2001 PLP 3397 (PTD)

‑‑‑‑Reassessment‑‑‑Limitation‑‑‑Extension of time‑‑‑Assessment‑‑‑Draft assessment order‑‑‑Procedure for draft order of assessment and forwarding to IAC for direction in cases where variation of income or loss returned exceeds prescribed amount‑‑‑Period of limitation extended by 180 days‑‑‑Applies also to reassessments‑‑‑Indian Income Tax Act, 1961, Ss.2(8), (40~, 143(3), 144B, 147 & 153, Expln. (1)(iv)‑‑‑[CIT v. Sundaram Spinning Mills (1997) 225 ITR 214 reversed]. From the decision of the Madras High Court [see (1997) 225 ITR 214] to the effect that the expression "assessment made under section 143(3)" used in section 144B of the Income Tax Act, 1961, did not cover a reassessment and that that expression was confined only to assessments made originally, and, therefore, the procedure prescribed under section 144B was not available for reassessments to be made under section 147, and that consequently, the extended time limit provided for in Explana tion (1)(iv) to section 153 was not available to the Department for reassessments made under section 147, the Department preferred an appeal to the Supreme Court: Held, reversing the decision of the Madras High Court, that the procedure prescribed by section 144B was not confined to assessments made under section 143 but was also applicable to assessments made under section 147 and the extended time limit provided in Explanation (1)(iv) to section 153(1) was available to reassessments to be made under section

147. Dalmia (R.) v. CIT (1999) 236 ITR 480 (SC) fol. CIT v. Sundaram Spinning Mills (1997) 225 ITR 214 reversed. M.L. Verma, Senior Advocate (S. Wasim A. Quadri and S.K. Dwivedi, Advocates with him) for Appellant. This is an appeal by the Revenue against the judgment and order of the High Court at Madras (see (1997) 225 ITR 214). The High Court answered in the affirmative and in favour of the assessee, the following question (page 215): "Whether, the Appellate Tribunal is correct and justified in law in holding that the expression 'an assessment' to be made under section 143(3) used in section 144B, is confined only to the assessment to be made under section 143 and does not cover reassessment to be made under section 147 of the Income‑tax Act with the consequence that the procedure prescribed under section 144B and extended time limit provided in the Explanation to section 153(1) is not available to reassessment to be made under section 147?" The identical issue was raised before this Court in the case of R. Dalmia v. CIT (1999) 236 ITR 480 and, following that judgment, the judgment and order of the High Court must be reversed and the question answered in the negative and in favour of the Revenue. Order on the appeal accordingly. No order as to costs. MBA./1029/FC Order accordingly