Commissioner of Income Tax vs Col. Nishan Singh

N.K. Sud, J.—At the instance of the Commissioner of Income Tax, Patiala, the following question of law has been referred to this court for its opinion by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short "the Tribunal") :

"Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal erred in law in annulling the assessment order for the assessment year 1974-75 made on January 28, 1983 ?"

The assessee filed a return u/s 139(4) of the Income Tax Act, 1961 (for short "the Act"), on September 8, 1975, for the assessment year 1974-75. A revised return was filed by him on March 31, 1977. The Income Tax Officer framed a best judgment assessment u/s 144 of the Act on March 14, 1978, on the basis of the return filed on March 31, 1977, by treating it as a revised return u/s 139(5) of the Act. On an application made by the assessee, the assessment u/s 144 of the Act made on March 14, 1978, was cancelled by the Income Tax Officer on March 20, 1978. Thereafter, the Income Tax Officer continued the assessment proceedings which culminated in the assessment order made u/s 143(3) of the Act on January 28, 1983.

The assessee filed an appeal before the Appellate Assistant Commissioner claiming that the assessment was barred by limitation. However, this plea did not find favour with the Appellate Assistant Commissioner. On further appeal, the Tribunal upheld the claim of the assessee that the assessment framed u/s 144 on March 14, 1978, was beyond the period of limitation. Consequently, the assessment made u/s 143(3) on January 28, 1983, after cancelling the assessment u/s 144 was also beyond limitation. Accordingly, the assessment was annulled as barred by time. The Tribunal rejected the contention raised on behalf of the Revenue that since notice u/s 271(1)(c) had been issued after the assessment was framed, the limitation stood extended to eight years in terms of Clause (b) of Section 153(1) of the Act. It was held that for availing of the extension under that provision, the Income Tax Officer is required to record a finding before the expiry of ordinary limitation that the case fell within the provisions of Section 271(1)(c). No such finding had been found to have been recorded in this case. For this purpose, the Tribunal relied on its earlier decision in the case of Jyoti Dhillon, the assessee''s daughter, in whose case the assessment was annulled under exactly similar circumstances.

Mr. R. P. Sawhney, learned counsel for the Revenue, very fairly conceded that the reference made by the Tribunal in the case of Jyoti Dhillon has since been decided by this court against the Revenue vide order dated April 24, 1997, in Commissioner of Income Tax Vs. Smt. Jyoti Dhillon, . Respectfully following the decision in Commissioner of Income Tax Vs. Smt. Jyoti Dhillon, , the question referred to us is answered in the negative, i.e., against the Revenue and in favour of the assessee.

Since no one has put in appearance on behalf of the assessee, we make no order as to costs.