TMI Blog1987 (8) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... the period of limitation prescribed under section 153(2) was applicable to the reassessments ?" The material facts giving rise to this reference, briefly, are as follows The assessee is assessed in the status of a Hindu undivided family and the assessment years in question are 1971-72 to 1974-75. While framing the assessment for the assessment year 1975-76, the Income-tax Officer made an addition of Rs. 95,000 to the income of the assessee as income from undisclosed sources. On appeal, the Commissioner of Income-tax (Appeals) held that the amount of income evaded by the assessee was Rs. 1,20,000 ; that the whole of that evaded income was not referable to the assessment year 1975-76 but related to the assessment years beginning with 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Chaphekar, learned counsel for the assessee, contended that by virtue of Explanation 2 to section 153, reassessments made by the Incometax Officer for the assessment years 1971-72 to 1974-75 would be deemed to be assessments made in consequence of, or to give effect to, the direction contained in the order under section 250 passed in appeal, setting aside the assessments for the relevant assessment years and the provisions of sub-section (2A) of section 153 of the Act were, therefore, attracted. It was urged that as the assessments for the assessment years 1971-72 to 1974-75 were made after the expiry of two years from the end of the financial year 1978-79, in which the order under section 250 was passed in appeal, the assessments for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was set aside or cancelled under section 146 or on appeal, revision or reference, the Income-tax Officer could complete the fresh assessment any time because such a case was governed by sub-section (3) of section 153, which provides that the provisions of sub-sections (1) and (2) of section 153 would not apply to cases covered by section 153(3) of the Act. This resulted in delay and harassment to the assessee and hence, sub-section (2A) was inserted in section 153 by the Taxation Laws (Amendment) Act, 1970, introducing a time limit. By virtue of sub-section (2A) of section 153 of the Act, assessments covered by subsection (2A) of section 153 have to be completed within the time limit prescribed by that provision. It was not disputed before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esponding to section 153(3)(ii) of the Income-tax Act, 1961, should be such as the authority is empowered to give for the assessment year under appeal, revision or reference and that the authority could not give a finding in respect of the assessment relating to a year, which is not the subject-matter of the appeal, revision or reference. It is well settled that in interpreting a provision creating a legal fiction, the court, after ascertaining the purpose for which the fiction is created, has to assume all those facts and consequences, which are incidental or inevitable corollaries to the giving effect to the fiction. It, therefore, follows that to give full effect to the fiction introduced by Explanation 2 to section 153, and to the objec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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