Section 153(6)(i) – Assessment Time-Limit When a Court Is Involved

Most taxpayers believe that once a notice comes, the department must finish assessment within a fixed period.
That belief is only partly true.

Yes, the Income Tax Act does prescribe time limits for assessment. But there is an entire set of exceptions that quietly expands these deadlines when the case enters a technical or referred stage. One of the strongest time-extending provisions is Section 153(6)(i). This section doesn’t exist to tax you separately. It exists to give the department more time when your case requires inputs that the Assessing Officer (AO) cannot decide alone — for example, valuation, international pricing, forensic verification, or technical opinion.

In simple words, if your case is referred out to a Transfer Pricing Officer (TPO), Valuation Officer (VO), or other authorities, the regular assessment time clock pauses. The department gets a legally sanctioned extension to finish assessment only after it receives the concerned report.

Taxpayers rarely check this section — until their assessment order arrives months after they believed the matter had closed. That’s when panic begins. The truth is, in most such cases, the order is not delayed by mistake. It is delayed by law.

Why Section 153(6)(i) Exists in the First Place

India’s tax assessments are no longer arithmetic verification exercises. They are evidence-driven inquiries. When a scrutinee case demands specialized determination — like fair market value, arm’s length pricing, land valuation, cross-border benchmarking, or foreign remittance legitimacy — the AO is not empowered to estimate or assume. He must refer the matter to a domain authority.

Now imagine the normal time limit for assessment ends on 31st December, but the valuation report comes on 28th December. No department, officer, or taxpayer can reasonably expect a complex reassessment to be concluded in 3 days. There would be no review, no rebuttal, no hearing, no order drafting — only haste and error. To avoid miscarriage of due process, the law activates Section 153(6)(i), which pauses the assessment timeline & resumes only after the report is received."

So technically, this section is not a tool to delay taxpayers — it is a safeguard that prevents premature, incomplete, or assumptive tax orders.

Also Read: Time Limit for Completion of Assessments, Reassessments, and Recomputation

How the Timeline Actually Works

Under the normal law, assessment must be completed within a defined period from the end of the financial year or from the date of notice (depending on the section involved — 143, 147, 148, etc.).

But Section 153(6)(i) overrides that deadline only when:

1. A reference is made to Transfer Pricing Officer (TPO) under Section 92CA,
2. Or to a Valuation Officer under Section 55A/142A,
3. Or to any authority, body, or court requiring factual determination,
4. And the AO is legally required to wait for that report before passing the final order.

Once the reference is made, the time limit freezes.
When the report is finally submitted, the AO is granted additional time (at least 60 days or more depending on facts) to conclude the assessment.

So if your assessment seems delayed, it may not be delay at all. It may be a lawfully extended proceeding.

Real World Example You’ll Relate To

A company sold immovable property for ₹8 crore. The stamp duty value was ₹12 crore.
During scrutiny, the AO suspected undervaluation & referred the case to the District Valuation Officer (DVO) under Section 142A.

The DVO took 9 months to submit the report.
The taxpayer assumed the case was time-barred because the normal 12-month assessment window had expired.

However, because Section 153(6)(i) applied, the assessment clock had been paused the day the reference was made. After receiving the valuation report, the AO lawfully gained 60 additional days to pass the final order.

• The taxpayer challenged the delay.
• The court rejected the argument.
• The extension was upheld.

Moral: Deadlines in referred assessments operate differently.

Common Triggers That Activate 153(6)(i)

Most cases fall into one of these categories:

• International transactions → Transfer Pricing referral (TPO)
• Share valuation disputes
• Property valuation mismatches
• Unexplained investment or capital introduction
• Cross-border royalties or service payments
• Business acquisition or slump sale valuations
• Intangible valuation (brand, goodwill, IP, technology)

If your case contains any of these, you must mentally switch from normal timeline mode to extended timeline mode.

Also Read: Section 153A: When a Tax Search Can Rewrite Your Past 6 Years of ITRs

Can the Department Keep Extending Forever?

No. Even Section 153(6)(i) is not unlimited. It doesn’t give open-ended authority. It only applies:

• Until the required report is received, and
• Additional statutory buffer time after receipt to complete assessment.

If there is no legitimate referral, or if the referral itself is invalid, or if the report is ignored, the extension can be challenged legally.

Your Rights as a Taxpayer During This Period

Even when timelines are extended, you retain the full right to:

✔ Receive a copy of the referred report
✔ File rebuttals & explanations
✔ Request a personal hearing
✔ Challenge valuation or benchmarking assumptions
✔ Appeal against the final order
✔ Seek rectification if factual errors exist

Extended timeline does not mean reduced rights.

How to Stay Preparation-Ready When 153(6)(i) Kicks In

• Track whether a formal reference order has been issued
• Ask for acknowledgement of referral
• Keep supporting documents valuation-ready
• Prepare independent technical opinions if necessary
• Maintain proof of transaction rationale, payment trails & agreements
• Never assume silence means case closure

Proactive taxpayers win more cases than reactive ones.

Common Myths vs The Truth

Also Read: Time Limit for Completion of Fresh Assessments

Final Take

Section 153(6)(i) is less about taxation & more about completion of justice in technical assessments. It exists so that tax liability is not based on guesswork but on verified, specialized determination.

If your case is under this section, it does not mean you are in trouble.
It means your case involves a layer of evaluation that the law demands must be done right — not rushed.

A Smarter Way to Handle It

If you or someone you advise is facing an extended assessment window, valuation proceedings, transfer pricing referral, or unfamiliar notices issuing deadline overrides, the key lies in document-backed representation, timeline intelligence, and procedural strategy.

And if you want experts who handle this daily — not theoretically — our team steps in right where assessments get complex.

Extended assessment? Pending valuation? Timeline confusion?
The right representation can change the outcome.
See how we solve referred tax assessments at Callmyca.com before your case becomes a story of notices, assumptions, & avoidable demand.