Ajit Kumar Sengupta, Bhagabati Prasad Banerjee, JJ. ( 1 ) IN this reference under Section 256 (1) of the Income-tax Act, 1961, for the assessment year 1975-76, the question which has been referred to this court is "whether the order of assessment is time-barred ?" ( 2 ) THE facts are that the assessee submitted a return showing an income of Rs. 47,848. The said, income was arrived at as follows : Income from house property (4) 2,25,141 Loss under the head "business or profession" (-) 1,77,3030 Total income 47,838 ( 3 ) THE Income-tax Officer, however, arrived at the total income at Rs. 2,34,199 and also proposed to disallow the loss of Rs. 1,77,303 shown under the head "income, profits and gains of business or profession". The Income-tax Officer felt that the loss in business (on sale of shares) claimed by the assessee should come under the head "short-term capital loss" and, accordingly, the provisions of Section 144b (1) of the Income-tax Act were attracted. The Income-tax Officer, therefore, submitted a draft assessment order 6n the assessee on March 18, 1978. In the normal course, the assessment would have been barred by limitation by March 31, 1978. The assessee, on April 5, 1978, stated that they were refraining from making any objection under Section 144b (2) of the Act. Accordingly, the Income-tax Officer completed the assessment under Section 144b (3), the assessment being completed on the basis of the draft order. The contention of the assessee is that Section 144b (1) can only be applied if the variation is made in the income or loss returned which is prejudicial to the assessee. In this case, the Income-tax Officer having allowed the loss under the head "short-term capital loss" instead of "business loss", in effect, there was no prejudice to the assessee. Accordingly, it was contended that the assessment was barred by limitation. This contention, however, was not raised before the Income-tax Officer. This point was taken before the Commissioner of Income-tax (Appeals ). The Commissioner of Income-tax (Appeals) noted the contention of the assessee as follows :"it is pointed out by the learned representative that the Income-tax Officer had sent a draft assessment order under Section 144b. This contention, however, was not raised before the Income-tax Officer. This point was taken before the Commissioner of Income-tax (Appeals ). The Commissioner of Income-tax (Appeals) noted the contention of the assessee as follows :"it is pointed out by the learned representative that the Income-tax Officer had sent a draft assessment order under Section 144b. The assessee pointed out that the order in no way was prejudicial to the assessee, because of the treatment of loss on purchase and sale of shares as 'short-term capital gain' by the Income-tax Officer instead of accepting the loss as a loss in share-dealing business. Moreover, the difference between the assessed income and the returned income did not exceed Rs. 1 lakh. So the Income-tax Officer should have completed the assessment within March 31, 1978. ""i have carefully considered the objection raised by the learned representative and the submissions made by the Income-tax Officer. I find that the analysis made by the Income-tax Officer of the facts of the case was indeed pertinent to the issue. The decision of the Income-tax Officer was in fact prejudicial to the interests of the assessee, inasmuch as the claim of loss under the head "business" amounting to more than rupees one lakh was not accepted by the Income-tax Officer. The Income-tax Officer was fully justified in sending a draft order to the assessee under Section 144b, whereafter the assessment was done within thirty days. So, the objection of the learned representative was meritless and is, accordingly, dismissed. " ( 4 ) THE assessee preferred an appeal before the Tribunal. The Tribunal did not agree with the contention of the assessee. The Tribunal upheld the order of the authorities below. ( 5 ) BEFORE us, the contentions raised before the Tribunal have been reiterated. Section 144b (1) reads as follows :"notwithstanding anything contained in this Act, where, in an assessment to be made under Sub-section (3) of Section 143, the Income-tax Officer proposes to make any variation in the income or loss returned which is prejudicial to the assessee and the amount of such variation exceeds the amount fixed by the Board under Sub-section (6), the Income-tax Officer shall, in the first instance, forward a draft of the proposed order of assessment (hereinafter in this section referred to as the draft order) to the assessee. " ( 6 ) THE Income-tax Officer, in the draft assessment order, proposed to disallow the loss under the head "income, profits and gains of business or profession". As a matter of fact, the loss was claimed at Rs. 1,77,303, but it was not accepted by the Income-tax Officer, although he ultimately computed it as a short-term capital loss of Rs. 1,51,342 and the balance loss was not allowed. There was thus a proposed variation in the loss and there was also variation in the income returned which was considered to be prejudicial by the Income-tax Officer to the assessee. It is significant that the words used are "any variation in the income or loss returned". The Legislature has not used the words "total income". In the context in which the word "income" appears, it cannot be interpreted as total income. Section 144b is to be applied only when there is a variation in the income. Total income will necessarily be computed only after variation is made by the Income-tax Officer in the course of the assessment. There is a significant distinction between "income" and "total income". The words used in this section can refer only to the income or loss returned under any particular source. ( 7 ) THE concept of total income is not embedded in Section 144b (1 ). As indicated, the words used in the section refer only to the income or loss returned. It may be under any of the heads. When the Income-tax Officer does not allow the business loss to be determined which could have been carried forward for the subsequent year, the assessee would be prejudiced. "short-term capital loss" for the subsequent years can only be set off against short-term capital gains. When the assessee carries on the business or it has got income from its business, it can carry forward the loss and can set off against the business income for the subsequent years. ( 8 ) ON the facts of this case, we are of the view that the Commissioner of Income-tax (Appeals) as well as the Tribunal came to the correct conclusion that there was a variation and, accordingly, the Income-tax Officer exercised his jurisdiction properly under Section 144b (1) of the Act, and the assessment is not barred by limitation. ( 8 ) ON the facts of this case, we are of the view that the Commissioner of Income-tax (Appeals) as well as the Tribunal came to the correct conclusion that there was a variation and, accordingly, the Income-tax Officer exercised his jurisdiction properly under Section 144b (1) of the Act, and the assessment is not barred by limitation. ( 9 ) FOR the reasons aforesaid, we answer this question in the reference in the negative and in favour of the Revenue. There will be no order as to costs.