1987 (1) TMI 10

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..... missioner out of Rs. 7 lakhs being the addition made by the Income-tax Officer for the assessment year under consideration ? " Question No.1 has been referred at the instance of the assessee and question No. 2 at the instance of the Revenue. The assessment for the year 1974-75 was completed by the Income-tax Officer under section 143(3) read with section 144B of the Income-tax Act, 1961. The assessee's returns disclosed a total income of Rs. 69,119 for the relevant accounting year. Since the officer was of the view that an addition in excess of Rs.1 lakh would have to be made, a draft assessment order was issued to the assessee on March 15, 1976. The assessee filed objections on April 5, 1976. The draft order together with the objections .....

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..... d that, on the facts and circumstances of the case, no addition was justifiable. Accordingly, the Tribunal deleted the additions completely. Counsel for the assessee submits that the assessment completed on May 2, 1977 was invalid by reason of limitation. Counsel says that the original draft assessment order was superseded by a subsequent draft assessment order. The section does not contemplate more than one draft assessment order. The second order was, according to him, non est and the directions purported to have been issued on the second order were not directions contemplated by law. In the absence of any valid directions, the advantage of extension of time under Explanation 1(iv)) to section 153(3), would not be available to the Reve .....

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..... view, although wrongly referred to by all concerned as the second draft assessment order, there was only one draft order and that is the order dated March 15, 1976. It was on the basis of that order, directions were issued and the assessment made, all within time, if time is computed by recourse to Explanation 1(iv) to section 153(3). Accordingly, we are of the view that the assessment made on May 2, 1977 was perfectly valid. Question No. 1 is answered in favour of the Revenue and against the assessee. As regards the second question, we must at the outset point out that the finding is one of fact. The judicial Member of the Tribunal, with whom the Accountant Member agreed, stated that the computation made by the Income-tax Officer was d .....

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