TMI Blog1989 (10) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment was reopened, the Income-tax Officer followed the procedure prescribed under section 144B of the Act as the intended additions to the returned income were more than Rs. 1 lakh. The assessee filed an appeal before the Commissioner of Income-tax (Appeals) and put forward the plea that the assessment is barred by limitation. It was stated that section 144B can be invoked only in the case of an assessment made under section 143(3) of the Act and it cannot be invoked while completing an assessment initiated in pursuance of section 147 of the Act. On this basis, it was pleaded that the extra time available under clause (iv) of the Explanation I to section 153 of the Act, for completing the assessment to comply with the procedure under section 144B of the Act was not available, and that in this view, the reassessment made on September 20, 1979 is barred. As the time available, for completing the assessment under section 153(2)(b) is four years from the end of the assessment year 1974-76, it necessitated the assessment to be made before March 31, 1979. But the reassessment was made only on September 20, 1979. It is on the above reasoning that the Commissioner of Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year). 143. Assessment. - . . (3) On the day specified in the notice issued under sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, (a) in a case where no assessment has been made under subsection (1), the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refundable to him on the basis of such assessment ; (b) in a case where an assessment has been made under subsection (1), if either such assessment has been objected to by the assessee by an application under clause (a) of sub-section (2) or the Assessing Officer is of opinion that suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er shall forward the draft order together with the objections to the Deputy Commissioner and the Deputy Commissioner shall, after considering the draft order and the objections and after going through (wherever necessary) the records relating to the draft order, issue, in respect of the matters covered by the objections, such directions as he thinks fit for the guidance of the Assessing Officer to enable him to complete the assessment Provided that no directions which are prejudicial to the assessee shall be issued under this sub-section before an opportunity is given to the assessee to be heard. (5) Every direction issued by the Deputy Commissioner under subsection (4) shall be binding on the Assessing Officer. (6) For the purposes of sub-section (1), the Board may, having regard to the proper and efficient management of the work of assessment, by order, fix, from time to time, such amount as it deems fit: Provided that different amounts may be fixed for different areas Provided further that the amount fixed under this sub-section shall, in no case, be less than twenty-five thousand rupees. (7) Nothing in this section shall apply to a case where a Deputy Commissioner e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal order of assessment should be passed in proceedings initiated under section 147 of the Act. It was also argued that proceedings initiated under section 147 of the Act are distinct and different and the assessment order passed thereon is also a separate and distinct one from the original assessment. Pursuing the logic, counsel contended that if that be so, a reference under section 144B of the Act is visualised only in the original assessment proceedings for which an order of assessment should be passed under section 143 of the Act. Since, in this case, the assessment was reopened under section 147 of the Act, the reference made-under section 144B of the Act is unauthorised. We see no force in this plea. We are not concerned in this case with the larger question canvassed which was the subject-matter in Kesava Reddiar's case [1989] 178 ITR 457 (Ker), referred to above. We are only concerned with the limited question as to whether section 143(3) or section 144 of the Act will apply in proceedings initiated under section 147 of the Act. As stated by the Judicial Committee, when once an assessment is reopened, the proceedings start de novo. It is settled law that as per the scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art afresh, and that the proceedings for assessment of that year will be pending and will continue until a final order of assessment is rendered. We are not called upon to decide in this case whether, by the issue of a notice for reopening, the previous assessment as such is set aside or only the previous underassessment alone is set aside. In this case, when the assessment is reopened, section 143(3) of the Act is attracted and since the intended addition to the returned income was more than one lakh rupees (during the relevant time) it behoved the Income-tax Officer to refer the matter under section 144B of the Act. The Income-tax Officer is mandated by section 144B of the Act to make such a reference. The Appellate Tribunal was justified in holding so. In the light of the above, we answer the question referred to us in the affirmative, against the assessee and in favour of the Revenue. It is common ground that if the reference under section 144B of the Act is legal, the assessment is made within the extended period under clause (iv) of the Explanation I to section 153 of the Act. The reassessment completed on September 20, 1979 is within the time allowed by law and not barred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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