R.K.Agrawal, J. - (1.) The Income-tax Appellate Tribunal, Allahabad, has referred the following question of law under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") for opinion to this court : "Whether on the facts and in the circumstances of the case the Appellate Tribunal was right in law in holding that the assessment made by the Income-tax Officer on the basis of the revised return was vitiated under law and the very order of assessment was liable to be quashed ?"
(2.) Briefly stated, the facts giving rise to the present reference are as follows : The reference relates to the assessment year 1974-75. The respondent-assessee is a co-operative society established with specific objects mentioned in paragraph 4 of the Pratiman Upvidhiyan. The main object of the society consisted of (i) sugarcane cultivation on specific lines ; (ii) obtaining profitable prices for sugarcane growers ; (iii) expeditious supply of sugar-cane to sugar mills, and (iv) expeditious payments by sugar mills. It derives its income from various sources. For the assessment year under consideration, the return of income under Section 139(1) was due on June 30, 1974 but it was filed on 6th July, 1974, showing Rs. 535 as income from house property and Rs. 255 as income from other sources, the total being Rs. 790. The respondent filed another return of income on September 27, 1974 showing the same total income as was disclosed in the original return though the income under the various heads was varied. It has claimed a sum of Rs. 1,18,203 to be exempt from tax as the said amount represented interest received from its members. The Assessing Officer did not grant exemption under Section 80P of the Act by holding that it was not carrying on the business of banking, providing credit facility to its members. However, after allowing the deduction of Rs. 20,000 under Section 80P(2)(c) of the Act the income from interest included in its income, was worked out at Rs. 98,204 and the total income was assessed at Rs. 1,03,419. The order was passed on July 27, 1977 after obtaining the approval of the Inspecting Assistant Commissioner under Section 144B of the Act. The first appeal preferred by the respondent was dismissed. In second appeal the Tribunal accepted the plea taken by the respondent that the return was revised under Section 139(5) of the Act and as per the provisions of law applicable for the year under consideration, the assessment having been completed beyond two years, was vitiated under law and consequently it quashed the assessment order.
(3.) We have heard Sri Dhananjaya Awasthi, learned standing counsel for the Revenue. Nobody has put in appearance on behalf of the respondent.;