TaxTMI 
TaxTMI 
2003 (4) TMI 83
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....t there was carry forward loss. In respect of each of the aforesaid assessment years notices under section 143(2) of the Income-tax Act were issued and regular assessment under section 143(3) of the Income-tax Act disallowing the appropriation to contingency reserve was made for the assessment years 1990-91 and 1992-93 against which appeals preferred by the petitioner are pending. In respect of the assessment year 1993-94 notice under section 143(2) of the Income-tax Act (hereinafter referred to as "the Act") was issued on December 20, 1994, and in respect of the assessment year 1994-95 the notice under section 143(2) of the Act was issued on November 27, 1995. The regular assessment in respect of the aforesaid two years is however pending. In respect of the aforesaid four several assessment years notices under section 154 of the Act were issued during the period between March 19, 1996 and March 22, 1996. Each of the aforesaid notices is issued on the same ground and is backed by a covering letter containing identical matter. It would be enough to read one of those notices and the concerned covering letter. The notice appearing at page 146 of the petition being part of annexure O ....
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.... not an allowable business expenditure. The said judgment was delivered on November 28, 1995, whereas the intimations under section 143(1)(a) were issued long prior thereto. He submitted that the question is "whether it is open to the Department to seek to rectify a regular assessment or a summary assessment on the ground of mistake apparent from the record based on a subsequent decision of the court?" He submitted that in an unreported judgment delivered by me in Matter No. 265 of 1995 (Geo Miller and Co. Ltd. v. Deputy CIT [2003] 262 ITR 237 (Cal)), the aforesaid question has been answered in the negative. He therefore submitted that the aforesaid notices under section 154 of the said Act should be quashed. He advanced an additional ground that in respect of the assessment years 1993-94 and 1994-95 notices have been issued under section 143(2) calling upon the assessee to produce evidence in support of its return for a regular assessment. According to Dr. Pal once such a notice is issued, intimation issued under section 143(1)(a) of the said Act cannot be rectified under section 154. In support of his submission, he has relied on a Division Bench judgment of this court in the c....
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....is not disputed by any one that the Income-tax Officer did have the jurisdiction to issue the show cause notice. What is disputed by the appellant is their liability to pay tax, on the basis of the facts alleged in the notice." In the case of Geo Miller and Co. Ltd. [2003] 262 ITR 237 (Cal), regular assessment made under section 143(3) of the said Act was sought to be rectified on the basis of a subsequent decision alleging that it was a mistake apparent from the record. This contention was negatived by me for reasons indicated therein which I need not reiterate. Admittedly, in the case of all the four assessment years notices under section 143(2) of the Act were issued and consequent thereto regular assessment in respect of the assessment years 199-91 and 1992-93 have been completed. In the case of CIT v. Coventry Spring and Co. Ltd. [2002] 257 ITR 632, a Division Bench of this court held as follows: "The question before us is as follows: "Whether, on the facts and in the circumstances of the case and in law, the Income-tax Appellate Tribunal is justified in holding that intimation issued under section 143(1)(a) cannot be rectified under section 154 after issue of notice unde....
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.... v. Deputy CIT [1996] 222 ITR 140 and, therefore, the High Court was right in holding that a substantial question of law did not arise for determination. Mr. T.L.V. Iyer, learned senior counsel for the appellant submits that the question needs to be decided by this court. Learned counsel appearing for the respondents have pointed out that in a number of judgments several High Courts have consistently taken the view that once regular assessment proceedings have commenced under section 143(2) of the Income-tax Act, 1961, it is a limitation on the jurisdiction of the Assessing Officer to commence proceedings under-section 143(1)(a) of the Act. Even otherwise, the view taken by the Gujarat High Court seems to be correct on principle. There is no dispute that section 143(1)(a) of the Act enacts a summary procedure for quick collection of tax and quick refunds. Under the scheme if there is a serious objection to any of the orders made by the Assessing Officer determining the income, it is open to the assessee to ask for rectification under section 154. Apart therefrom, the provisions of section 143(1)(a)(i) indicate that the intimation sent under section 143(1)(a) shall be without prej....
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....in respect of the assessment years 1990-91 and 1992-93. The only order which is effective and operative is the one passed under section 143(3) of the Act. The order passed under section 143(1)(a) ceased to be operative and merged in the final order. I am supported in my view by the following judgments. In the case of CIT v. Amritlal Bhogilal and Co. [1958] 34 ITR 130 (SC), their Lordships stated the law with regard to merger as follows: "There can be no doubt that, if an appeal is provided against an order passed by a Tribunal, the decision of the appellate authority is the operative decision in law. If the appellate authority modifies or reverses the decision of the Tribunal, it is obvious that it is the appellate decision that is effective and can be enforced. In law the position would be just the same even if the appellate decision merely confirms the decision of the Tribunal. As a result of the confirmation or affirmance of the decision of the Tribunal by the appellate authority the original decision merges in the appellate decision and it is the appellate decision alone which subsists and is operative and capable of enforcement." True, it is that in the above case, their Lo....
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....of raising a demand on the assessee or obliging the Department to make a refund to the assessee. Where, however, the order under section 143(1)(a) is followed by a regular assessment under section 143(3), the order under section 143(1)(a) in so far as it is contrary to the regular assessment under section 143(3), ceases to be executable and becomes ineffective." It follows that the effective and operative order is the one under section 143(3) of the Act and therefore the question of seeking to rectify the order under section 143(1)(a) of the Act can never arise. In so far as the submission of Mr. Saha made on the basis of the circular issued by the Central Board of Direct Taxes, that a subsequent judgment may furnish the assessing authority with the jurisdiction to rectify an order on the ground of mistake apparent from the record, I think it would be apposite to read the relevant portion of the judgment in the case of Hindustan Aeronautics Ltd. v. CIT [2000] 243 ITR 808 (SC). In paragraph 6, their Lordships laid down the law in this regard as follows: "However, learned counsel for the appellant relied on the decisions in Navnit Lal C. Javeri v. K.K. Sen, AAC of I.T. [1965] 56 ....