TaxTMI 
TaxTMI 
2006 (2) TMI 226
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....43(1)(a) are not warranted. In the instant case, intimation was processed on 24th Nov., 1998, and on the same date, the notice was issued under s. 143(2) of the Act. 4. The case of the learned Departmental Representative, on the other hand is that the proceedings under s. 143(2) were commenced after processing the return under s. 143(1)(a) and hence impugned proceedings are valid. In this regard, the learned Departmental Representative relied on the decision of the Tribunal 'A' Bench, Hyderabad, in the case of Nav Bharat Ferro Alloys Ltd. (ITA No. 502/Hyd/1999, dt. 26th Feb., 2004), wherein the Bench observed that though the date of intimation and the date of notice under s. 143(2) were 13th Nov., 1998, the intimation has been processed first, and then only notice under s. 143(2) was issued, and hence proceedings under s. 143(1)(a) are valid. The learned Departmental Representative has filed two paper books, the first one containing 7 pages and the other containing 17 pages. Adverting our attention to the order-sheet entries the learned Departmental Representative submitted that the prima facie adjustments were made and necessary calculations were made in the order-sheet and onl....
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....n of the apex Court, the AO is not authorized to continue with the summary proceedings. Such being the case, the intimation under s. 143(1)(a) deserves to be cancelled. The learned Departmental Representative placed reliance upon the decision of the Tribunal in the case of Nav Bharat Ferro Alloys, which is distinguishable on facts inasmuch as, in that case there is a categorical finding of the Bench that the return was processed under s 143(1)(a) prior to issuance of the notice under s. 143(2) whereas in the instant case the facts, as found out from the order-sheet entries, clearly give an indication that the intimation under s. 143(1)(a) was signed by the AO only after commencement of proceedings under s. 143(2) of the Act. 7. Under the circumstances, we set aside the order of the AO, and cancel the intimation dt. 24th Nov., 1998, as being not valid in law. 8. In the result, appeal filed by the assessee is allowed. B.K. HALDAR, A.M.: June, 2005 I have gone through the order passed by the learned JM. But I am unable to agree with him that in the instant case, intimation under s. 143(1)(a) sent by the AO was not valid in law. I shall state, in the following paragraphs, t....
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....ima facie under s. 143(1)(a). 4. On the facts and in the circumstances of the case the learned Jt. CIT is not justified in disallowing under s. 143(1)(a) the interest accrued but not payable to KSIIDC of Rs. 7,72,261 as per the terms and conditions of the loan agreement and subsequently paid on due date. 5. On the facts and in the circumstances of the case, the learned Jt. CIT is not justified in disallowing under s. 143(1)(a) the interest accrued but not due on deferred payment guarantee of Rs. 49,532 which is not covered by the provisions of s. 43B and paid on due dates. 6. On the facts and in the circumstances of the case, the learned Jt. CIT is not justified in disallowing under s. 143(1)(a) the provident fund for March, 1997 Rs. 2,87,320 of engineering division which was paid within the due date specified under Provident Fund Act. 7. On the facts and in the circumstances of the case, the learned Jt. CIT is not justified in disallowing under s. 143(1)(a) the deduction rightly claimed under s. 80HHC of Rs. 5,84,460 with the support of report/certificate obtained in prescribed form. 8. On the facts and in the circumstances of the case, the learned Jt. CIT is not ju....
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....of TNGST payable Rs. 3,53,686 as prima facie under s. 143(1)(a). 4. On the facts and in the circumstances of the case, the learned Jt. CIT is not justified in disallowing under s. 143(1)(a) the interest accrued but not payable to KSIIDC of Rs. 7,72,261 as per the terms and conditions of the loan agreement and subsequently paid on due date. 5. On the facts and in the circumstances of the case, the learned Jt. CIT is not justified in disallowing under s. 143(1)(a) the interest accrued but not due on deferred payment guarantee of Rs. 49,532 which is not covered by the provisions of s. 43B and paid on due dates. 6. On the facts and in the circumstances of the case, the learned Jt. CIT is not justified in disallowing under s. 143(1)(a) the provident fund for March, 1997 Rs. 2,87,320 of engineering division which was paid within the due date specified under Provident Fund Act. 7. On the facts and in the circumstances of the case, the learned Jt. CIT is not justified in disallowing under s. 143(1)(a) the deduction rightly claimed under s. 80HHC of Rs. 5,84,460 with the support of report/certificate obtained in prescribed form. 8. On the facts and in the circumstances of the....
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....y even before signing of the intimation under s. 143(1)(a), the AO is barred from issuing intimation under s. 143(1)(a). According to the learned Member, after the AO takes a conscious decision to commence regular assessment proceedings even though such proceedings have not commenced as per the relevant provisions of the IT Act he is barred from taking action under s. 143(1)(a). For the above proposition, the Hon'ble JM has drawn support from the decision of the Hon'ble Supreme Court in the case of CIT vs. Gujarat Electricity Board (2003) 181 CTR (SC) 28 : (2003) 260 ITR 84 (SC). He has quoted from the above decision as under: "The legislature therefore intended that where the summary proceeding under sub-s. (1) has been adopted, there should be scope available for the Revenue either suo motto or at the instance of the assessee to make a regular assessment under sub-s. (2) of s. 143. The converse is not available: regular assessment proceedings having commenced under s. 143,(2), there is no need for the summary proceedings under s. 143(1)(a)." 9. As regards the Department's reliance on the decision of the Tribunal 'A' Bench, Hyderabad in the case of Nav Bharat Ferro Alloys Lt....
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.... s. 143(2). In the present case, as the order-sheet entry shows the entry for issue of intimation under s. 143(1)(a) prior to the entry for issuance of notice under s. 143(2), I hold that the intimation under s. 143(1)(a) was Issued prior to the issue of notice under s. 143(2). I draw support for the same from the Hyderabad 'A' Bench decision mentioned supra. I, therefore, hold that the intimation under s. 143(1)(a) was a valid intimation. This ground of assessee is, therefore, rejected. On account of difference between the learned Members of Hyderabad Bench 'A', the following question has been referred to me for consideration under s. 255(4) of the IT Act, 1961: "Whether, on the facts and in the circumstances of the case, the AO was justified in issuing an intimation under s. 143(1)(a) of the Act though simultaneously notice was issued under s. 143(2) of the Act." 2. The above controversy arose in the circumstances that AO issued intimation under s. 143(1)(a) on 24th Nov., 1998 when simultaneously on the same date he issued notice under s. 143(2) of the IT Act. 2.1 In the case of CIT vs. Gujarat Electricity Board (2003) 181 CTR (SC) 28 : (2003) 260 ITR 84 (SC) their Lo....
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.....' In para 6 of his order, it has been noted by him that an order sheet page No. 3, immediately after typing the manual calculations made at order sheet p. 2, the AO has mentioned 'issue notice under s. 143(2) immediately. The signature of AO below the above noting bears the date of 24th Nov., 1998. Immediately below, the following noting is found. 1. 'Intimation under s. 143(1)(a) explanatory sheet and challan for Rs. 70,93,351 put up please.' The notice under s. 143(2) put up please dt. 27th May, 1999 at 5 p.m." 3.3 After consideration of above facts, the learned AM observed that both the intimation under s. 143(1)(a) and notice under s. 143(2) were signed on the same date. This is clear from para 4.1 of the order of the learned CIT(A), whereas the assessee's claim is that intimation under s. 143(1)(a) was issued subsequent to issue of notice under s. 143(2) of the Act. The Department has claimed the opposite. There was no evidence produced by either party to substantiate the conclusion. However, in law there is a presumption that what is clear from record is taken as correct unless contrary is proved. As the entry of issue of intimation under s. 143(1)(a) is writt....
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....s to levy additional tax under s. 143(1)(a) and directions to issue notices were signed by the AO as under: ------------------------------------------------------------ "Income returned 3,80,54,150 Add: (A) Disallowance under s. 43B ------------------------------------------------------------ 1. APGST payable: 21,63,792 Instalments granted by the CTO cannot be considered as discharge of liability before the due date under s. 43B unless it is a sales-tax deferral scheme under the Sales-tax Act as per Boards Circular No. 496 dt. 25-9-1987. ------------------------------------------------------------ 2. TNGST payable as 3,53,686 per Annexure - III to the Audit Report ------------------------------------------------------------ 3. Interest accrued &nb....
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....------------------------------------------------------ Levy Additional tax on Rs. 42,59,331 Issue Notice under s. 143(2) immediately. Sd./- 24th Nov., 1998" 5.1 The learned counsel further relied on the decision of the Hon'ble Calcutta High Court in the case of Indian Aluminium Co. Ltd. vs. Union of India & Ors. (2005) 193 CTR (Cal) 123 : (2004) 271 ITR 73 (Cal). A reference to the decision of the Rajasthan High Court in the case of CIT vs. Udaipur Distillery Co. Ltd. (2003) 182 CTR (Raj) 284 : (2004) 267 ITR 358 (Raj) was also invited to contend that intimation issued was bad in law. ....
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....sions of the IT Act . "143(1)(a) Where a return has been made under s. 139, or in response to a notice under sub-s. (1) of s. 142, (i) If any tax or interest is found due on the basis of such return, after adjustment of any tax deducted at source, any advance tax paid and any amount paid otherwise by way of tax or interest, then, without prejudice to the provisions of sub-s. (2), an intimation shall be sent to the assessee specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under s. 156 and all the provisions of this Act shall apply accordingly; and (ii) if any refund is due on the basis of such return, it shall be granted to the assessee': Provided that in computing the tax or interest payable by, or refundable to the assessee the following adjustments shall be made in the income or loss declared in the return. (Adjustments which can be made are not relevant for this issue). (1A) (a) Where as a result of the adjustments made under the first proviso to cl. (a) of sub-s. (1),- (i) the income declared by any person in the return is increased; or (ii) the loss declared by such person in the return is reduced or is ....
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....d determine the sum payable by him on the basis of such assessment. (4) Where a regular assessment under sub-s. (3) of this section or s. 144 is made,- (a) any tax or interest paid by the assessee under sub-s. (1) shall be deemed to have been paid towards such regular assessment; (b) if no refund is due on regular assessment or the amount refunded under sub-s. (1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly....." 7.4 Above statutory provisions make it clear that AO is permitted to make 'adjustments' without prejudice to the provisions of sub-s. (2). After adjustments the AO can send intimation to the assessee. It is further clear that after making adjustments and after sending intimation, the AO can send notice under sub-s. (2) to the assessee. The question before us is whether the AO can simultaneously exercise powers under s. 143(1)(a) and 143(2) of the IT Act. It is to be seen that exercise of power under s. 143(1) is not made permissible after the commencement of proceeding under s. 143(2) of the Act. The same i....
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....sub-s. (1) of s. 143 of the Act was issued on the same date, when the notice under sub-s. (2) of s. 143 of the Act was issued. In the affidavit-in-opposition filed by the IT Department, it has not been stated that in point of fact, the intimation under sub-s. 143 was issued at an earlier point of time on the same date and subsequent thereto it came to the knowledge of the AO that for some reason or the other he has not been able to ensure that the assessee has not underpaid the tax. The conclusion would be, therefore, that the intimation under sub-s. (1) and notice under sub-s. (2) were issued simultaneously. When steps are taken under sub-s. (2) of s. 143, it is commonly known as regular steps to make regular assessment. The same stand culminated upon making of an assessment order of the total income. Once that order is made, s. 156 of the Act obliges the AO to issue a demand. Sec. 220 then requires the assessee to pay the same within 30 days from the date of receipt of the demand and in default to pay interest at the rate of one and half per cent per month. The assessee is required to pay the amount mentioned in the intimation and in default of payment within 30 days from the dat....
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....f the IT Act. The assessee could not be made to pay additional tax simultaneously under sub-s. (1A) of s. 143 of the IT Act. Such treatment is not envisaged when AO has already decided to call upon the assessee to produce evidence in support of return. These reasons given by the Hon'ble Gujarat High Court also support the claim that two proceedings: one under s. 143(1)(a) and second under s. 143(2) cannot be commenced or carried on simultaneously. 9.2 In the present case it is not clear whether AO signed intimation issued under s. 143(1)(a) of the IT Act or signed and issued notice under s. 143(2) of the IT Act. The notice under s. 143(2) of IT Act was served on the assessee earlier than intimation issued under s. 143(1)(a). At the same time it is reasonable to hold on facts that both the proceedings were simultaneously taken by the AO on 24th Nov., 1998. As per decisions of the Hon'ble Gujarat High Court and the Hon'ble Calcutta High Court such action is not permissible. Accordingly proceedings under s. 143(1)(a) have to be held to be without jurisdiction. The Revenue authorities can carry proceedings under s. 143(3) of the IT Act. 10. The learned Departmental Representative....