Commissioner of Income Tax vs J.M.P. Manufacturing Co.

Adarsh Kumar Goel, J.—Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, has referred following question of law for opinion of this Court, arising out of its common order dated 9-3-1994 in ITA Nos. 221 & 381 (Asr.)/1985 in respect of assessment year 1981-82:

Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the reference made u/s 144B of the Income Tax Act, 1961 was bad in law and is barred by limitation.

In respect of assessment year 1981-82, the assessee filed return on 23-5-1981. The assessment was completed on 8-8-1984 u/s 143(3)/144B(4) of the Income Tax Act, 1961 (''the Act''), which was beyond a period of two years from the end of financial year in question stipulated u/s 153 of the Act i.e., 31-3-1984. The Tribunal held that the order of the Assessing Officer was barred by limitation.

Learned Counsel for the revenue submits that identical question has been adjudicated upon by this Court in Commissioner of Income Tax Vs. Gheru Lal Bal Chand, and after referring to Explanation 1, Clause (iv) below Section 153, it was held that period up to 180 days from the date on which the draft assessment order is forwarded by the Income Tax Officer to the assessee up to the date on which directions are received is to be excluded. In the present case, the draft assessment order was prepared on 10-3-1984 and permission was received from the IAC on 3-8-1984, as noticed in the order of assessment. If this period is excluded, the period taken in obtaining permission being more than the period by which period intervened between the last date by which assessment was to be made and the date on which assessment was made. Accordingly, the assessment had to be treated within time.

In view of the above, the question is answered in favour of the revenue and against the assessee.

Reference is disposed of accordingly.