Chandrashekhar, J.

1. AT the instance of the revenue, the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad (hereinafter referred to as "the Tribunal") has referred to this court the following question of law :

"Whether, on the facts and in the circumstances of the case, the proceedings under Section 147(b) of the Income-tax Act, 1961, for the assessment year 1961-62 were barred by limitation and Sections 150(1) and 153(3), Explanation 2, did not save the limitation for issue of notice as provided under Section 149 of the Act ?"

2. THE material facts of the case are these : The assessee is a firm engaged in the manufacture of sugar. The original orders of assessment of its income for the assessment years 1960-61 and 1961-62 were made on March 31, 1964. For the assessment year 1960-61, the assessee had claimed deduction of Rs. 4,49,704 and Rs. 4,18,291 as expenditure on excise duty on stocks of sugar held at its factories on the last day of the relevant previous year. The assessee who had adopted the mercantile system of accounting had made provision in its accounts for payment of such excise duty. The Income-tax Officer had disallowed this claim for the assessment ye