MUTHOOTTU CHARITABLE TRUST Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This Income Tax Reference is arising out of the order of the Income Tax Appellate Tribunal, Cochin Bench in I.T.A. 68 (Coch) 83, dated 28th February 1986 The assessment year in question is 1979-80, the relevant of accounting period of which ended on 31st March 1997. The assessee in this case is a charitable trust and at its instance the Tribunal has referred the following question of law for our answer.

(2.) The facts leading to the above reference can be briefly stated thus: For the aforesaid assessment year the assessee filed a return on 29th September 1979 showing the taxable income as nil. The Income Tax Officer as per the draft assessment order dated 19th February 1.982 proposed to assess the income at Rs. 2,08,400. The said draft assessment order was forwarded to the Inspecting Assistant Commissioner for approval. Subsequently the draft proposal was approved by the Inspecting Assistant Commissioner under S.144B of the Income Tax Act, 1961 (for short 'the Act') on 22nd June 1982. After receiving the approval the Income Tax Officer passed the assessment order on 1st July 1982 as originally proposed by him and demanded a sum of Rs. 1,67,797 towards income tax and surcharge. The assessee being aggrieved by the said order filed an appeal before the Commissioner of Income Tax (Appeals). The Commissioner however found that the assessment order passed by the Income Tax Officer was time barred. As against the said order, the Revenue filed an appeal before the Income Tax Appellate Tribunal and the Tribunal held in the appeal that there was a variation between the returned income at nil and the proposed addition of Rs. 2,08,400. Therefore, the Tribunal found that S.144B is applicable in the case. The Tribunal further held that clause (iv) of Explanation.1 to S.153 would be applicable and hence the assessment order was not barred by limitation. The Tribunal accordingly cancelled the order of the Commissioner of Income Tax (Appeals) and restored the order of the Income Tax Officer.

(3.) Learned counsel for the assessee contended that this is a case where there is no variation of income and hence sub-s.(1) of S.144B of the Act, as it stood then, will not apply. His further case is that the Department is not entitled to get the benefit of extended period of limitation provided in Explanation IV to S.1.53. He further points out that in the present case the time limit for completion of the assessment is controlled by S.153(1)(a) of the Act alone.