Law:

Section:

Section 153 of the Income-tax Act, 1961 - Assessment - Time limit for completion of - Assessment year 1964-65 - Assessee-firm filed its return for period 15-10-1962 to 30-11-1963 i.e., for 13½ months - Thereafter it filed two returns for period 15-10-1962 to 30-12-1962 a period of 1½ months and other from 1-12-1962 to 30-11-1963 - However, ITO completed assessment filed for 13½ months - On appeal AAC held that power to assess an assessee for a period of more than 12 months was vested with Board and as that authority had not been delegated to ITO, he was not correct in determining previous year for more than 13½ months - He, therefore, cancelled assessment and directed ITO to make fresh assessments on returns submitted by assessee for two different periods - Thereafter, ITO made a fresh assessment on 16-2-1970 - Whether from perusal of AAC's order, it was clear that instant case was a case in which AAC set aside assessment and intended ITO to do a fresh assessment on lines indicated in his order - Held, yes - Whether, therefore, fresh assessment made by ITO was in consequence of finding recorded by AAC, and consequently, assessment made on 16-2-1970 was not time barred - Held, yes FACTS The assessee firm came into existence on 15-10-1962, but its books of account were closed for the first time on 30-11-1963, i.e., after a period of 13½ months from the date of commencement of the business. The firm filed a return for the assessment year 1964-65 on 7-6-1964, including therein its entire income for the period from 15-10-1962, to 30-11-1963. Thereafter the assessee proceeded to file two returns on 18-11-1964, one of those returns was for the period 15-10-1962, to 30-11-1962, a period of 1½ months, which related to the assessment year 1963-64. In the other return it declared the income in respect of the period from 1-12-1962, to 30-11-1963, which pertained the assessment year 1964-65. The ITO, however, appeared to have overlooked the returns filed by the assessee on 18-11-1964. On 24-12-1964, he completed the assessment for the assessment year 1964-65, and included therein the entire income of the period from 15-10-1962 to 30-11-1963. On appeal, the AAC held that…

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