1999 (11) TMI 739 - AT - Income Tax

Summary

Issues:
Revenue's appeal against deletion of additional tax charged under section 154 on rectification of intimation sent under section 143(1A).

Analysis:
1. The Assessing Officer rectified the intimation under section 143(1)(a) by making prima facie adjustments regarding depreciation and investment allowance. The additional tax was charged based on these adjustments.

2. The CIT(A) held that making prima facie adjustments based on materials collected during regular assessment proceedings under section 143(3) was incorrect. Citing case laws, the CIT(A) canceled the additional tax as the return declared a loss even after adjustments.

3. The revenue appealed to the Tribunal, arguing that the adjustments were justified under section 143(1)(a) and the reduced loss should be treated as income for tax purposes.

4. The ARs. of the assessee contended that issuing a notice under section 154 after initiating regular assessment proceedings was unjustified. They argued that past records couldn't be used for adjustments under section 143(1)(a).

5. The ARs. further argued that the prima facie adjustments were not warranted by section 143(1)(a) and referenced CBDT guidelines and circulars to support their stance.

6. The Tribunal upheld the CIT(A)'s decision, stating that the adjustments made by the Assessing Officer were not proper under section 143(1)(a). Consulting past records for adjustments and issuing a notice under section 154 were deemed unjustified.

7. The Tribunal dismissed the revenue's appeal, affirming the CIT(A)'s decision to cancel the levy of additional tax. The adjustments made were found to be unwarranted under the provisions of section 143(1)(a) of the Act.