1987 (1) TMI 146

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....1981 under section 143(1) of the IT Act, 1961, investment allowance intensive care unit was allowed as deduction. Later on the Income-tax Officer noticed that the investment allowance claimed by the assessee in respect of the intensive care unit was not allowable under the Act. Since this was a mistake apparent from the record, a show-cause notice under section 154 was issued to the assessee. There was no response from the assessee. The ITO, therefore, rectified the assessment under section 154 by disallowing the investment allowance of Rs. 11,759. 3. In the appeal before the Appellate Assistant Commissioner the assessee contended that the mistake sought to be rectified was due to a change of opinion and so the rectification was not just....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....) (b) speaks of verifying the 'correctness and completeness of the return.' Section 154 speaks of rectification of 'mistakes apparent from the records. Section 143(2) (b) applies even if no assessment under section 143(1) was made. Further, there is no bar for the ITO to take action under section 154 even though he could have taken action under section 143(2) (b). So, the impugned order is valid. 6. We have considered the rival submissions. Section 143(2)(b) comes into play only when the ITO considers it necessary or expedient to verify the correctness and completeness of the return, whether or not assessment has been made under section 143(1). If the ITO considers it necessary to verify the correctness and completeness of the return, he....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....onsider it necessary or expedient to verify the correctness and completeness of the return he would have resorted to section 143(2)(b). 7. The matter can be looked into from another angel also. The circumstances in which an order under section 154 or section 143(3), after complying with the procedure under section 143(2)(b), may overlap and are not mutually exclusive. If in a given case the requirements of both sections 154 and 143(3) read with section 143(2)(b) are satisfied, the application of neither can be ruled out. If the requirements of section 154 are satisfied the assessee cannot claim as of right that he should be dealt with only under section 143(3) read with section 143(2)(b). The Kerala High Court in the case of R. Madhavan ....