COMMISSIONER OF INCOME TAX Vs. GURDASMAL RAMNATH BANGA

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-firm derived income from cloth business. Return was filed for the asst. yr. 1980-81, declaring income at Rs. 68,710. The ITO proposed variation in the income of the assessee-firm exceeding Rs. 1,00,000 and, therefore, he followed the procedure laid down in s. 144B of the Act. A draft assessment order was sent to the assessee and objections were invited. Directions were received from the IAC and, thereafter, assessment was framed by the ITO on 9th August, 1983, on an income of Rs. 1,83,820.

(3.) The Tribunal agreed with the assessee and annulled the assessment order on the ground that s. 144B had been wrongly applied by the ITO and, therefore, the extended period of limitation was not available for completing the assessment. It was held by the Tribunal that sub-s. (7) of s. 144B did not require the ITO to follow the procedure laid down in that section if the ITO had concurrent jurisdiction together with the IAC concerned.