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Section 256 of the Income-tax Act, 1961 - Reference - Question arising out of Tribunal's order - As assessee had shown investment in house property for relevant assessment year, assessment was reopened under section 147(a) - Tribunal held that assessment under section 147(a) was not justified - Before Tribunal revenue justified assessment under section 147(b) as an alternative argument - Tribunal held that such contention could not be raised for first time but even on merits rejected such contention - Whether question of validity of assessment under section 147(b) arose out of Tribunal's order and could be referred - Held, no Facts The assessee commenced construction of a house in 1968 which continued up to the assessment year 1976-77. As the assessee had shown the construction investment only up to the assessment year 1973-74 the assessment for the assessment years 1974-75 and 1975-76 was reopened by the ITO by giving a notice under section 147(a) and reassessment was made. Before the Tribunal, an alternative argument was advanced by the revenue, for the first time, based on clause (b) of section 147. The Tribunal pointed out that such a contention could not be permitted for the first time at that stage. However, even on merits, this contention was rejected by the Tribunal. On application under section 256(2) for reference of the following question: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the provisions of section 147(b) could not be invoked in this case?" Held The assessee's case was one where the facts on which notice for reassessment was given, attracted not only clause (a) but clause (b) of section 147. The basis on which clause (b) was relied on by the revenue at belated stage was not even communicated to the assessee while reopening the assessment. So the question based on section 147(b) had not arisen out of the Tribunal's order. Accordingly, the application of the revenue under section 256(2) was rejected. R.N. Surolia for the Applicant. N.M. Ranka for the Respondent. ORDER Verma, CJ. - This is an application under section 256(2) of the Income-tax Act, 1961 ('the Act') by the revenue for a…

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