TaxTMI 
TaxTMI 
2001 (2) TMI 126
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....r, 1990. Subsequently, a notice for taking action under section 154 of the Act was issued on February 28, 1991. The assessee submitted its reply on March 21, 1991, taking the stand that there was no scope for taking any action under section 154. On March 27, 1991, a revised return was filed by the assessee. Rejecting the assessee's plea that after issuance of notice under section 143(2) of the Act, as well as on the facts, there was no case for resorting to section 154, an order under section 154 was passed. In the order under section 154, the Income-tax Officer decided the question as to how profits under section 115J of the Act was to be undertaken and passed an order determining the taxable book profit of Rs. 8,58,21,204. It was held that there was a mistake which was apparent from the record and rectifiable under section 154. The assessee filed an appeal before the Commissioner of Income-tax (Appeals) (in short, the CIT(A)). The said authority held that the matter was not one which involved any interpretation of law but one of inclusion or non inclusion of certain items for calculating the book profit under section 115J. As the language of section 115J is very clear, regard....
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....he Income-tax Appellate Tribunal is perverse and contrary to law ? (f) Whether the Assessing Officer was justified in recomputing the book profit under section 154/143(1)(a) for the purpose of section 115J in the light of the fact that notice under section 143(2) had already been issued ? (g) Whether the Income-tax Appellate Tribunal is correct in law in holding that once notice under section 143(2) has been issued, recourse to section 154 is not warranted ? (h) Whether sections 154 and 143(2) ire mutually exclusive or not ? (i) Whether the interpretation put forward by the Assessing Officer with reference to computation of book profits under section 115J is correct ? (j) Whether principles of natural justice are violated if recourse to section 154 is taken and to rectify intimation under section 143(1)(a) when proceedings under section 143(2) are going on ? 4. According to learned counsel for the Revenue, the Tribunal fell into grave error in holding that after notice under section 143(2) has been issued, there was no scope for rectifying the intimation under section 143(1) of the Act. 5. Section 143(1) as it stood before and afte....
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....h he has gathered, the Assessing officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment. (4) Where a regular assessment under sub-section (3) of this section or section 144 is made, --- (a) any tax or interest paid by the assessee under sub-section (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-section (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." BEFORE AMENDMENT : Section 143(1) as it stood at the point of time when the intimation was given under the said provision, under section 139, or in response to a notice under sub-section (1) so far as relevant, read as follows : "143. (1)(a) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, --- (i) if any tax or....
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.... due, 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 pro visions of this Act shall apply accordingly, and (ii) if any refund is due, it shall be granted to the assessee : Provided that an intimation for any tax or interest due under this clause shall not be sent after the expiry of four years from the end of the financial year in which any such order was passed. (c) Where the assessee is a partner of a firm or a member of an association of persons or body of individuals and as a result of the adjustments made under the first proviso to clause (a) of sub-section (1) in the income or loss declared in the return made by the firm, association or body, as the case may be, or as a result of an order made under sub-section (3) of this section or section 144 or section 147 or section 154 or section 155 or sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5) of section 185 or sub-section (1) or sub-section (2) of section 186 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264, or any....
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...., --- (i) in any case where the amount of adjustments made under the first proviso to clause (a) of sub-section (1) exceed the total income, the tax that would have been chargeable had the amount of the adjustments been the total income ; (ii) in any other case, the difference between the tax on the total income and the tax that would have been chargeable had such total income been reduced by the amount of adjustments . . . (2) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall, if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced there, any evidence on which the assessee may rely in support of the return : Provided that no notice under this sub-section shall be served on the assessee after the expiry of the financial year in which the return is furnished or the expiry of six months from ....
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.... due on the basis of such return after adjustment of tax deducted at source, any advance tax or any amount paid otherwise by way of tax or interest, an intimation was to be sent without prejudice to the provisions of section 143(2) to the assessee specifying the sum so payable and such intimation was deemed to be a notice of demand issued under section 156. The first proviso to section 143(1)(a) allowed the Department to make certain adjustments in the income or loss declared in the return. They were as follows : (b) an arithmetical errors in the return, accounts and documents accompanying it were to be rectified ; (c) any loss carried forward, deduction, allowance or relief, which, on the basis of the information available in such return, accounts or documents, was prima facie admissible, but which was not claimed in the return, was to be allowed ; (d) any loss carried forward, relief claimed in the return, which, on the basis of the information as available in such return, accounts or documents were prima facie inadmissible, was to be disallowed. One thing further to be noticed is that intimation under section 143(1)(a) is given without prejudice to ....
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....999, 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 taxpayer". 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 passing of an assessment order has been dispensed with and instead an intimation is required to be sent. Various circulars sent by the Central Board of Direct Taxes spell out the intents of the Legislature, i.e., to minimize the Depar....