AJIT K.SENGUPTA, J. - (1.) IN this reference under S. 256(1) of the IT Act, 1961 for the asst. yrs. 1975-76 and 1976-77, the following question of law has been referred to this Court. "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the assessment made without making reference to the IAC under S. 144B were not void in law ?"
(2.) THE facts shortly stated are that the assessee is a partner in the firm of Durga Dosiery having one-third share. The assessee's premises were searched on 20th Jan., 1976 and certain books of account and other documents were seized. On a scrutiny of the seized books of account the ITO came to the conclusion that the assessee had not disclosed all his transactions in his books of account. The seized books of account were not closed. On several dates it was found that the debits exceeded credits. The ITO held that the excess debits represented purchases of goods over and above what was recorded as sold. The assessee, however, did not admit that the seized books belonged to him and requested the IAC to give a direction that the excess of debits over credits amounting to Rs. 3,30,845 and Rs. 1,03,860 relating to the asst. yr. 1975-76 and 1976-77 should not be included in his income tax assessment. The IAC, however, directed that the said amounts should be included in the assessments of the assessee for the respective years. The matter went in appeal to the CIT(A). Before him a ground was taken that the ITO had not followed the proper procedure. As the addition to the income in teach of the years was above Rs. 1 lakh the assessee contended that the ITO should have made a reference to the IAC under S. 144B. If at all the addition was to be made it could be only under S. 144B and not under S. 144A, the latter procedure being open to the assessee only and could not apply to his detriment. The CIT(A) rejected the contention of the assessee that failure to follow the provision of S. 144B rendered the assessment null and void. He held that S. 144B is a procedural section and even if the ITO had not followed the procedure laid down in S. 144B the assessment were not void.
(3.) WHEN the matter came up in appeal before the Tribunal it dismissed the assessee's appeal with the following observation: "The learned representative for the assessee contended that the provision of S. 144B were mandatory and the ITO had no jurisdiction to pass an order where the addition to the income was more than a lakh of rupees without referring the same to the IAC. It is seen in this case that directions had been given by the IAC under S. 144A after hearing the assessee and the ITO was bound to follow the same. In any case even if a reference had to be made under S. 144B to the IAC, the absence of such a reference does not make the assessment void. At best it was an irregularity which was curable. This is the view taken by this Tribunal in ITA Nos. 4521 and 4522 (Cal)/77-78 dt. 31st March, 1979. We, therefore do not see any merit in the assessee's appeals and dismiss the same." ;