Judgment:
N. K. AGRAWAL, J. :
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') :
'Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the reference made under s. 144B of the IT Act was bad in law and the assessment made on 23rd September, 1983 is barred by limitation ?'
2. The assessee-company manufactured Gate Valves etc. Return was filed for the asst. yr. 1980-81, declaring income at Rs. 11,38,180. The ITO, proposed a variation in the income of the assessee exceeding Rs. 1,00,000 and, therefore, he proceeded under s. 144B of the Act. Draft of the assessment order was sent to the assessee on 28th March, 1983. After the objections were received, the same along with the draft assessment order were forwarded to the IAC. Directions from the IAC were received on 21st September, 1983. Assessment was framed by the ITO on an income of Rs. 19,76,556 on 23rd September, 1983.
3. 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.
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.
4. 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 September, 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.