Law:

Section:

Section 147 read with section 256 of the Income-tax Act, 1961 - Income escaping assessment - Position prior to 1-4-1989 - Assessment years 1979-80 and 1980-81 - Tribunal set aside reassessment orders following its earlier order for assessment year 1977-78 - Tribunal had granted reference for said year which was pending before High Court - However for year under consideration Tribunal refused to grant reference without indicating any distinguishing features - Whether, on facts, Tribunal was to be directed to refer question of law as to whether Tribunal was legally correct in holding that ITO was not justified in initiating proceedings under section 147(b) - Held, yes FACTS The reassessment orders which were framed under section 147(b ) for the relevant assessment years were set aside by the Tribunal following its earlier order for the assessment year 1977-78. For the assessment year 1977-78, the Tribunal itself had granted a reference under the said provision. However, for the disputed years, reference had been refused on the ground that for in intervening year, namely, 1978-79, reference was refused by the Tribunal. On application under section 256(2) : HELD The Tribunal gave no separate reasoning except placing reliance on its earlier order for the assessment year 1977-78. It had already held in granting reference for that year that its decision did involve a question of law. When the reference had been granted for the basic year, the Tribunal could not take a different view for the years in question without indicating any distinguishing features. The decision of the Tribunal would stand or fall according to the result in the reference for the assessment year 1977-78 which was already pending before the High Court. Accordingly, the Tribunal was directed to refer the question of law as to whether Tribunal was legally correct in holding that the ITO was not justified in initiating proceedings under section 147(b). Note : The decision was in favour of revenue. JUDGMENT R.K. Gulati, J-These are two applications under section 256(2) of the Income-tax Act, 1961, which relate to the assessment years 1979-80 and 1980-81. We have heard learned counsel for the Revenue.…

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