Assessment and Audit Limitation explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Chapters XII and XIII contain more than a dozen periods. Some bind the department, some bind the taxpayer, and they start from different events. This is all of them in one place.
The department's clocks: 90 days for a provisional assessment order, 6 months to finalise it (max 5 years), 5 years from the annual return due date for a s.62 or s.63 order, 15 working days notice before an audit, 3 months to complete it (max 9 months), 30 days to issue the ADT-02, and 90 + 90 days for a special audit report. The taxpayer's clocks: 15 days to reply to an ASMT-14, 30 days to reply to a scrutiny notice, 30 days to seek withdrawal of a summary assessment, 60 + 60 days to displace a s.62 order, and 15 working days to produce records under s.71.
The department's clocks
| Period | Provision | Runs from | If it runs out |
|---|---|---|---|
| 90 days to allow provisional assessment | s.60(1) | Receipt of the ASMT-01 request | The taxpayer may pursue the order; no deemed allowance |
| 6 months to finalise provisional assessment | s.60(3) | Date of the provisional order | Extendable by 6 months (Jt/Addl. Comm.) and 4 years (Commissioner) |
| 5 years for a s.62 order | s.62(1) | Due date under s.44 for the annual return | The assessment cannot be made |
| 5 years for a s.63 order | s.63 | Due date under s.44 for the annual return | The assessment cannot be made |
| 15 working days notice of audit | s.65(3) | Before the audit is conducted | The ADT-01 is defective; object before participating |
| 3 months to complete audit | s.65(4) | Commencement — see below | Extendable by 6 months by the Commissioner, with reasons recorded |
| 30 days to communicate findings | s.65(6) | Conclusion of the audit | A delayed ADT-02 is open to challenge |
| 90 days for a special audit report | s.66(2) | The ADT-03 direction | Extendable by a further 90 days |
| 15 days before a s.63 order | Rule 100(2) | The ASMT-14 notice | An order passed earlier breaches the s.63 proviso |
| 7 working days to release security | Rule 98(7) | Payment per the final assessment order | The bank guarantee stays outstanding; press for the ASMT-09 |
"Commencement" — the definition that governs the audit
Explanation to s.65(4): "commencement of audit" means the date on which the records and other documents, called for by the tax authorities, are made available by the registered person, or the actual institution of audit at the place of business, whichever is later.
Everything about the audit timetable hangs on this. It is why the acknowledged inventory of documents handed over is the most valuable piece of paper in the file — it is the only contemporaneous evidence of when the clock started.
The taxpayer's clocks
| Period | Provision | Runs from | If it runs out |
|---|---|---|---|
| 30 days to explain a scrutiny discrepancy | s.61(3) | The ASMT-10 notice | Officer may proceed under s.65, 66, 67, 73 or 74 |
| 15 days to reply to an ASMT-14 | Rule 100(2) | The notice | Best-judgment order under s.63 |
| 60 days to displace a s.62 order | s.62(2) | Service of the assessment order | See the proviso below |
| A further 60 days | Proviso to s.62(2), w.e.f. 01.10.2023 | Expiry of the first 60 days | Requires an additional late fee of ₹100 per day; after that, only appeal |
| 30 days to seek withdrawal of a summary assessment | s.64(2) | Receipt of the ASMT-16 order | Only appeal remains |
| 15 working days to produce records | s.71(2) | The date of the demand | Extendable by the person who demanded |
| 3 months to appeal | s.107(1) | Communication of the order | Extendable by 1 month on sufficient cause; then barred |
The two that are most often missed
Section 62(2) — 60 + 60. It is the cheapest remedy in the entire chapter: file the return and the best-judgment order is deemed withdrawn, with only interest under s.50(1) and late fee under s.47 surviving. It is missed because the order looks like a demand and gets sent to counsel rather than to the compliance team. Defending a best-judgment assessment →
Section 64(2) — 30 days from receipt. Short, and running from receipt, not from the date on the order. The ASMT-17 application is discretionary but costs nothing, and it routes the matter into the ordinary demand machinery with a full notice and hearing. Sections 63 and 64 →
What limitation does not do
It does not stop verification. The five-year bar in s.62 and s.63 limits assessment orders. An audit under s.65 has no outer limit expressed in years — its limits are on completion, not on the period audited, which Rule 101(1) leaves as "a financial year or part thereof or multiples thereof."
It does not stop a demand. The limitation that matters for money is in s.73, s.74 and s.74A, not in the audit provisions. An audit completed within time may still be followed by a notice that is itself out of time — and that is checked separately, against the demand provision for the relevant year.
It does not run in your favour by silence. No period in these chapters produces a deemed acceptance except s.62(2). Waiting is not a strategy.
Key takeaways
- The audit's three months runs from commencement, defined as the later of records being made available and the audit actually starting.
- Only the Commissioner may extend an audit, by up to six months, with recorded reasons.
- Special audit: 90 days, extendable by 90, and the taxpayer may apply for the extension.
- s.62(2) gives a 60 + 60 day deemed withdrawal — the cheapest remedy in the chapter.
- s.64(2) gives 30 days from receipt, and no more.
- Audit limitation and demand limitation are different; check the s.73/74/74A position separately.
Read next
- Section 65 Audit: ADT-01, the Three Months and the Extension
- Defending a Best-Judgment Assessment
- Sections 63 and 64: Unregistered Persons and Summary Assessment
- From Audit Finding to Demand: The Section 65(7) Handoff
Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act and Rules as amended to 31 March 2026 (ICAI Bare Law, 12th edition).