Law:

Section:

Section 153(1)(c), read with explanation 1(iv) thereto and Section 144B, of the income-tax act, 1961-Assessment-Time limit for completion of-For assessment year 1974-75, assessee filed voluntary return under section 139(4) on 4-3-1977 declaring net agricultural income of Rs. 1,23,830-ITO estimated agricultural income at Rs. 25,000 and Income from undisclosed sources at Rs. 1,11,829-He referred matter to iac under section 144B(1) and eventually completed assessment on 23-8-1978 on income of Rs. 1,36,829-Whether assessment order was time barred under section 153(1)(c ) inasmuch as section 144B(1) was not attracted to facts of case so that extended period of limitation prescribed in explanation 1(iv) to section 153(1)(c) was not available-Held, on facts, yes Facts The assessee-firm owned agricultural land. For the assessment year 1974-75, it filed a voluntary return on 4-3-1977 declaring a net agricultural income of Rs. 1,23,830. The ITO worked out the net agricultural income at Rs. 25,000. He also estimated income from undisclosed sources at Rs. 1,11,829 and referred the case to the IAC under section 144B. Eventually, the assessment was completed on 23-8-1978 on a total income of Rs. 1,36,829. In appeal, the Commissioner (Appeals) held that the agricultural income was Rs. 36,000 as against Rs. 25,000 worked out by the ITO. On further appeal, the Tribunal upheld the contention of the assessee that the assessment order of the ITO passed on 23-8-1978 was void as it was barred by limitation. On reference: Held Clearly, the assessee had returned a total income of Rs. 1,23,830 and the assessment was made on an income of Rs. 1,36,829. It may be that, having regard to the particulars of agricultural income, there was a variation exceeding the amount of Rs. 1,00,000. But in order that provisions of section 144B(1) may be attracted, it is necessary that variation in income or loss returned should exceed the amount fixed by the Board. The Tribunal was, therefore, justified in holding that the provisions of section 144B were not attracted and hence the extended period of limitation provided by clause (iv ) of Explanation 1 to section 153 was not available. As the assessment…

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