COMMISSIONER OF INCOME TAX Vs. KASINKA TRADINGS

JUDGEMENT

(1.) 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") :

(2.) THE assessee derived income from the export and sale of hand tools and imported goods. Return was filed for the asst. yr. 1981-82, showing loss of Rs. 2,99,423. The ITO proposed variation in the assessee's income exceeding Rs. 1,00,000. He, therefore, proceeded under S. 144B of the Act. The draft of the assessment order was forwarded by the ITO to the assessee on 14th March, 1984. Objections were received and were forwarded to the IAC and, thereafter, directions were received on 6th Sept., 1984. Assessment was made by the ITO on an income of Rs. 2,95,859 on 22nd Sept., 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.

(3.) A similar question has been examined by this Court in IT Ref. No. 63 of 1985 -CIT vs. Gheru Lal Bal Chand decided on 25th Sept., 1997 [reported at (1998) 144 CTR (P&H) 228] 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.