Law: Income Tax Act, 1961

Section: 144,144(B)(1),153

Income-tax---Assessment---Limitation---Draft assessment order---Variation of income due to inclusion of share of income from firm among partners in their individual assessments---Period between date on which draft order was forwarded to assessee and date on which directions were given by Inspecting Assistant Commissioner was liable to be excluded---Indian Income Tax Act, 1961, Ss. 144B(1) and 153, Expln. 1 (iv). The assessees contended that the assessment made pursuant to the directions given by the Inspecting Assistant Commissioner was barred by limitation, and that the period between the date on which the draft order was forwarded to the assessee and the date on which directions were given by the Inspecting Assistant Commissioner was not liable to be excluded in computing the period of limitation in the assessee's case. It was submitted on behalf of the assessee that as the variation was consequent to the application of the statutory provisions providing for the inclusion of share of the income among the partners in their individual assessment the enlarged period of limitation under section 153, Explanation 1, clause (iv) of the Income Tax Act, 1961 was not available to the Revenue: Held, that section 144B of the Act opens with the non obstante clause. Irrespective of the reasons for the variations if the variation proposed to be made exceeds the amount fixed by the Board under section 144B, the Income-tax Officer is required to act in accordance with t]p requirement of section 144B. -Section 153 which deals with the time limit for completion of assessment and reassessment is clearly applicable to the assessment made after making a reference to the Inspecting Assistant Commissioner under section 144B. In a case where such reference is made as provided in Explanation 1(iv) the period specified therein is required to be excluded while computing the period of limitation. Therefore, the assessments. made were within the period of limitation and were valid. THIS JUDGMENT DELIVERED BY: R. JAYASIMHA BABU, J.---The common questions referred to us at the instance of the assessee, two partners of the firm, for the assessment year 1979-80 are as under: "(1) Whether the…

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