COMMISSIONER OF INCOME TAX Vs. SALIQ RAM SOOD

JUDGEMENT

(1.) AT the instance of Revenue, following question has been referred for opinion of this Court by the Income -tax Appellate Tribunal, Delhi Bench "C", Delhi (in short, 'the Tribunal'), under S. 256(1) of the IT Act, 1961 (in short, the 'Act') : "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the provisions of S. 144B(1) are not applicable in the present case even though the income proposed by the ITO to be taxed exceeded by over Rs. 1 lac the income returned by the assessee - Dispute relates to the asst. year 1976 -77.

(2.) FACTUAL position, as indicated in the statement of the case, is as follows: Assessee is an individual, who derived income from two house properties, from proprietorship business run in the name of M/s S.R. Associates and share income from a partnership firm M/s United Traders. Return of income for the assessment year was filed on 14th July, 1976. Assessee declared his total income to be Rs. 51,930. A sum of Rs. 29,013 was declared to be his share income from the abovesaid partnership. During assessment. Income -tax Officer (in short 'ITO') received intimation from the officer assessing the said partnership firm that share income as allocated to assessee came to Rs. 1,10,426, and thus, share income from house properties and proprietary business, ITO was of the view that the declared income of Rs. 22,917 from the aforesaid two sources deserve to be raised to Rs. 1,02,830. That involved an addition of Rs. 79,913. According to ITO both the variations, namely, Rs. 81,473 in respect of shares income and Rs. 79,913 from two other sources were relevant for the purpose of working out the variations in terms of S. 144B(1) of the Act as the total came to Rs. 1,61,386, i.e., a figure exceeding Rs. 1 lac and he took recourse to S. 144B of the Act and forwarded to assessee a draft assessment order. Assessee filed objections, which is turn was forwarded by ITO to IAC. On receipt of IAC's directions, assessment was completed by order dt. 22nd Sept., 1979. Assessee preferred an appeal before the CIT(A). It was assessee's stand that S. 144B of the Act had no application to the facts of the case and, therefore, assessment made on 22nd Sept., 1979 was time -barred. In other words, assessee's stand was that the benefit of cl. (iv) of Expln. -1 below S. 153(3) had no application. Though CIT(A) granted relief on certain other heads, he did not accept assessee's stand about non - applicability of S. 144B of the Act. Matter was carried in further appeal before the Tribunal by assessee. The stand, as taken before CIT(A), was reiterated before the Tribunal. Accepting assessee's stand that for working out the variation in terms of s.144B(1) in share income was not relevant, Tribunal allowed the appeal. It was noted that assessee had no scope to raise any objection so far as variation in share income is concerned, and, therefore, the basic requirement of s. 144B was absent.

(3.) ON being moved for reference, the question, as set out above, has been referred for opinion of this Court.