COMMISSIONER OF INCOME TAX Vs. KRISHNAN N

JUDGEMENT

(1.) The following question has been, at the instance of the revenue, referred to us by the Income Tax Appellate Tribunal, Cochin Bench:

(2.) Counsel for the revenue contends that in a case where reference has been validly made under S.144-B before assessment is completed, the period of limitation, prescribed under S.153(1)(a)(iii), for completion of the assessment is extended by reason of the exclusion, in computing that period, of the time specified under Explanation I(iv) to S.153. During such extended period, it is open to the Inspecting Assistant Commissioner to exercise his power under S.144-A and give such directions as be deems fit to the Income Tax Officer in regard to any matter connected with the assessment, even when such a matter does not figure in the draft order and the normal period prescribed by S.153(1) has expired. Counsel submits that by recourse to S.144-A, and in exercise of the suo motu power conferred by that Section, it is open to the Inspecting Assistant Commissioner to give any direction which be deems necessary to the Income Tax Officer, and the Officer is bound to carry out such a direction. Counsel further submits that the re-computation of the amounts as regards the four items on which the assessee raised no objections was an exercise of the suo motu power under S.144-A(1), and such exercise of power was not barred by limitation by reason of the extension of time in terms of Explanation l(iv) to S.153 consequent on the reference made under S.144-B.

(3.) Counsel for the assessee Shri. Sudheer Gopi, however, submits that the period of limitation prescribed under S.153(1)(a)(iii) is extended in terms of Explanation I only to the extent that the Income Tax Officer is authorised to make a reference under S.144-B. Such extended period cannot be availed of for any other purpose. The suo motu power under S.144-A can be exercised only within the normal period of two years prescribed by S.153(1)(a)(iii). Counsel further submits that, in any view, in regard to the four items on which the amounts were recomputed by the Inspecting Assistant Commissioner, there was no reference as the amounts in regard to these items had been varied by the Income Tax Officer in accordance with the submission of the assessee. In regard to such items, the Inspecting Assistant Commissioner, counsel says, was not entitled to make a re-computation, even if it was done with the concurrence of the assessee.