TaxTMI 
TaxTMI 
1983 (9) TMI 114
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....r rate and that expenses towards gratuity were wrongly allowed. He issued a show-cause notice dated 10-7-1979 asking the assessee to state his reasons as to why the assessment made under section 143(1) should not be rectified under section 154 or 155 of the Act in order to correct the aforesaid mistakes. The date of hearing was fixed on 23-7-1979. On 19-7-1979, the assessee requested for ten days' time on the ground that the person who looked after the income-tax affairs of the assessee was out of India. This application dated 19-7-1979 was duly received in the office of the ITO as per receipt dated 20-7-1979 stamped on the office copy of the letter in the possession of the assessee. However, the ITO passed the order under section 154. This....
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....not under section 154. (iii) As the action under section 154 was taken and completed before the expiry of limitation under section 153, the ITO should approach the IAC for seeking permission to resort to the provisions of section 143(2)(b) and if his IAC permits him to issue a notice under section 143(2)(b) he should rectify the mistake and pass a fresh order." 4. The assessee has accepted the above decision of the AAC ; but, the department has come in appeal against the aforesaid order on the following grounds : " 1. On the facts and in the circumstances of the case, the learned AAC erred in vacating the order passed under section 154 of the Income-tax Act, 1961. 2. On the facts and in the circumstances of the case, the learned AAC ....
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....quires verification or reconsideration, then section 143(2) provides for that contingency. Section 143(3) refers to making the assessment once again after the original assessment under section 143(1) was reopened for reconsideration at the instance of either party. The Explanation to section 143(3) states the circumstances under which the original assessment made under section 143(1) shall be deemed to be incorrect, inadequate or incomplete in a material respect. One of those circumstances has been stated to be the over allowance of depreciation as has happened in this case. Another circumstance is when the total income determined under section 143(1) is less than the amount of the total income on which the assessee is properly chargeable a....