JUDGMENT
U.T. Shah, J.
1. The assessee and his wife had constructed a property in Kolhapur. During the assessment proceedings in the assessment year 1966-67, the Income-tax Officer (“the I.T.O.”), worked out the explained investment in the said property at Rs. 1,37,964 even though he was aware that the construction of the property had started in the year 1961 and was completed in the year 1966. Against the said addition, the assessee preferred and appeal before the Appellate Assistant Commissioner (“the A. A.C.”) who, after considering the submissions made on behalf of the assessee as well as the material available on record, held that the investment made by the assessee and his wife was not Rs. 1,37,964 as worked out by the Income-tax Officer but is was Rs. 1,31,692. Against the said order of the Appellate Assistant Commissioner, the assessee had gone up in appeal to the Tribunal contesting the addition made in the assessment year 1966-67. After having the parties, the Tribunal restricted the addition to Rs. 70,000 without giving any express finding or direction that the amount deleted in the assessment year 1966-67 is to be included and assessed in the assessment years 1964-65 and 1965-66
2. It may be mentioned that, in the assessment proceedings for that assessment year 1965-66, the assessee had, vide his letter dated August 28, 1966, intimated to the Income-tax Officer regarding the cost of construction of the building in question along with the layout plan.
3. The Income-tax Officer reopened the assessment for the assessment years 1964-65 and 1965-66 with a view to make certain additions on account of unexplained investment in the property in question. Apart from challenging the addition made by the Income-tax Officer the assessee had also challenged the reopening of the assessments under section 147(a) of the Act on the ground that there was no failure on his part to disclose truly and fully the material facts for the purpose of making the assessment at the time of the original assessment proceedings. The Appellate Assistant Commissioner, however, upheld the action of the Income-tax Officer.
4. Thereafter, the assessee came up in appeal before the Tribunal and once again contested both the additions made by the Income-tax Officer as well as the reopening of the assessments under section 147(a) of the Act. The assessee also submitted that the assessments cannot be sustained even on the basis that the Income-tax Officer had taken action under section 147(b) of the Act inasmuch as the Tribunal has not give any finding or direction in this regard while passing its order for the assessment year 1966-67. In its order reference, the Tribunal held that the assessment could not have been reopened under section 147(a) of the Act. Further, it held that it was not possible to convert the reopening proceedings from (a) to (b) of section 147 of the Act. In any event, the Tribunal held that the reopening of the assessment, even if it is assumed that it was correctly made under section 147(a) of the Act, the same was barred by limitation. In support of its conclusion, the Tribunal relied on the decision of this court mentioned in its order.
5. Having been dissatisfied with the order of the Tribunal, the Revenue made an application under section 256(1) of the Income-tax Act, 1961, and sought to refer the following questions :
“1. Whether, the Tribunal is right in holding the provisions section 147(a) are not attracted in this case, in spite of the fact that the assessee, in the course of appeal for the assessment year 1966-67, has made a tacit admission that the income for that year under consideration has not been disclosed by him for the respective years ?
2. Whether the Tribunal is right in holding that the proceedings initiated by the Income-tax Officer under section 147(a) cannot be sustained under section 147(b), when such action could validly be taken ?
3. Whether the Tribunal was justified in holding that the provision of section 150 read with Explanation 2 to section 153(3) were not attracted on the facts of the case ?”
6. The Tribunal, however, declined to refer question No. 1. As regards the other two questions, the Tribunal framed single question, viz. :
“Whether, on the facts and in the circumstance of the case and in law, the proceedings expressly initiated by the Income-tax Officer under section 147(a) cannot be sustained under section 147(b) read with Explanation 12 to section 153(3) of the Income-tax Act, 1961, for the assessment years 1964-65 and 1965-66 ?”
7. After some discussion with the parties and after carefully going through the material available on record, more particularly the order of the Tribunal under reference, it is agreed by the parties that the question as reframed and referred to us by the Tribunal does not arise out of its case of its order. The Tribunal has applied the ratio laid down by this court in the case of New Kaiser-I-Hind Spg. and Wvg. Co. Ltd. v. CIT [1977] 107 ITR 760 which is directly on the point at issue. In the instant case, the notice which was specifically issued under section 147(a) of the Act cannot be converted into a notice under section 147(b) of the Act that as per the said decision of this court.
8. Under the circumstances, we decline to answer the question referred to us and return the reference unanswered. No order as to costs.