JUDGMENT
N.N. Mathur, J.
This is a reference application at the instance of the Commissioner, Jodhpur, under section 256(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) with respect to the assessment year 1986-87 seeking reference of following questions, arising from the judgment of the Tribunal :
“1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in taking the view that the assessment for the year under consideration was barred by limitation despite the material on record contrary to the claim of the assessee in the matter and further this issue did not arise out of the appeal filed by the revenue ?
2. Whether, on the facts and in the circumstances of the case, the finding of the Tribunal that assessee’s book results acceptable was not inconsistent and contrary to the material on record against assessee’s claim in the matter and hence unreasonable and perverse in law ?”
2. The respondent-assessee is a bus operator. The assessment for the year 1986-87 was reopened after notice under section 143(2)(b) of the Act. The net profit of the assessee was determined at Rs. 2,36,084 with the add of an amount of Rs. 22,500 being net profit from sale of scrap. The contention was raised before the appellate authority that the assessment in question had become barred by limitation and the directions issued under section 144 of the Act was also against the provision of law. The appellate authority discussed the contention at length and rejected the same. The appellate authority also reduced from Rs. 2,36,392 to Rs. 80,000.
3. The department preferred an appeal against the judgment of the Tribunal regarding the reduction of the amount as indicated above. The assessee did not prefer any appeal against the order of the Commissioner rejecting the plea of limitation. However, the Tribunal examined the plea of limitation and reversed the finding of the Commissioner relying on a decision in Ramlal Kewalchand v. ITO (1993) 46 ITD 291 (Jp-Trib).
4. It is contended by Shri Bhandawat, the learned counsel for the department that in an appeal filed by the revenue it was not open for the Tribunal to disturb the finding against the assessee as the same was not challenged by him.
5. Having heard Mr. Bhandawat, the learned counsel for the respondent-assessee, in our view the Tribunal has committed error in rejecting the application of the revenue under section 256(2) in refusing to refer both the questions.
6. We allow the application and direct the Tribunal, Jodhpur, to prepare the statement of fact and refer the questions referred in para 1 for the opinion of this court.