TaxTMI 
TaxTMI 
2010 (10) TMI 271
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....cumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the appeal field by the assesses before the CIT(A) is not maintainable because there is no prejudice caused by the order u/s. 143(1) of the Act to the assessee as vide the same order the refund of Rs. 56,34,37,694 is only determined as payable to the assessee" 2. The facts and circumstances giving rise to the present appeal by the revenue are as follows. The assessee is a company. It filed a return of income for assessment year 2006-07 on20/10/2006 declaring an income of Rs. 8,06,501,48,149. A notice under section 143(2) of the income-tax Act, 1961 (the Act) dated10/9/2007 was issued by the AO and served on the assessee on September, 2007. This is a notice for making a regular assessment u/s. 143(3) of the Act. The AO issued an intimation under section 143(1) of the Act, dated23/11/2007. This was later served on the assessee, only on5/2/2008. As against the above returned income of Rs. 8,06,01,48,145 a sum of Rs. 8,64,11,91,630 was shown as assessed income in the intimation under section 143(1) of the Act, without giving any basis for the same. A consequential interest of Rs. 99,39,417 unde....
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....st an intimation under section 143(1)(a) of the Act. Explanation to section 143 gave a right of appeal to assessee against an intimation under section 143(1)(a) of the Act. By the very amendment act section 246(1)(a) was also amended whereby a right of appeal was given to an assessee against adjustment made under section 143(1) of the Act, was given to an Assessee, against any adjustment made to the return of income filed by an Assessee. After substitution of the provisions of section 143(1)(a) withdrawing the power of the Assessing Officer to make prima facie adjustment w.e.f.1/6/1999 explanation to section 143 was deleted. 6. During the period when there was no right of appeal against an intimation under section 143(1)(a), proviso to section 154(2)(b) of the Act gave a right to the assessee to apply for rectification of an intimation issued under section 143(1)(a) of the Act. According to the ld. D.R above change in law would clearly show that against an order under section 143(1) of the Act there is no right of appeal to assessee. According to him the decision of the Hon'ble Supreme Court in the case of Gujarat Electricity Board (supra) related to a period when provisions of ....
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.... by way of tax or interest, then, without prejudice to the provisions of sub-section (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 section 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, namely: - (i) any arithmetical errors in the return, accounts or documents accompanying it shall be rectified; (ii) any loss carried forward, deduction, allowance or relief, which, on the basis of the information available in such return, accounts or documents, is prima facie admissible but which is not claimed in the return, shall be allowed; (iii) any loss carried forward, deduction, allowance or relief claimed in the return, which, on the basis of the information available in such return, accounts or documents, is prima facie inadmissible, shall be disallowed. Prov....
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....e Deputy Commissioner (Appeals) or, as the case may be Commissioner (Appeals) against such intimation and the provisions of section 246 and section 249 shall have effect as if the said intimation were an order for the purposes of those sections. 12. By the Finance Act, 1994 w.e.f.1-6-1994 Explanation to section 143 was amended whereby an intimation sent to the assessee under sub-section (1) shall be deemed to be an order for the purposes of sections 246 and 264. Section 246 was also amended to provide that an appeal lies against an adjustment made u/s. 143(1) of the Act. 13. The purpose of this amendment was explained in a Board Circular as follows: "Direct appeal against prima facie adjustments - 50. Under the provisions of section 143(1) or 143(1B), the Assessing Officer can make certain prima facie adjustments to the income or loss declared in a return of income. The assessee is required to pay tax on the enhanced income and is also liable to pay additional tax under section 143(1A) where there is such an enhancement of income or reduction of loss. There was, however, no right of appeal against the prima facie adjustments and consequential levy of tax and additional ....
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....then only the assessee could file an appeal against the original adjustments contained in the intimation. 50.2 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. In view of this amendment, the proviso to section 154(2) relating to filing of appeal against intimation in respect of which no order of rectification is passed by the Assessing Officer within the specified period, has been omitted. 50.3 These amendments take effect from1st June, 1994 and will, accordingly, apply to all intimations under section 143(1) or 143(1B) received by the assessee on or after1st June, 1994." 15. As already stated the provisions of section 143(1) were later substituted by Finance Act, 1999 w.e.f.1-6-99. The purpose of the said substitution was explained in a Board Circular as follows: "46. Simplification of procedure of processing of return under sub-section (1) of section 143 and doing away with prima facie adjustment, 46,1 Under the existing provisions of the Income-tax Act, all the returns field are pro....
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....t the assessee, where the assessee denies his liability to be assessed under this Act, or an intimation under sub-section (1) or sub-section (1B) of section 143, where the assessee objects to the making of adjustments, or any order of assessment under sub-section (3) of section 143 or section 144, where the assessee objects to the amount of income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed; (the underlined portion was inserted by the Finance Act, 1994 w.e.f.1-6-1994.) The reference to the intimation in section 246 of the Act, is the intimation where an adjustment is made as per the law as it stood prior to1-6-99. It cannot have reference to an intimation u/s. 143(1) after the amendment of the section by the finance Act, 1999. The reason is after the finance Act, 1999, the AO has no power to make any adjustment to the returned income and can only compute tax and interest based on the income returned. The assessee, if he has any grievance against any wrong action on the part of the AO can seek other remedies open to it in law, but certainly cannot file an appeal u/s. 246. 17. We also find force....