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Issues involved:
The judgment addresses four questions referred by the Tribunal under section 256(1) of the Income-tax Act, 1961: 1. Whether section 144B can be invoked in an assessment under sections 147/148? 2. Was the assessment in the case time-barred under section 153(2)? 3. Did Explanation 1(iv) to section 153 apply to the case? 4. Was the Tribunal right in dismissing the appeal without considering the merits? Details of the Judgment: Issue 1: Section 144B in assessments under sections 147/148 The judgment discusses the obligation under section 144B to forward a draft assessment order to the assessee when making variations prejudicial to the assessee's income. It emphasizes the purpose of providing a forum for the assessee against proposed assessments. The court interprets the legislative intent behind excluding section 147 from the operation of section 144B, highlighting that section 147 is a machinery provision for assessing or reassessing income. The judgment cites relevant case law and committee recommendations to support its interpretation, ultimately answering question 1 in favor of the Revenue. Issue 2: Time-barred assessment under section 153(2) The judgment delves into the timeline of the assessment process, starting from the notice served under section 147(a)/148 to the final assessment order. It examines the conflicting interpretations regarding the time limit for completing the assessment and the application of section 144B in extending the time frame. The court ultimately sides with the Revenue's view, considering both the literal text and the spirit of section 144B, and rejects the assessee's argument that the assessment was time-barred. Issue 3: Application of Explanation 1(iv) to section 153 The judgment addresses whether Explanation 1(iv) to section 153 had any relevance to the facts of the case. It analyzes the provisions and their impact on the assessment process, particularly in relation to the time limit for completing assessments. The court's decision on question 1 renders this issue moot, as it is contingent on the interpretation of section 144B in assessments under sections 147/148. Issue 4: Tribunal's dismissal of the appeal The judgment briefly touches on the Tribunal's dismissal of the appeal without delving into the merits, which was one of the questions referred to the court. However, since the court's decision on question 1 resolves the matter, questions 2, 3, and 4 are deemed irrelevant. The judgment concludes by stating that no costs are awarded in the case. In summary, the High Court of Bombay analyzed the provisions of the Income-tax Act, 1961, particularly section 144B, in the context of assessments under sections 147/148. The judgment provides a detailed interpretation of the legal framework, relevant case law, and committee recommendations to address the issues raised by the Tribunal, ultimately ruling in favor of the Revenue on the applicability of section 144B in the assessment process.
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