TaxTMI 
TaxTMI 
2008 (7) TMI 454
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.... this appeal is as follows : "On the facts and in the circumstances of the case and in law, the CIT(A) has erred in directing the AO to allow proportionate credit of TDS of Rs. 68,98,588 in either asst. yr. 1992-93 or in asst. yr. 1993-94." 4. First, we take up the appeal for asst. yr. 1992-93. In order to decide the controversy on charging of interest under s. 220(2) of the Act, it will be necessary to know the sequence of events out of which the present appeal has arisen. The assessee filed return of income for asst. yr. 1992-93 on 30th Dec, 1992 declaring income at nil. The AO processed the return of income under s. 143(1)(a) on 29th June, 1993 and allowed refund for TDS of Rs. 8,83,022 and interest thereon under s. 244A of Rs. 1,32,458 aggregating to Rs. 10,15,480. Thereafter, the assessee filed a revised return on 13th Sept., 1993 along with another set of TDS certificates amounting to Rs. 60,15,566. This return of income was also processed under s. 143(1)(a) on 30th March, 1994 allowing refund of Rs. 64,36,655 which included interest under s. 244A of Rs. 4,21,089. Thus, the assessee was allowed refunds on two occasions i.e. on 29th June, 1993 and 30th March, 1994 aggreg....
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.... 1992-93. At this juncture, Addl. CIT, Range-11, noted that though the interest income of Rs. 2,69,84,301 was assessed in asst. yr. 1993-94, but credit for TDS relating to this income continued to be allowed by the AO in asst. yr. 1992-93. As per the provisions of s. 199 of the Act, the credit for the TDS was to be allowed in the year in which such income was assessable to tax. Addl. CIT, Range-11 Delhi, accordingly, directed the AO to withdraw the credit of TDS of Rs. 68,98,588 in asst. yr. 1992-93 and allow the same in asst. yr. 1993-94. 8. Thereafter, the AO issued notice under s. 154 to amend order passed under s. 143(1)(a) for asst. yr. 1992-93 dt. 30th March, 1994 to which the assessee had no objection provided interest was properly charged /allowed. The AO passed order under s. 154 withdrawing TDS credit from asst. yr. 1992-93 vide order dt. 28th June, 2004. However, the office of the AO prepared two sets of ITNS-150 even dt. 28th June, 2004, one ITNS-150 (referred as first) for allowing refund for tax paid at Rs. 2,26,40,638 which included an amount of Rs. 654,36,655 on account of TDS refund adjusted. The AO computed interest under s. 244A of Rs. 2,37,76,490 and worked o....
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.... assessee. Therefore, the assessee was eligible for lesser refund on account of interest under s. 244A of the Act. He further submitted that as a result of deleting interest under s. 220(2) of the Act by the learned CIT(A), the assessee has got more refund than what was legitimately due to it. Revenue cannot be made to suffer because of the mistake committed by AO in making two separate ITNS-150, for single order passed under s. 154 of the Act. 12. On the other hand, the learned Authorised Representative of the assessee submitted that the AO has passed two separate orders, one under s. 254/143(3). dt. 25th Feb., 2004 to give effect to the order of the Tribunal and another under s. 154/143(1)(a) dt. 28th June, 2004 to rectify intimation earlier issued. The subject-matter of appeal before the learned CIT(A) and the Tribunal is the order passed under s. 154/143(1)(a) of the Act. Since there were two separate orders and the AO had separately determined refund/demand pursuant thereto, it cannot be now contended by Revenue that the AO should not have calculated interest on demand created on withdrawal of TDS credit and the same could have been set off against each other and interest s....
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....639/Del/1994, dt. 17th Sept., 2002 in the appeal of assessee for asst. yr. 1992-93 although has deleted the addition, but given the directions to assess the same in the asst. yr. 1993-94 as income from other sources. It is, therefore, proposed to withdraw the credit for TDS amounting to Rs. 68,98,588 from asst. yr. 1992-93 and allow the same in the asst. yr. 1993-94." 14. From the plain reading of the said notice, it is clear that AO intended to amend intimation dt. 30th March, 2004 in order to withdraw the credit for TDS amounting to Rs. 68,98,588 from asst. yr. 1992-93 and allow the same in the asst. yr. 1993-94. The assessee gave no objection to proposed rectification of order under s. 143(1)(a) subject to the condition that interest was properly charged/allowed. Therefore, the assessee agreed for payment of interest on demand and right to receive interest on refunds as per the provisions of law. The AO in order dt. 28th June, 2004 has specifically stated that in order passed on 25th Feb., 2004 under s. 254/143(3), the credit for TDS amounting to Rs. 68,98,588 on the interest income was wrongly allowed although the interest income on which aforementioned TDS was deducted was ....
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.... which, on the basis of the information available in such return and the accompanying documents is prima facie admissible, but which is not claimed in the return; and (iii) to disallow any loss carried forward, deduction or allowance or relief claimed in the return, which, on the basis of the information available in the return, and in the accompanying documents is prima facie inadmissible. So, the AO on the basis of the information furnished in the return and accompanying documents can do only obvious corrections and he has no power to enter into debatable issues. If some relief can be granted on the basis of the information given in the return that may be granted and if some relief on the basis of the information furnished in the return, is not admissible, then that may be disallowed and more than that nothing can be done by the AO. In connection, the CBDT issued Circular No. 549 [[1990) 82 CTR (St) 1 : [1990] 182 ITR (St) 1], dt. 31st Oct., 1989. The circular points out, inter alia, that under the new scheme for assessment, the requirements of passing an assessment order in all cases where returns of income are filed, has been dispensed with and the issue of an acknowledgment sl....
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....l National Ltd. v. Dy. CIT [1996] 135 CTR (Guj) 150 : [1996] 222 ITR 151 (Guj) wherein it has been held that after assessment proceedings are initiated under s. 143(2) rectification under s. I54(1)(a) is not possible. Similar view has been taken by Hon'ble Calcutta High Court in the case of Peico Electronics & Electricals Ltd. v. Dy. CIT [2000] 160 CTR (Cal) 365 : [1999] 103 Taxman 98 (Cal). It has been held that an intimation under s. 143(1)(a) is a adjustment which could be made on basis of record available to AO which is filed by assessee along with return. Since notice under s. 143(2) is a notice of regular assessment, a notice under s. 143(2) could be issued even after intimation under s. 143(1)(a) but no intimation could be issued under s. 143(1)(a) after issuance of notice under s. 143(2). 16.2 The views expressed by Hon'ble Gujarat High Court in the case of Lakhanpal National Ltd. and Hon'ble Calcutta High Court stand fortified by the decision of Hon'ble Supreme Court in the case of CIT v. Gujarat Electricity Board [2003] 181 CTR (SC) 28 : [2003] 260 ITR 84 (SC) as explained in the following words : "There is no dispute that s. 143(1)(a) of the Act enacts a summary pr....
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....iven by modification of order passed under s. 254/143(3) and so on. 17. Hon'ble Supreme Court in the case of Kalyankumar Ray v. CIT [1992] 102 CTR (SC) 188 : [1991] 191 ITR 634 (SC) had an occasion to examine the nature and importance of "Income-tax computation form" (ITNS-150). At p. 638 Hon'ble Supreme Court observed as under : "In this context, one way notice of the fact that, initially, r. 15(2) of the IT Rules prescribed Form No. 8, a sheet containing the computation of tax, though there was no form prescribed for the assessment of the income. This sub-rule was dropped in 1964. Thereafter, the matter has been governed by the Departmental instructions. Under these, two forms are in vogue. One is the form of what is described as 'assessment order' [IT-30 or ITNS-65]. The other is what is described as the 'Income-tax computation form' or 'form for assessment of tax/refund' (ITNS-150). The practice is that, after the 'assessment order' is made by the ITO, the tax is calculated and the necessary columns of ITNS-150 are filled up showing the net amount payable in respect of assessment year. This form is generally prepared by the staff, but it is checked and signed or initialed....
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....return or issue of notice and ending with determination of tax payable by the assessee as held by Hon'ble Supreme Court in the case of S. Sankappa v. ITO [1968] 68 ITR 760 (SC). The AO in order to rectify the mistake of non-withdrawal of TDS credit in asst. yr. 1992-93 in the order passed under s. 254/143(3) on 25th Feb., 2004, passed order under s. 154 on 28th June, 2004 and two different ITNS-150 forms prepared by the office and signed by the AO are complementary to each other and will constitute part and parcel of order passed under s. 154 on 28th June, 2004. The order passed under s. 154 on 28th June, 2004, thus, will be rectification of order dt. 25th Feb., 2004 passed under s. 254/143(3) giving effect to the order of Tribunal. 18. In view of above discussion, we are unable to accept the contention of learned Authorised Representative of the assessee that AO has passed two orders i.e. one on 25th Feb., 2004 giving effect to the order of Tribunal and other on 28th June, 2004 rectifying intimation dt. 30th March, 1994. As held above, the order passed under s. 154 on 28th June, 2004, is nothing but the rectification of order dt. 25th Feb., 2004 passed under s. 254/143(3) givin....