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TMI Blog1980 (11) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... l was justified in setting aside the order passed by the Income-tax Officer and the Appellate Assistant Commissioner and directing the Income-tax Officer to frame a fresh assessment after duly complying with the provisions of section 144B of the Income-tax Act? " The relevant assessment year is 1973-74. The assessee returned an income of Rs. 2,83,873. The ITO assessed the total income at Rs. 6,97,136. As the amount of variations in the income returned exceeded rupees one lakh, the ITO followed the procedure under s. 144B. A draft of the proposed order of assessment was served on the assessee on 6th March, 1976. The assessee's objections were received by the ITO on 17th March, 1976. As the objections were not received within seven days, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, to such variation to the Income-tax Officer within seven days of the receipt by him of the draft order or within such further period not exceeding fifteen days as the Income-tax Officer may allow on an application made to him in this behalf. (3) If no objections are received within the period or the extended period aforesaid, or the assessee intimates to the Income-tax Officer the acceptance of the variation, the Income-tax Officer shall complete the assessment on the basis of the draft order. (4) If any objections are received, the Income-tax Officer shall forward the draft order together with the objections to the Inspecting Assistant Commissioner and the Inspecting Assistant Commissioner shall, after considering the draft order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period; and that as the draft order issued was defective, the assessment made was a nullity and the Tribunal could not direct the making of a fresh assessment. The issuance of a draft order as required by s. 144B is not necessary to clothe the ITO with jurisdiction to make the assessment. The ITO has jurisdiction to make the assessment under s. 143. Section 144B provides special procedure to be followed in cases where the variation in the income or the loss returned which is prejudicial to the a exceeds the amount fixed by the Board, i.e., Rs. 1 lakh. In such a case, a draft order is required to be served on the assessee and if the assessee takes objection within seven days, the ITO has to seek the directions of the IAC by forwarding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal income, the necessary material for which was already mentioned in the order. The defect in the draft order was, therefore, not such which could have in any way caused prejudice to the assessee. Indeed the assessee had no difficulty in filing its objections but as it did not do so within 7 days, the assessment order was made before the receipt of the objections by the ITO. The assessment order passed by the ITO in the instant case could not be said to be a nullity even though the draft order suffered from the defect that it did not contain the computation of total income. This is not a case where the ITO did not start the assessment proceedings within limitation or did not complete then within limitation. Any procedural defect in maki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the power makes the ultimate order passed in the exercise of the power invalid. A question of this nature has to be answered having regard to the relevant statutory provision, the object behind it and the deviation in the particular case from its strict compliance. We have already indicated that s. 144B is procedural provision and the object behind this section is to give a comprehensive opportunity in cases where the variations proposed by the ITO in the income returned are in excess of Rs. 1 lakh. If the draft order issued is capable of giving full opportunity to the assessee to meet the proposed variations, it cannot be said that the defect in the draft order makes the entire proceedings invalid. At any rate, no question of jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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