TMI Blog1994 (11) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that the expenditure incurred by the assessee by way of export inspection fees, trade discount on sales, interest paid to the State Trading Corporation of India and freight and forwarding charges for export of goods, consular fees paid to consulate and wages to export godown workers do not qualify for weighted deduction under section 35B of the Income-tax Act, 1961 ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the claim for deduction of the incremental liability not provided for in the accounts is not an allowable deduction ? " Assessment year 1976-77 : " 4. Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the surtax liability for the relevant previous year is not an allowable deduction ? " The questions have been marked consecutively for the sake of convenience. Counsel for the parties are agreed that questions Nos. 2, 3 and 4 are covered by the decisions of this court and the Supreme Court. We, therefore, answer these questions as follows: Following the decision of this court in M. H. Daryani v. CIT [1993] 202 ITR 731, we answer question No. 2 in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Officer to complete the assessment by the application of section 144B of the Act. There is no controversy in this case about the fact that the assessment for the assessment year 1975-76 was not barred on the date (January 1, 1976) when section 144B was inserted. Even without section 144B, the assessment could have been completed till March 31, 1978. Section 144B, which was inserted with effect from January 1, 1976, provides that where in making an assessment under section 143(3), the Income-tax Officer proposes to make any variation in the income or loss returned which is prejudicial to the assessee and the amount of such variation exceeds the amount fixed by the Board, he shall forward a draft of the proposed order of assessment (draft order) to the assessee who may forward his objections, if any, to such variation to the Assessing Officer who in turn shall forward the draft order together with objections to the Deputy Commissioner and the Deputy Commissioner after considering the draft order and the objections and going through the records in respect of the matters covered by the objections, issue such directions as he thinks fit for the guidance of the Assessing Officer t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143, the Income-tax Officer proposes to make any variation in the income or loss returned which is prejudicial to the assessee and the amount of such variation exceeds the amount fixed by the Board under sub-section (6), the Income-tax Officer shall, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as 'the draft order') to the assessee. (2) On receipt of the draft order, the assessee may forward his objections, if any, to such variation to the Income-tax Officer within seven days of the receipt by him of the draft order or within such further period not exceeding fifteen days as the Income-tax Officer may allow on an application made to him in this behalf. (3) If no objections are received within the period or the extended period aforesaid, or the assessee intimates to the Income-tax Officer the acceptance of the variation, the Income-tax Officer shall complete the assessment on the basis of the draft order. (4) If any objections are received, the Income-tax Officer shall forward the draft order together with the objections to the Inspecting Assistant Commissioner and the Inspecting Assistant Commissioner shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observe that section 144B has an overriding effect over all other provisions contained in the Act. It starts with the non obstante clause "Notwithstanding anything contained in this Act". It mandates the Income-tax Officer to follow the procedure laid down therein in all cases where in an assessment to be made under sub-section (3) of section 143, he proposes to make any variation in the income or loss returned which is prejudicial to the assessee and such amount exceeds the amount fixed by the Board. From the phraseology of this section it is clear that on or after the coming into force of this section, it was incumbent on the part of the Income-tax Officer to comply with the requirements of this section in all assessments to be made thereafter under sub-section (3) of section 143 of the Act if the variation in the returned income exceeded the specified figure. Its applicability is not related to the assessment year. It applies to assessments to be made after the coming into force of this section, i.e., January 1, 1976. If the assessment for any assessment year was barred by limitation under section 153 of the Act, it cannot be made thereafter by taking resort to this section or a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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