2015 (7) TMI 161

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ion. The Ld.counsel placed his reliance on the judgment of the Delhi High Court in CIT v. Orient Craft Ltd. (2013) 354 ITR 536. According to the Ld. counsel, the assessee is a partnership firm dealing in real estate business. The assessee is managing properties apart from buying and selling of lands and leasing/letting out of properties. The assessee claimed rental income from the properties as income from business. However, the Assessing Officer disallowed the claim of the assessee. The CIT(Appeals) also confirmed the order of the Assessing Officer. According to the Ld. counsel, the business of the assessee is letting out of the properties, therefore, the CIT(Appeals) is not justified in confirming the order of the Assessing Officer. Referring to the judgment of the Apex Court in Chennai Properties & Investments Ltd. v. CIT (2015) (5) TMI 46, the Ld.counsel submitted that the object of the assessee-company before the Apex Court is to acquire properties in the city of Madras and let out those properties. The assessee received rental income therefrom and showed as business income in the return filed. The Assessing Officer, however, treated the same as income from house properties. T....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rial came to the knowledge of the Assessing Officer other than the one which was filed along with the return of income. Therefore, contention of the Ld.counsel is that there was a change of opinion. The Ld.counsel placed his reliance on the judgment of Delhi High Court in the case of CIT v. Orient Craft Ltd. (2013) 354 ITR 536. The Delhi High Court, by placing reliance on the judgment of the Apex Court in CIT v. Kelvinator of India Ltd. (2010) 320 ITR 561, found that the Assessing Officer cannot change his opinion. The Delhi High Court further found that the satisfaction of the Assessing Officer with regard to escapement of income amounts to change of opinion even though the return was scrutinized under Section 143(1) of the Act. We have carefully gone through the provisions of Section 143(1) of the Act which reads as follows:- "(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely :- (a) the total income or loss shall be computed after making the following adjustments, namely :- (i) any arithmetical error in the return ; or (ii) an incorrect claim, i....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ct claim which is apparent on the information given in the return. The Assessing Officer is not expected to decide in respect of the issue which requires a discussion and examination. Therefore, the Assessing Officer is making a correction of arithmetic error and the claim which is apparent from the information available in the return. In the new scheme of intimation under Section 143(1) of the Act, the Assessing Officer is not expected to express any opinion on the issue raised by the assessee. In other words, the Assessing Officer cannot express any opinion while processing the return under Section 143(1) of the Act. This is a radical change made by the Parliament with effect from 1.4.1989. Since the Assessing Officer cannot make any adjustment with regard to an issue which is debatable in nature, this Tribunal is of the considered opinion that the Assessing Officer cannot express any opinion in a proceeding under Section 143(1) of the Act. Therefore, the judgment of the Apex Court in Kelvinator of India Ltd. (supra) and the judgment of the Delhi High Court in Orient Kraft Ltd. (supra) are not applicable to the facts of the case. In fact, the Apex Court in ACIT v. Rajesh Jhaveri ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....June 1, 1999, by the Explanation as introduced by the Finance (No. 2) Act of 1991 an intimation sent to the assessee under section 143(1)(a) was deemed to be an order for the purposes of section 246 between June 1, 1994 and May 31, 1999, and under section 264 between October 1, 1991, and May 31, 1999. It is to be noted that the expressions "intimation" and "assessment order" have been used at different places. The contextual difference between the two expressions has to be understood in the context the expressions are used. Assessment is used as meaning sometimes "the computation of income", sometimes "the determination of the amount of tax payable" and sometimes "the whole procedure laid down in the Act for imposing liability upon the tax payer". In the scheme of things, as noted above, the intimation under section 143(1)(a) cannot be treated to be an order of assessment. The distinction is also well brought out by the statutory provisions as they stood at different points of time. Under section 143(1)(a) as it stood prior to April 1, 1989, the Assessing Officer had to pass an assessment order if he decided to accept the return, but under the amended provision, the requirement of ....