COMMISSIONER OF INCOME TAX Vs. SUPREME CONSTRUCTIONS CO

JUDGEMENT

(1.) The question referred for our decision under section 256(1) of the Income-tax Act, 1961, is :

(2.) The assessee is a firm of contractors. The original assessment for the assessment year 1973-74 was completed on 22/12/1973, on a returned income of Rs. 5,37,780 and the assessment for the year 1974-75 was completed on 5/11/1975, on a returned income of Rs. 3,28,795. The assessments were reopened under section 147 on the basis of information received from the Judicial Commission of Inquiry headed by Shri Justice Alladi Kuppuswamy as regards certain tenders accepted by the assessee-company. Notice under section 148 was served on the assessee on 26/03/1978, and the last date for finalising the assessment was 26/03/1979, under section 153(2) (b). However, the Income-tax Officer made a draft assessment under section 144B and referred the matter to the Inspecting Assistant Commissioner who gave directions on 2/08/1979. The assessment was completed on 10/08/1979, following the directions issued by the Inspecting Assistant Commissioner. The case of the assessee was that section 144B not have been invoked for a reassessment under section 147 and, therefore, the assessment order dated 10/08/1979, was barred by time.

(3.) The Income-tax Appellate Tribunal accepted the contention of the assessee and, at the instance of the Revenue, referred the question stated above for our decision.