Draft assessment procedure inapplicable without variation in returned income; limitation under ordinary assessment law still applies.

Where no variation in returned income or loss was proposed, the draft assessment procedure under section 144C(1) was inapplicable, so the assessment had to be completed within the ordinary limitation period under section 153. A draft assessment order issued later could not enlarge that statutory time limit. On those facts, the final assessment order passed after expiry of the prescribed period was time barred and quashed, with the issue decided in favour of the assessee.

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Issues: Whether, for the relevant assessment year, the final assessment order was barred by limitation where no variation in the returned income or loss was proposed and, consequently, no draft assessment order under section 144C(1) was required.

Analysis: The assessee's case involved only the rate of tax on income already returned, and there was no variation in the returned income or loss. On those facts, the statutory mechanism under section 144C(1) was held inapplicable. The applicable time limit for completing the assessment therefore remained governed by section 153, and the later issuance of a draft assessment order could not extend or enlarge that limitation. Since the final assessment was passed after the expiry of the prescribed period, it was held to be time barred.

Conclusion: The assessment order was quashed as time barred, and the issue was decided in favour of the assessee.

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