2010 (10) TMI 271 - AT - Income Tax

Tribunal upholds intimation under section 143(1), deems Supreme Court decision inapplicable. Appeal not maintainable.

The Tribunal held that the intimation issued under section 143(1) after the notice under section 143(2) was not illegal under the amended provisions. The ... Intimation u/s 143(1)(a) - The intimation issued u/s. 143(1)(a) after issue of notice u/s. 143(2) as illegal - As per amended provisions the Assessing Officer does not have any power to make prima facie adjustment to a return of income field by the assessee while issuing intimation under section 143(1) - To simplify this cumbersome procedure, the Finance Act has provided that an intimation sent to the assessee under section 143(1) or 143(1B) shall be deemed to be an appealable order for the purposes of section 246 of the Income-tax Act - The Act has also amended section 154 of the Income-tax Act to provide for rectification of intimation or deemed intimation referred to in sub-section (1) of section 143 - In CIT v. Gujarat Electricity Board [2002 -TMI - 6115 - SUPREME Court], the Supreme Court held that it was not open to the Revenue to issue intimation under section 143(1)(a) after notice for regular assessment is issued under section 143(2) – Accordingly the appeal is allowed Issues Involved:1. Legality of intimation issued under section 143(1) after the issuance of notice under section 143(2).2. Applicability of the Supreme Court decision in Gujarat Poly-AVX Electronics Ltd. v. DCIT to the order passed under section 143(1).3. Maintainability of the appeal filed by the assessee before the CIT(A) against the intimation issued under section 143(1).Detailed Analysis:Issue 1: Legality of Intimation Issued Under Section 143(1) After Issuance of Notice Under Section 143(2)The revenue appealed against the order of CIT(A) which held the intimation issued under section 143(1) as illegal after the issuance of notice under section 143(2). The assessee filed a return of income, and subsequently, a notice under section 143(2) was issued by the AO. Later, an intimation under section 143(1) was issued, showing assessed income without providing any basis, which led to a lesser refund than claimed by the assessee. The CIT(A) cancelled the intimation under section 143(1) as illegal, relying on the Supreme Court decisions in CIT v. Gujarat Electricity Board and Gujarat Poly-AVX Electronics Ltd. v. DCIT, which held that intimation under section 143(1) cannot be issued after a notice under section 143(2).Issue 2: Applicability of the Supreme Court Decision in Gujarat Poly-AVX Electronics Ltd. v. DCIT to the Order Passed Under Section 143(1)The revenue contended that the decision in Gujarat Electricity Board related to a period when section 143(1)(a) allowed prima facie adjustments, which was amended by the Finance Act, 1999, removing such powers. The revenue argued that the amended provisions do not permit an appeal against an intimation under section 143(1), and the Supreme Court decision is not applicable to the current law. The Tribunal agreed with the revenue, noting that the provisions of section 143(1) as amended by the Finance Act, 1999, do not allow any adjustments by the AO and thus, the decision of the Supreme Court in Gujarat Electricity Board is not relevant for the current assessment year.Issue 3: Maintainability of the Appeal Filed by the Assessee Before the CIT(A) Against the Intimation Issued Under Section 143(1)The revenue argued that the appeal before CIT(A) was not maintainable as there was no prejudice caused to the assessee by the intimation under section 143(1). The Tribunal examined the provisions of section 143(1) and section 246, noting that after the amendment by the Finance Act, 1999, no appeal lies against an intimation under section 143(1). The Tribunal observed that the assessee could seek other remedies, such as rectification under section 154, but not an appeal under section 246. The Tribunal upheld the revenue's plea, agreeing that the appeal before CIT(A) was not maintainable and allowed the revenue's appeal.Conclusion:The Tribunal concluded that the intimation issued under section 143(1) after the issuance of notice under section 143(2) was not illegal under the amended provisions. The Supreme Court decision in Gujarat Electricity Board is not applicable to the current law, and the appeal before CIT(A) was not maintainable. The Tribunal allowed the revenue's appeal, setting aside the order of CIT(A).