made returnable forthwith and heard finally.

1.          The   above   Writ   Petition    challenges     the   re-assessment
   
      proceedings initiated by issuance of notice dated 04.02.2020 under [section
   
      148](https://indiankanoon.org/doc/1888237/) of the Income Tax Act, 1961 (for short "the [IT Act](https://indiankanoon.org/doc/789969/) ") for the relevant
   
      Assessment Year 2015-16.
   

2.          Mr. Jain, the learned counsel appearing on behalf of the
   
      Petitioner, submits that the Petitioner is a company Assessee which had Page 1 of 23 MARCH 12, 2026
      Darshan Patil
                                                     5-WP-3313-2025.doc
   

furnished the Return of Income for the relevant Assessment Year 2015-16 by

declaring total income of Rs. 3,64,55,020/-.

1. Regular assessment proceedings were undertaken, and an order

of assessment under Section 143(3) was passed on 28.12.2017.

1. Thereafter, Respondent No.1 issued the impugned notice dated

04.02.2020 under Section 148 of the IT Act seeking to reopen the assessment

for the relevant Assessment Year 2015-16. The Petitioner furnished the

Return of Income in response to the said notice, following which notice under Section 143(2) and other notices under Section 142(1) were issued by

Respondent No.1.

1. The Petitioner filed objections against the said re-opening

proceedings vide its submission dated 23.03.2021 and the said objections

were disposed vide order dated 29.07.2021.

1. The Petitioner then approached this Court by filing Writ Petition

[bearing Writ Petition No. 2977 of 2021] challenging the validity of the notice

issued under Section 148 and also the order disposing objections, on several

grounds.

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1. This Court disposed of the said Writ Petition vide its final order

dated 29.08.2023. The relevant part of the order is extracted below:-

"3 The matter is remanded to the Jurisdictional Assessing
Officer (JAO), who shall within one week from today make
available to petitioner reasons to believe as recorded in the
notice dated 4th February 2020 issued under Section 148 of the Income Tax Act, 1961 together with necessary
satisfaction obtained from the RANGE 4(2), Mumbai.
Within two weeks thereafter, petitioner is at liberty to file a
fresh reply or can rely on the reply already filed.
Thereafter, within four weeks, order on objections to be
passed and before passing any order, personal hearing
shall be given to petitioner, notice whereof shall be
communicated atleast five working days in advance. If the
JAO is going to rely on any order or judgment of any High
Court or Tribunal, then a list thereof shall be provided to
petitioner alongwith the notice of personal hearing so that
petitioner may be able to deal with/distinguish those
orders/judgments. Thereafter, the assessment order, if
any, to be passed after four weeks from the date of order of
objections.

4 Petition disposed.

5 We clarify that we have not made any observation on the
merits of the matter."
9. Consequent to the above, the copy of the reasons recorded were

provided to the Petitioner on 31.08.2023. The Petitioner furnished its

objections against the reopening of assessment before Respondent No.1 on

13.09.2023, however it was conveyed by Respondent No.1 that the same was

not visible on the e-filing portal. Hence, the Petitioner re-submitted the same

again on 25.09.2023. However, Respondent No. 1 still claimed that he could Page 3 of 23 MARCH 12, 2026
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not access it. Hence, the Petitioner physically submitted the said objections

before Respondent No.1 on 06.10.2023 and also sent the same via email.

Respondent No.1 then passed the order disposing of the objections of the

Petitioner on 21.12.2023 and issued notice under Section 142(1) on

25.01.2024.

1. The Petitioner has thereafter filed the present Writ Petition

challenging the re-assessment proceedings on several grounds.

1. Mr. Jain, the learned counsel appearing on behalf of the

Petitioner, submitted that without prejudice to the jurisdictional grounds

raised in the present Writ Petition, the re-assessment proceedings are

anyway now barred by limitation. It was submitted that the limitation period

to pass the re-assessment order pursuant to the provisions of Section 153 has

already elapsed. In support of this contention the following list of dates were

tabulated:

Sr Events Date
1 Notice issued under section 148 04.02.2020
2 Date of filing Writ Petition (1st round) [WP2977/2021] 20.08.2021
3 Stay granted by Hon'ble High Court 31.08.2021
4 General Limitation period to pass the Final order:
First proviso to section 153(2) viz. 12 months from the 31.03.2021 Page 4 of 23 MARCH 12, 2026
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However, further extended by TOLA [vide
notification no. 74/2021 dated 25.06.2021] 30.09.2021
5 Writ Petition (1st round) disposed of with
relevant directions as reproduced in paragraph 29.08.2023
8 above.

7 Exclusion period -

Explanation 1(ii) to section 153 728 days
[from 31.08.2021 to 29.08.2023]
8 Limitation period after considering exclusion period 28.09.2023
[Original limitation period (30.09.2021) + 728 days]

9 Date of disposing the objections to reopening 21.12.2023
11 Extension as per first proviso to Explanation 1 to 60 days section 153 12 Limitation period after considering the extended
period of 60 days from the date of disposing the 19.02.2024
objections to reopening

1. It is contended that applying the provisions of the first proviso to Section 153(2) read with first proviso to Explanation 1 to Section 153, the

limitation period/date by which the re-assessment order ought to have been

passed was 19.02.2024. It is now contended that since Respondent No.1 did

not pass the order of re-assessment by this limitation period (19.02.2024 ),

the re-assessment proceedings are already barred by limitation.

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1. Per contra, Mr. Subir Kumar, the learned counsel appearing on

behalf of the revenue contended that since the re-assessment proceedings

were in pursuance of the order of this court in Writ Petition No. 2977 of 2021

• the limitation period ought to be calculated pursuant to the provisions of

sub-section (6) of Section 153, which reads as under:

"(6) Nothing contained in sub-sections (1) , (1A) and (2)
shall apply to the following classes of assessments,
reassessments and recomputation which may, subject to
the provisions of sub-sections (3), (5) and (5A), be
completed-

(i) where the assessment, reassessment or
recomputation is made on the assessee or any
person in consequence of or to give effect to any
finding or direction contained in an order under section 250, section 254, section 260, section 262, section 263, or section 264 or in an order of any
court in a proceeding otherwise than by way of
appeal or reference under this Act, on or before the
expiry of twelve months from the end of the month
in which such order is received or passed by the
Principal Chief Commissioner or Chief
Commissioner or Principal Commissioner or
Commissioner, as the case may be; or

(ii) where, in the case of a firm, an assessment is
made on a partner of the firm in consequence of an
assessment made on the firm under section 147, on
or before the expiry of twelve months from the end
of the month in which the assessment order in the
case of the firm is passed."
It is submitted that pursuant to the above provisions, the limitation period is

still available.

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1. Mr. Jain, the learned counsel appearing on behalf of the

Petitioner, rebutted the above contention of the revenue on the ground that

for the purpose of applicability of Section 153(6) the pre-requisite is that

there must be "any finding or direction" contained in the specified

orders. In the present case, the order of this court dated 29.08.2023 in the

first round [Writ Petition No. 2977 of 2021], nowhere provides for any such

'finding or direction'. In support of this rebuttal, reliance was placed on the

decision of this Court in the case of [Wavy Construction LLP vs.

Assistant Commissioner of Income-tax](https://indiankanoon.org/doc/83476797/) [2025] 170 taxmann.com

174 (Bombay)/[2025] 473 ITR 1 (Bombay)[20-12-2024].

1. We have heard both the parties at length and have also perused

the records produced before us.

1. Undisputedly, for the purpose of applicability of the extended

limitation period as prescribed under Section 153(6)(i), the mandate is that

"...the assessment, reassessment or recomputation is made on the assessee

or any person in consequence of or to give effect to any finding or

direction contained in an order...". Thus, the extended limitation period as

provided under Section 153(6)(i) can be made available only if it is first

established that the principal order contains such 'finding' or 'directions'.

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1. An identical question arose before this court in the case of

Wavy Construction LLP vs. ACIT [2025] 473 ITR 1 (Bombay),

wherein during the first round of the Writ Petition, this court had passed the

following order (extract from paragraph 7 of the above decision):-

"1. Mr. Walve states that an affidavit of one Biju Thomas,
Assistant Commissioner of Income Tax sworn on
September 17, 2021 has been filed in compliance with the
order dated September 14, 2021. We have considered the
affidavit and we accept the explanation given therein.

1. The assessment order dated May 19, 2021 is hereby
   quashed and set aside. Naturally, consequential notices, if
   any, are also quashed and set aside.

2. Keeping open the rights and contentions of the parties,
   we pass the following order with the concurrence of the
   counsel.

(A) The impugned order dated November 25, 2019
(Exhibit 'P' to the petition) disposing the objection
raised against reopening of assessment under Section 147 of the Income Tax Act, 1961 (the 'Act') is
quashed and set aside.

(B) The matter is remanded to the concerned
authority to reconsider the objection dated May 6,
2019 and pass further orders. Should petitioner
wish to file any further submissions in response to
the letter dated April 23, 2019 giving reasons for
reopening assessment for AY 2012-13, petitioner
may do so within two weeks from today. No
extension will be granted.

(C) Should petitioner seek any clarification
regarding the figures which are mentioned in the
reasons for reopening, the concerned authority shall Page 8 of 23 MARCH 12, 2026
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provide the same within two weeks of receiving the
communication from petitioner.

(D) The concerned authority may further dispose of
the objection to the reopening of assessment after
giving a personal hearing to the petitioner as per
Rules prescribed.

1. We clarify that we have not made any observations on
   the merits of the case.

2. Mr. Walve states that in case of reopening upto the stage
   of disposal of objection, it remains with the jurisdictional
   Assessing Officer, and once it is disposed by the
   jurisdictional Assessing Officer, the matter goes to Faceless
   Scheme for further assessment. Statement accepted.

3. Writ Petition disposed."

4.         After the above order, the Assessing Officer undertook the
   

exercise of re-assessment proceedings and passed the final re-assessment

order on 28.09.2022. The Petitioner in that case then approached this court

contending that the order of assessment was barred by limitation as provided

under Section 153(2) read with proviso below Explanation 1. In rebuttal, the

revenue contended that the extended limitation period under sub-section (6)

of Section 153 was available for passing the order of re-assessment.

1. This court negated the said contention by holding as under:-

"29. To appreciate the issue, as to what has been the
interpretation of this provision by the Court is required to Page 9 of 23 MARCH 12, 2026
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be seen. The Constitution Bench of Supreme Court in
Murlidhar Bhagwan Das (supra) was considering the
facts, where the respondent / assessee was assessed to
income-tax under Section 23(4) of the IT Act for the
assessment year 1949-50, on the ground that the notice
issued under sub-section (2) and (4) of Section 22 of the IT
Act had not been complied with. On 27 September 1955, the
said assessment was cancelled under Section 27 of the IT
Act, but before the said cancellation, it was found that an
interest income of Rs. 88,737/- received by the assessee in
discharge of the debts due from third parties had escaped
assessment as the assessee failed to disclose the same. The
Income-tax Officer issued a notice under Section 34 (1) (a) of the IT Act for the assessment year 1949-50 on the
ground that such income had escaped assessment. After the
assessment of that year was set aside under Section 27 of
the Act, the Income-tax Officer, ignoring the notice issued
by him under Section 34 (1)(a) of the Act, included that
amount in the fresh assessment made by him. The assessee
preferred an appeal against that order which was disposed
of by an order passed by the Appellate Assistant
Commissioner on 4 December 1957, in which he held that
such income was received by the assessee in the previous
accounting year and, therefore, directed that the sum
objected should be deleted from the assessment for the year
ending 1949-50 and included in the assessment for the year
ending 1948-49. Pursuant to the said direction issued by
the Appellate Assistant Commissioner, the Income-tax
Officer initiated proceedings under Section 34(1) of the Act
in respect of the assessment year 1948-49. The notice
issued under such section was served on the respondent on
5 December 1957. The assessee filed a petition under Article
226 of the Constitution in the High Court of Judicature at
Allahabad praying for quashing of the proceedings,
mainly on the ground that the proceedings were initiated
beyond the time prescribed by Section 34 of the Act. The
High Court accepted the contention and quashed the
proceedings initiated by the Income-tax Officer. It is
assailing such orders passed by the High Court, the
proceedings reached the Supreme Court. In such context,
the Constitution Bench of the Supreme Court examined as
to what is the true meaning of the terms of the second
proviso to Section 34(3) of the Act, which is quite similar to
the provisions of Clause (i) of sub-section (6) of Section 153 of the IT Act. The second proviso to Section 34(3) of the IT
Act which fell for consideration of the Supreme Court and Page 10 of 23 MARCH 12, 2026
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as extracted in the report, needs to be noted which reads
thus:

"Provided further that nothing in this section limiting
the time within which any action may be taken, or any
order, assessment or re- assessment may be made, shall
apply to a re-assessment made under Section 27 or to
an assessment or re-assessment made on the assessee
or any person in consequence of or to give effect to any
finding or direction contained in an order under Section 31, Section 33, Section 33A, Section 33B, Section
66 or Section 66A."
30. In the context of the facts in hand, the expression
"direction" and "in consequence of" or "to give effect to" are
the key words which are common expressions used in the
second proviso to Section 34(3) of the IT Act, as it stood at
the relevant time, and presently as falling under clause (i)
of subsection (6) of Section 153 of the IT Act. The Supreme
Court in interpreting the said expressions held that the
expression "finding" has not been defined in the IT At.
Referring to Order XX Rule 5 of the Code of Civil
Procedure, it was observed that a finding is, therefore, a
decision on an issue framed in a suit and a finding shall be
one which by its own force or in combination with findings
on other issues should lead to the decision of the suit itself.
It was observed that this was to say, the finding shall be
one which is necessary for the disposal of the suit. It was
held that a "finding", therefore, can only be that which is
necessary for the disposal of an appeal in respect of an
assessment of a particular year as the Appellate Assistant
Commissioner may hold in the facts, that the income
shown by the assessee is not the income for the relevant
year and thereby exclude that income from the assessment
of the year under appeal. In such situation, the finding in
that context is that the income does not belong to the
relevant year. It was observed that he may incidentally
find that the income belongs to another year, but it is not a
finding necessary for the disposal of an appeal in respect of
the year of assessment in question. Similarly, the
expression "direction" as used in the provision was
interpreted when the Court observed that the expression
"direction" cannot be construed in vacuum, but must be
collated to the directions which the Appellate Assistant Page 11 of 23 MARCH 12, 2026
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            Commissioner can give under [Section 31](https://indiankanoon.org/doc/677281/). It was observed
            that the expression "directions" in the proviso could only
            refer to the directions which the Appellate Assistant
            Commissioner or other Tribunals can issue, under the
            powers conferred on him or them under the respective
            sections. It was observed that therefore the expression
            "finding" and the expression "direction" can be given full
            meaning, namely, that the finding is a finding necessary
            for giving relief in respect of the assessment of the year in
            question and the "direction" is a direction which the
            appellate or revisional authority, as the case may be, is
            empowered to give under the provisions. The Court also
            considered the words "in consequence of or to give effect
            to" to observe that these words do not create any difficulty,
            for they have to be collated with, and cannot enlarge, the
            scope of the finding or direction under the proviso. It was
            observed that if the scope is limited in such manner, the
            said words also must be related to the scope of the findings
            and directions. The relevant observations of the Supreme
            Court are required to be noted which read thus:-

"Now, let us scrutinize the expressions on which strong
reliance is placed for the contrary conclusion. The
words relied upon are "section limiting the time", "any
person", "in consequence of or to give effect to any
finding or direction." Pointing out that before the
amendment the word "sub-section" was in the proviso
but it was replaced by the expression "section", it is
contended that this particular amendment will be otiose
if it is confined to the assessment year under appeal, for
it is said that under no circumstances the Income-tax
Officer would have to initiate proceedings for the said
year pursuant to an order made by an Appellate
Assistant Commissioner. This contention is obviously
untenable. The Appellate Assistant Commissioner or the
Appellate Tribunal may set aside the notice itself for
one reason or other and in that event the Income-tax
Officer may have to initiate the proceedings once again
in which case section 34(1) will Il be attracted. The
expression "finding or direction", the argument
proceeds, is wide enough to take in at any rate a
finding that is necessary to dispose of the appeal or
direction which Appellate Assistant Commissioners
have in practice been issuing in respect of assessments
of the years other than those before them in appeal.
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What does the expression "finding" in the proviso to
sub-section (3) of section 34 of the Act mean? "Finding"
has not been defined in the Income-tax Act. Order XX,
rule 5, of the Code of Civil Procedure reads:

"In suits in which issues have been framed, the court
shall state its finding or decision, with the reasons
therefore, upon each separate issue, unless the
finding upon any one or more of the issues is
sufficient for the decision of the suit."
Under this Order, a "finding" is, therefore, a decision on
an issue framed in a suit. The second part of the rule
shows that such a finding shall be one which by its own
force or in combination with findings on other issues
should lead to the decision of the suit itself. That is to
say, the finding shall be one which is necessary for the
disposal of the suit.

..........

..........

A "finding", therefore can be only that which is
necessary for the disposal of an appeal in respect of an
assessment of a particular year. The Appellate
Assistant Commissioner may hold, on the evidence, that
the income shown by the assessee is not the income for
the relevant year and thereby exclude that income from
the assessment of the year under appeal. The finding in
that context is that that income does not belong to the
relevant year. He may incidentally find that the income
belongs to another year, but that is not a finding
necessary for the disposal of an appeal in respect of the
year of pecht in question the expendreciof an in of must
be collated to the directions which the Appellate
Assistant Commissioner can give under section 31.
Under that section he can give directions, inter alia,
under section 31 (3) (b), (c) or (e) or section 31(4). The
expression "direction" in the proviso could only refer to
the directions which the Appellate Assistant
Commissioner or other tribunals can issue under the Page 13 of 23 MARCH 12, 2026
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               powers conferred on him or them under the respective
               sections. Therefore, the expression "finding" as well as
               the expression "direction" can be given full meaning
               namely, that the finding is finding necessary for giving
               relief in respect of the assessment of the year in
               question and the direction is a direction which the
               appellate or revisional authority, as the case may be, is
               empowered to give under the sections mentioned
               therein. The words "in consequence of or to give effect
               to" do not create any difficulty, for they have to be
               collated with, and cannot enlarge, the scope of the
               finding or direction under the proviso. If the scope is
               limited as aforesaid, the said words also must be
               related to the scope of the findings and directions."

(emphasis supplied)

1. In Rajinder Nath (supra) the expressions "finding" and "direction" fell for consideration of the Supreme Court as used in the provisions of Section 153(3)(ii) of the IT Act. The contention urged before the Court was whether there was any finding or direction within the meaning of Section 153(3)(ii) of the Act in the order passed by the Appellate Assistant Commissioner, in consequence of which or to give effect to which the assessments in question were made. In such context, the Supreme Court considered as to what could be the meaning required to be attributed to the expressions "finding" and "direction". It was held that the finding given in an appeal, revision or reference arising out of an assessment must be a finding necessary for the disposal of the particular case, that is to say, in respect of the particular assessee and in relation to the particular assessment year. As regards the expression "direction" in Section 153(3)(ii) of the IT Act, it was observed that it was well settled that it must be an express direction necessary for the disposal of the case before the authority or Court. It must also be a direction which the authority or Court is empowered to give while deciding the case before it. It was thus held that the expressions "finding" and "direction" in section 153(3)(ii) of the IT Act must be accordingly confined and more particularly considering the fact that section 153(3)(ii) was not a provision enlarging the jurisdiction of the authority or Court and it was a provision which merely raises the bar of limitation of making an assessment order under section 143 or section 144 or section 147. The relevant observations of the Court are required to be noted which read thus:

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1. "................The only contention is that there is no
   "finding" or "direction" within the meaning of section
   153(3) (ii) of the Act in the order of the Appellate
   Assistant Commissioner in consequence of which or to
   give effect to which the impugned assessments have
   been made.

2. The expressions "finding" and "direction" are
   limited in meaning. A finding given in an appeal,
   revision or reference arising out of an assessment must
   be a finding necessary for the disposal of the particular
   case, that is to say, in respect of the particular assessee
   and in relation to the particular assessment year. To be
   a necessary finding, it must be directly involved in the
   disposal of the case. It is possible in certain cases that in
   order to render a finding in respect of A, a finding in
   respect of B may be called for. For instance, where the
   facts show that the income can belong either to A or
   and to no one else, a finding that it belongs to B or does
   not belong to B would be determinative of the issue
   whether it can be taxed as A's income. A finding
   respecting B is intimately involved as a step in the
   process of reaching the ultimate finding respecting A.
   If, however, the finding as to A's liability can be directly
   arrived at without necessitating a finding in respect of
   B, then a finding made in respect of B is an incidental
   finding only. It is not a finding necessary for the
   disposal of the case pertaining to A. The same
   principles seem to apply when the question is whether
   the income under enquiry is taxable in the assessment
   year under consideration or any other assessment year.
   As regards the expression "direction" in section 153(3)

(ii) of the Act, it is now well settled that it must be an
express direction necessary for the disposal of the case
before the authority or court. It must also be a direction
which the authority or court is empowered to give while
deciding the case before it. The expressions "finding"
and "direction" in section 153(3) (ii) of the Act must be
accordingly confined. Section 153(3)(ii) is not a
provision enlarging the jurisdiction of the authority or
court. It is a provision which merely raises the bar of
limitation of making an assessment order under section
143 or section 144 or section 147: ITO v. Murlidhar
Bhagwan Das [1964][1964] [1964] 52 ITR 335 (SC) (SC)
(SC) and and N. K. T. Sivalingam Chettiar v. CIT.

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               [1967] 66 ITR 586 (SC) (SC). The question formulated
               by the Tribunal raises the point whether the Appellate
               Assistant Commissioner could convert the provisions of [section 147(1)](https://indiankanoon.org/doc/1837761/) into those of [section 153(3)(ii)](https://indiankanoon.org/doc/369923/) of the Act.
               In view of [S. 153(3)(ii)](https://indiankanoon.org/doc/369923/) dealing with limitation merely, it
               is not easy to appreciate the relevance or validity of the
               point."

34...........

1. It is also not possible to say that the order of the
   Appellate Assistant Commissioner contains a direction
   that the excess should be assessed in the hands of the co-
   owners. What is a "direction" for the purposes of section 153(3)(ii) of the Act has already been discussed.
   In any event, whatever else it may amount to, on its
   very terms the observation that the Income Tax Officer
   "is free to take action" to assess the excess in the hands
   of the co-owners cannot be described as a "direction". A
   direction by a statutory authority is in the nature of an
   order requiring positive compliance. When it is left to
   the option and discretion of the Income Tax Officer
   whether or not to take action it cannot, in our opinion,
   be described as a direction. Therefore, in our judgment
   the order of the Appellate Assistant Commissioner
   contains neither a finding nor a direction within the
   meaning of section 153(3)(ii) of the Income Tax Act in
   consequence of which or to give effect to which the
   impugned assessment proceedings can be said to have
   been taken."

2. Similar issue had fell for consideration of the Division
   Bench of the Karnataka High Court in Tally India (P.) Ltd.
   (supra) wherein the Court, in the context of the provisions
   of Section 153(1)(a) and Section 153(3)(ii) of the IT Act, was
   considering the contention as urged by the assessee that no
   direction / finding has been issued by the High Court in the
   order dated 7 March 2012 passed in the Writ Petition and
   when a direction was issued to remit the matter asking the
   assessee to appear before the Assessing Officer on a
   particular date did not tantamount to either issuing a
   direction / finding within the meaning of Section 153(3)(ii) of the IT Act. The Court applying the decisions of the
   Supreme Court in Murlidhar Bhagwan Das (supra) and Page 16 of 23 MARCH 12, 2026
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           Rajinder Nath supra) observed that these provisions are
           concerned only when a finding is given in an appeal,
           revision or reference are concerned, arising out of an
           assessment and it must be a finding necessary for disposal
           of a particular case and similarly, a direction must be an
           expressed direction necessary for disposal of the case
           before authority or Court and must also be a direction
           which the authority or Court is empowered to give while
           deciding a case before it. It was held that it was evident
           that the order dated 7 March 2012 passed by the High
           Court neither contained any finding nor any direction and
           accordingly, accepted the contention as urged on behalf of
           the assessee and held against the Revenue. The relevant
           observations as made by the Court which are similar to the
           facts in hand, are required to be noted which read thus:-
   

"7. A bench of this court by an order dated 07.03.2012
disposed of the writ petition viz., W.P.No.45313/2011 in
the following terms:

1. Having regard to the submission made by both the
   counsel, there is no option but to accept the writ
   petition, set aside the impugned order and remit the
   matter to the 1st respondent-Assessing Officer.

2. The petitioner shall take these proceedings as notice
   to them and shall appear before the 1st respondent on
   21st March 2012. The petitioners are not entitled for
   any fresh notice.

3. The Supreme Court in Rajinder Nath v. CIT, [1979]
   [1979] 2 Taxman 204/120 ITR 14 (SC) (SC) (SC); [1979]
   taxman 204 (SC) and ITO v Murlidhar Bhagwan Das
   [1964] [1964] [1964] 52 ITR 335 (SC) (SC) (SC), has held
   that a finding given in an appeal, revision or reference
   arising out of an assessment must be a finding
   necessary for disposal of a particular case. Similarly, a
   direction must be an expressed direction necessary for
   disposal of the case before the authority of court and
   must also be a direction which the authority of court is
   empowered to give while deciding a case before it.
   Thus, it is evident that the order dated March 7, 2012 Page 17 of 23 MARCH 12, 2026
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               passed by learned Single Judge of this court neither
               contains any finding nor any direction.

1. The proceedings were stayed for a period from
   December 8, 2011 to March 7, 2012, i.e., for a period of
   103 days and if the period of 103 days is added, and a
   period of 60 days as prescribed in the proviso to Section
   153(4) is added, the draft order ought to have been
   passed by the Assessing Officer upto May 6, 2012,
   whereas, in the instant case, the draft order has been
   passed on July 5, 2012 and therefore, the draft order is
   barred by limitation and no fault can be found with the
   finding of the tribunal."

2.         Consequent to the above discussion, this court concluded by
   

holding as under:-

"34. Thus, applying the principles of law as laid down in
the decisions in Murlidhar Bhagwan Das (supra), Rajinder
Nath (supra) and Tally India (P.) Ltd. (supra), it is clear
that the order dated 21 September 2021 passed by the
Division Bench (supra) does not contain any findings
necessary for disposal of the writ petition in a particular
manner, so as to govern the issues which would be decided
by the Assessing Officer. We may observe that in the
context in hand when the Revenue seeks to take recourse to
sub-section (6)(i) of Section 153 of the IT Act so as to avail
all the benefits of extended period as stipulated by such
provision, necessarily the Court is required to apply the
principles as enunciated in the decisions as noted by us
hereinabove, so as to make an exception from the
applicability of sub-sections (1), (1A) and (2) and subject to
the provisions of sub-sections (3), (5) and (5A) can be, only
in the event when such assessment, reassessment and
recomputation is being made qua the assessee "in
consequence of or to give effect to any finding or direction"
of any Court, as relevant in the present facts. Thus, the
words "in consequence of or to give effect" would be
required to be read in conjunction. As both these
expressions are complementary to each other namely that
such assessment, reassessment or recomputation is Page 18 of 23 MARCH 12, 2026
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            required to be made on the assessee or any person in
            consequence of or to give effect to any finding or direction
            contained in an order of the nature as specified in clause (i)
            of sub-section (6). Thus, the consequence needs to be
            created by such order and as a result of a finding or
            direction as may be contained in an order, as the provision
            envisages. It is but for natural, that any finding or
            direction needs to be taken to its logical conclusion and
            which is the sequel which would emanate from a finding or
            direction in the order. Thus, the intention of the legislature
            in providing for such expression is that an order which
            clause (i) of sub-section (6) talks about, is necessarily
            required to be an order which not only guides, but controls
            the course of such assessment, reassessment or
            recomputation, and not otherwise. In reaching to this
            conclusion, we are supported by what has been held by the
            Supreme Court in [Murlidhar Bhagwan Das](https://indiankanoon.org/doc/904994/) (supra) when
            the Supreme Court observed that the words "in
            consequence of or to give effect to" do not create any
            difficulty, for they have to be collated with, and cannot
            enlarge, the scope of the finding or direction under the
            proviso. It was further observed that if the scope is limited
            in such event, the said words also must be related to the
            scope of the findings and directions."

1. In the present case also, on perusal of paragraph 3 and 4 of the

order of this court dated 29.08.2023 (as reproduced in paragraph 8, above)

it can be observed that this Court held that:

(a) The matter was remanded back to the Jurisdictional
Assessing Officer;

(b) The said Officer shall provide the Petitioner with the copy of
reasons recorded within a period of one week.
Page 19 of 23 MARCH 12, 2026
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(c) The Petitioner was granted liberty to file objections to
reopening against such reasons recorded.

(d) Within 4 weeks thereafter, the said officer was then required
to pass the order disposing the objections.

(e) Further, it was stated that no order of assessment was to be
passed within a period of four weeks from such date of disposing
the objection.

The moot question before us is whether the above can constitute

a 'finding' or 'direction' of this court for the purpose of the applicability of section 153(6)(i).

1. In the present case of the Petitioner, this court, in its order dated

29.08.2023 merely laid down the time line within which Respondent No.1

was to provide the Petitioner with the copy of the reasons recorded, then the

time limit within which the Petitioner could file its objections, and then the

period by which Respondent No.1 should dispose of the objection raised by

the Petitioner. After this, Respondent No.1 could then pass the order of final

assessment, if any to be passed, but not anytime within four weeks from the

date of disposing the objections raised by the Petitioner to reopening of the

assessment.

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1. The above observations in the order of this Court cannot be

regarded as 'findings' necessary for disposal of the Writ Petition in a

particular manner, so as to govern the issues which would be decided by the

Assessing Officer. As held by this court in Wavy Construction LLP vs. ACIT

(supra), the Revenue can seek to take recourse to sub-section (6)(i) of Section 153 of the IT Act so as to avail all the benefits of the extended period

as stipulated by such provision, only in the event when such assessment,

reassessment and recomputation is being made qua the Assessee "in

consequence of or to give effect to any finding or direction" of any Court, as

relevant in the present facts. Thus, the words "in consequence of or to give

effect" would be required to be read in conjunction. As both these expressions

are complementary to each other, namely, that such assessment,

reassessment or recomputation is required to be made on the Assessee or any

person in consequence of or to give effect to any finding or direction

contained in an order of the nature as specified in clause (i) of sub-section

(6). Thus, the consequence needs to be created by such order and as a result

of a finding or direction as may be contained in an order, as the provision

envisages. It is but natural, that any finding or direction needs to be taken to

its logical conclusion and which is the sequel which would emanate from a

finding or direction in the order. Thus, the intention of the legislature in

providing for such expression is that an order which clause (i) of sub-section Page 21 of 23 MARCH 12, 2026
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(6) talks about, is necessarily required to be an order which not only guides,

but controls the course of such assessment, reassessment or recomputation,

and not otherwise. In fact, this court in its order dated 29.08.2023,

specifically in paragraph 5 thereof, stated "We clarify that we have not made

any observation on the merits of the matter." Thus, even otherwise the said

order dated 29.08.2023 of this court nowhere provided any 'findings' or

'directions' on the impugned case.

1. Thus, considering the above, we are not persuaded to accept the

contention of revenue that this case would fall within the provisions of section 153(6)(i). In fact, the order dated 29.08.2023 passed by this Court on

the petitioner's writ petition do not, in any manner, record a finding or issue

directions as understood in terms of clause (i) of sub-section(6) of Section

1. Accordingly, the revenue cannot avoid the consequence of limitation in

the present case, being triggered by the first proviso to Section 153(2) read

with first proviso to Explanation 1 to Section 153.

1. We therefore hold that applying the first proviso to [Section

153(2)](https://indiankanoon.org/doc/815232/) read with the first proviso to Explanation 1 to Section 153, the

limitation for the Assessing Officer to pass the Assessment Order had come to

an end on 19.02.2024. There is no Assessment Order passed till date because

there was a stay operating in the Writ Petition from 26.03.2024. However, Page 22 of 23 MARCH 12, 2026
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                  that makes little difference because the Assessment Order had to be passed

                  latest by 19.02.2024, when no stay was in operation.

1.         For the aforesaid reasons, the Petition succeeds. It is accordingly
   
                 allowed in terms of prayer clause (a). We further state that since the present
   
                 writ petition is disposed on the ground that the limitation period to pass the
   
                 final re-assessment order had already elapsed, we are not expressing any
   
                 opinion on the other jurisdictional grounds raised in the Writ Petition.
   

2.         Rule is made absolute in the aforesaid terms and the Writ
   
                 Petition is also disposed of in terms thereof. There shall be no orders as to
   
                 costs.
   

3.         This order will be digitally signed by the Private Secretary/
   
                 Personal Assistant of this Court. All concerned will act on production by fax
   
                 or email of a digitally signed copy of this order.
   

[FIRDOSH P. POONIWALLA, J.] [B. P. COLABAWALLA, J.] Page 23 of 23 MARCH 12, 2026
Darshan Patil

Signed by: Darshan Patil
Designation: PA To Honourable Judge
Date: 17/03/2026 18:33:48