S. 153 : Exclusion of period during which assessment proceedings are stayed: Does not include the period during which the order transferring the case is stayed.

[CIT v. V. K. Ferro Alloys Industries P. Ltd., 299 ITR
191 (AP)]

For the A.Y. 1986-87, the assessee’s case was transferred
from Hyderabad to Visakhapatnam on 1-8-1988. On a writ petition filed by the
assessee, the High Court suspended the order of transfer till further orders.
Despite the interim order of the Court, the AO of Visakhapatnam completed the
assessment ex-parte. During the pendency of the appeal by the assessee,
the Court quashed the transfer order. As a result, the Commissioner (Appeals)
Visakhapatnam set aside the assessment order of the AO at Visakhapatnam with a
direction for de novo consideration by the appropriate Assessing
Authority. The case was transferred back to Hyderabad. Subsequently, the AO at
Hyderabad completed the assessment u/s.144. The assessee contended that the
assessment was barred by limitation. The Tribunal accepted the claim.

In the appeal preferred by the Revenue, the Revenue contended
that for computing the period of limitation, the provisions of Explanation 1(ii)
to S. 153(3) will have to be applied and the period during which the transfer
order was suspended by the Court has to be excluded.

The Andhra Pradesh High Court rejected the contention of the
Revenue and held as under :

However, the High Court upheld the validity of the assessment
order on the ground of limitation based on the direction of the Commissioner
(Appeals) Visakapatnam while setting aside the assessment.