Appeal against section 143(1) intimation remains maintainable when tax liability itself is denied under section 246(c).

An intimation under section 143(1) can be appealable under section 246(c) where it effectively imposes a tax liability that the assessee denies, because the existence of other remedies under sections 143(2)(b), 154 or 264 does not extinguish the statutory right of appeal. A demand based on a wrong assumption about the source or character of income may, in substance, amount to a denial of liability to be assessed in the manner adopted by the Assessing Officer, bringing the matter within section 246(c). The commentary states that the appeal was maintainable in such facts and that dismissal in limine by the first appellate authority was erroneous.

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Issues: Whether an appeal lies under section 246(c) against an intimation or order made under section 143(1) where the assessee denies liability to be assessed in the manner adopted by the Assessing Officer.

Analysis: The availability of remedies under section 143(2)(b), section 154 or section 264 does not take away the statutory right of appeal where the assessee objects to the tax liability imposed under section 143(1). An adjustment or demand raised on a wrong assumption about the source or character of income can amount, in substance, to a denial of the assessee's liability to be assessed in the manner adopted by the Assessing Officer, bringing the case within section 246(c).

Conclusion: The order under section 143(1) was appealable in the facts of the case, and the first appellate authority erred in dismissing the appeal in limine.

Ratio Decidendi: Where an intimation under section 143(1) effectively imposes a tax liability that the assessee denies, the assessee may maintain an appeal under section 246(c) notwithstanding the existence of other statutory remedies.

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