The main legal point established in the judgment is the distinction between assessments under Section 143 and Section 147 of the Income-tax Act, 1961, and the interpretation of the provisions of Section 144B, emphasizing the exclusion of Section 147 from its applicability.

S.S.Sodhi, J.

1. The matter here pertains to the assessment year 1973-74.

2. On December 29, 1973, assessment under Section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), was framed on a total income of Rs. 4,081. Later, the Income-tax Officer learnt that the assessee had received gifts and advances from various persons whose financial position did not warrant these gifts and advances being made to the assessee. A notice under Section 147(b) read with Section 148 of the Act was consequently caused to be served upon the assessee on March 20, 1978. In the enquiry that followed, the Income-tax Officer formed an opinion that the addition to be made exceeded Rs. one lakh and it was, therefore, necessary to refer the draft assessment to the Inspecting Assistant Commissioner under Section 144B of the Act. The draft assessment so framed, i.e., under Section 144B of the Act, was then sent to the assessee on March 17, 1979, for inviting objections. These objections were then forwarded to the Inspecting Assistant Commissioner for his directions under Section 144B. These directions were received by the Income-tax Officer on September 4, 1979, on which date he proceeded to complete the assessment. The Tribunal, accepting the assessees contention, held the assessment made on September 4, 1979, to be barred by time and it consequently quashed it.

3. The Tribunal also negatived the plea of the Revenue that the draft assessment sent to the assessee on March 17, 1979, be taken to be a valid assessment.

4. It is in this background that the following questions have now been referred to this court for its opinion :

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the provisions contained in Section 144B did not apply to assessments made under Section 147 read with Section 148 ?

(2) Whether, on the facts and in the circumstance of the case, the Tribunal is right in law that reassessment completed on September 4, 1979, was barred by time ?

(3) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in holding that the unsigned draft assessment order communicated to the assessee inviting his objections on March 17, 1979, was not a valid assessment nor was it the assessment in issue in appeal before it ?"

(4) It will be seen that the main question that arises for consideration here is with regard to limitation. The time limit for completion of assessment and reassessment is provided by the provisions of Section 153 of the Act and in terms thereof, the assessment had to be made either before the expiry of four years from the end of the assessment year in which the income first became assessable or before the expiry of one year from the date of the service of the notice under Section 148, whichever date was later. In the present case, it will be seen that the notice under Section 148 was served upon the assessee on March 20, 1978, and the assessment was not completed till September 4, 1979, i.e., beyond the period of one year from that date, viz., the date of service of notice under Section 148 of the Act.

5. In order to bring the assessment within limitation, there was a twofold contention sought to be put forth on behalf of the Revenue : one that all assessments whether under Section 147(a) or (b) or under Section 143(3) could only be made under Section 143 and, second, that the draft assessment of March 17, 1979, be taken to be a valid assessment even if it was not signed. Neither of these contentions can, however, be sustained. There is, indeed, a clear distinction between the assessment under Section 143 and that under Section 147 read with Section 148. The assessment under Section 147 does not depend upon the authority of Section 143 for its completion. Section 147 itself authorises the Income-tax Officer to assess, reassess or recompute the loss or the depreciation allowance, as Section 143(3) ena