Draft assessment threshold controls extended limitation; if the variation limit is not met, ordinary time limits apply.

The draft assessment procedure applies only where the variation in returned income or loss exceeds the Board-prescribed threshold; if that threshold is not met, Section 144B is not attracted and the extended limitation under Explanation 1(iv) to Section 153 cannot be invoked. In that situation, the assessment remains governed by the ordinary limitation period, and completion beyond that period renders the assessment time-barred. The text also notes that, on the stated facts, the assessment was not completed within one year from filing of the return.

---

---

Issues: Whether the assessment order was barred by limitation and whether the extended limitation under the draft assessment procedure applied.

Analysis: The return disclosed total income including agricultural income, and the assessment ultimately made an addition which, as regards agricultural income, involved a variation exceeding the monetary limit. The Court held that for the draft assessment procedure to apply, the variation in income or loss returned must exceed the limit fixed by the Board. Since that requirement was not satisfied on the facts, Section 144B was not attracted and the extended limitation under Explanation 1, clause (iv), to Section 153 was unavailable. The assessment was also not completed within one year from the date of filing of the return.

Conclusion: The assessment order was barred by limitation and the question was answered in favour of the Revenue.

Ratio Decidendi: The extended limitation tied to the draft assessment procedure applies only when the statutory threshold for variation in the returned income or loss is satisfied; if that threshold is not met, the ordinary limitation period governs the assessment.

---