COMMISSIONER OF Income Tax vs BEAT ALL SPORTS.

N. K. AGRAWAL, J. :

The following question has been referred to this Court by the Tribunal under s. 256(1) of the IT Act, 1961 (for short "the Act") :

"Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the reference made under s. 144B of the IT Act, 1961, was bad in law and is barred by limitation ?"

The assessee filed return for the asst. yr. 1980-81, declaring an income of Rs. 4,90,000. The AO proposed variation in the income of the assessee for more than Rs. 1,00,000 and he, therefore, forwarded the draft of the proposed assessment order to the assessee on 14th March, 1983 under s. 144B(1) of the Act. Objections were filed by the assessee on 21st March, 1983 whereupon the ITO forwarded the objections together with the copy of the draft assessment order to the IAC for directions on 22nd March, 1983 under s. 144B(4) of the Act. Directions were received from the IAC on 5th September, 1983. Assessment was framed by the ITO on an income of Rs. 6,01,771 on 14th September, 1983. The assessee raised a plea in appeal, filed before the CIT against the order, on the ground that s. 144B was wrongly made applicable by the ITO inasmuch as the ITO and the IAC concerned had the concurrent jurisdiction under s. 125A of the Act. The ground so taken was, however, not decided by the CIT.

The Tribunal, in assessees second appeal, agreed with the assessee and annulled the assessment order on the ground that s. 144B had been wrongly applied by the ITO and, therefore, the extended period of limitation was not available for completing the assessment. It was held by the Tribunal that sub-s. (7) of s. 144B did not require the ITO to follow the procedure laid down in that section if the ITO had concurrent jurisdiction together with the IAC concerned.

A similar question has been examined by this Court in IT Ref. No. 63 of 1985 Commissioner of Income Tax Vs. Gheru Lal Bal Chand, and it has been held that sub-s. (7) of s. 144B was not attracted and the procedure, laid down in that section, was rightly followed as the ITO, having concurrent jurisdiction with the IAC under s. 125A of the Act, proposed to make variation in the income of the assessee exceeding Rs. 1,00,000.

Following the said view, the question is answered in the negative, i.e., in favour of the Department and against the assessee.