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 30th August, 1983, is barred by limitation ?'
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.
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. 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.