COMMISSIONER OF INCOME TAX vs SAT PAL PANDIT and CO.

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 order made under s. 144B of the IT Act was

bad in law and the assessment made on 24th September, 1984, is barred by limitation ?

Return was filed by the assessee for the asst. yr. 1981-82, showing income of Rs. 1,35,550. The ITO proposed variation in the assessees

income exceeding Rs. 1,00,000 and, therefore, he proceeded under s. 144B of the Act. The draft of the assessment order was forwarded by the

ITO to the assessee under s. 144B(1) on 27th March, 1984. Objections were received from the assessee on 7th April, 1984. Copy of the draft

assessment order along with the objections was forwarded to the IAC and, thereafter, directions were received on 22nd September, 1984.

Assessment was made by the ITO on an income of Rs. 3,32,035 on 24th September, 1984.

The assessee challenged the assessment on the ground that the ITO wrongly followed the procedure laid down in s. 144B of the Act and,

therefore, the extended period of limitation was not available for completing the assessment. It was claimed that the ITO had concurrent

jurisdiction along with the IAC under s. 125A of the Act and, therefore, in the light of sub-s. (7) of s. 144B, the procedure laid down in s. 144B

was not required to be followed.

The Tribunal 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.