TMI Blog2001 (11) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to us for opinion. "1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding: (i) 'the direction to have an audit by an accountant in terms of section 142(2A) was without legal sanction? (ii) the proceedings initiated under section 132 of the Income-tax Act on February 23, 1984, had come to an end with the passing of the order under section 132(5) on May 7, 1984. Hence, from the records it is seen that no proceedings were pending before the Assessing Officer? (iii) 'it is only when some proceedings are pending the Assessing Officer is empowered to invoke the provisions of section 142(2A)?' 2. Whether, on the facts and in the circumstances of the case and in view of clause (iii) of E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not comply with that notice. But the assessee filed return on its own on July 9, 1985, admitting a total income of Rs.3,94,140. A provisional assessment under section 141A of the Act was made on November 5, 1986. The audit report was received on August 18, 1987. Further details were called for on August 26, 1987, and the assessment was completed on September 23, 1987. The assessee challenged the order of assessment before the Commissioner of Income-tax (Appeals) on various grounds. No ground to the effect that the assessment was barred by limitation was raised before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) partly allowed the appeal filed by the assessee. Feeling aggrieved the assessee chall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of the extended time under the proviso to section 153(1) of the Act. Taking this view, the Appellate Tribunal refused to go into the merits of the contentions raised by the assessee in its appeal against the decision of the Commissioner of Income-tax (Appeals). Following this finding, the Appellate Tribunal also dismissed the appeal filed by the Department by declining to go into the merits of that appeal. It is in this context that the questions of law referred to above have been referred for our opinion at the instance of the Revenue. The first question posed for our consideration is whether the Tribunal was justified in holding that making a reference under section 142(2A) of the Act by the Assessing Officer was without jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction or nullity. Therefore, we have no difficulty in disagreeing with the reasoning and conclusion of the Appellate Tribunal on this aspect. In fact, learned counsel for the assessee pitched his case on a different tract all together, Though the Appellate Tribunal had not considered that aspect, we thought that that was an aspect required to be considered in the circumstances of this case. Learned counsel for the assessee contended that the period of limitation in terms of section 153 of the Act commenced on April 1, 1985, and the Assessing Officer had a period of two years from that date to complete the assessment. To avail of the benefit of extension or exclusion of time under Explanation 1(iii) of section 153(3) of the Act, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, even though the Explanation does not indicate that it applies only in cases where the reference under section 142(2A) is made subsequent to commencement of time for completing the assessment under section 153 of the Act, when an order is made under section 142(2A) by the Assessing Officer, the period from that date till the submission of report by the assessee pursuant to that order would stand excluded in view of the Explanation. Here, therefore, the period from September 1, 1984, to August 18, 1987, on which date the report was made available would stand excluded. Even going by the case of the assessee, the time started to run from April 1, 1985. In any event therefore the period from April 1, 1985, till August 18, 1987, is liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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