Order Giving Effect to CIT(A) Directions Passed Beyond Limitation u/s 153(5) is a Nullity: Calcutta HC Quashes Income Tax Assessment [Read Order]

The Calcutta High Court has set aside an assessment order passed by the Assistant Commissioner ofIncome Tax after a delay of over three years. The Court held that the orders passed beyond the statutory limitation period prescribed under Section 153(5) of the Income Tax Act are "non est" and without jurisdiction.

Justice Smita Das De stated that the department cannot be allowed to line its pockets unjustly by retaining revenue due to such procedural failures.

It was a writ suit filed by Nomura Research Institute Financial Technologies India Pvt. The issue in the case was the validity of an order dated December 9, 2025 given by the AssessingOfficer (AO) to give effect to the Commissioner of Income Tax (Appeals) [CIT(A)] ruling dated August 16, 2022 for the Assessment Year 2017-18.

The CIT(A) had approved the assessee’s appeal in full. The Commissioner’s office received the order on August 31, 2022. As per Section 153(5) the AO is required to pass the effect order within a period of three months from the end of the month in which the order is received. Thus the statutory deadline ended on November 30, 2022.

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The petitioner submitted that the impugned ruling was given after a delay of more than three years and was precluded by limitation and liable to be annulled. They demanded a return of Rs. 96,69,710 along with interest. The Revenue Department attributed the delay to "administrative restructuring of charges" but accepted that no application for extension of time under the proviso to Section 153(5) was lodged before the expiry of the necessary term.

The court stated that the facts were not in dispute and that the ruling was passed after a long gap beyond the statutory limit. The Court emphasised the established law that the period provided under Section 153(5) is mandatory. The giving-effect order shall not be passed within this period, the appellate order shall become final.

“This Court is of the opinion that the impugned order dated is nullity and is liable to be quashed and set aside,” the order said.

The Court directed the respondents to reimburse the amount of Rs. 96,69,710 with statutory interest under Section 244A from December 1, 2022 till the date of actual payment. The whole exercise was ordered to be finished within two months.

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