2004 (2) TMI 16 - HC - Income Tax

Intimation issued under sub-section (1) of section 143 - During the pendency of the writ petition steps as were contemplated under sub-section (3) of section 143 of the Act were taken, and I am told, that the same has reached a conclusion. However, by reason of the interim order passed on the present writ petition by this court, the same could not be given effect to. The petitioner cannot take advantage of both the situations. He should not have approached this court for an injunction restraining the conclusion of the proceedings under sub-section (3) of section 143 of the Act. - Be that as it may, that injunction order is vacated, the Revenue is directed to give effect to the conclusion reached in terms of sub-section (3) of section 143 of the Act forthwith - Writ petition succeeds. The impugned intimation is quashed.

Issues:
1. Interpretation of Section 143(1) and Section 143(2) of the Income-tax Act, 1961 regarding intimation and notice of demand.
2. Simultaneous issuance of intimation under Section 143(1) and notice under Section 143(2) of the Act.
3. Challenge to the intimation issued under Section 143(1) of the Act.
4. Estoppel by conduct in challenging the intimation.
5. Quashing of the impugned intimation in the writ petition.
6. Effect of interim order on proceedings under sub-section (3) of Section 143 of the Act.
7. Exemption of time for limitation purposes during the pendency of the writ petition.
8. Final assessment under sub-section (3) of Section 143 not being the subject matter of the writ petition.

Analysis:

1. The judgment delves into the provisions of Section 143(1) and Section 143(2) of the Income-tax Act, 1961, which deal with the issuance of intimation and notice of demand by the Assessing Officer. The court emphasizes that an intimation sent under Section 143(1) requires the assessee to pay the specified amount within 30 days, failing which interest becomes payable. The provisions under Section 143(2) empower the Assessing Officer to issue a notice if necessary to ensure accurate tax assessment, leading to a regular assessment of the liability.

2. The court scrutinizes the scenario where both an intimation under Section 143(1) and a notice under Section 143(2) were issued simultaneously. It highlights the distinct nature of actions under these subsections, where the former concludes the matter while the latter initiates the assessment process. The judgment questions the validity of such simultaneous actions by the Assessing Officer and concludes that the intimation challenged in the writ petition cannot be upheld in such circumstances.

3. The challenge to the intimation issued under Section 143(1) forms a crucial aspect of the judgment. The court rules in favor of the assessee, finding that the intimation was not sustainable due to the procedural irregularity arising from the simultaneous issuance with the notice under Section 143(2).

4. The principle of estoppel by conduct is discussed concerning the assessee's actions in rectifying mistakes in the intimation. The court determines that the assessee's conduct did not amount to upholding the intimation as correct, thus rejecting the application of estoppel by representation in this case.

5. Ultimately, the court quashes the impugned intimation in the writ petition, providing relief to the assessee based on the procedural and legal analysis presented in the judgment.

6. The judgment addresses the effect of an interim order on the proceedings under sub-section (3) of Section 143 of the Act, emphasizing that the conclusion reached in those proceedings should be given effect promptly once the injunction is lifted.

7. To account for the time during which the proceedings were stayed due to the writ petition, the court exempts this period for limitation purposes, ensuring fairness in the assessment process.

8. The judgment clarifies that the final assessment made under sub-section (3) of Section 143 is not the subject matter of the writ petition, leaving room for the concerned parties to take appropriate steps regarding that assessment separately.

In conclusion, the detailed analysis of the legal judgment sheds light on the interpretation of relevant sections of the Income-tax Act, procedural irregularities, estoppel by conduct considerations, and the ultimate quashing of the intimation challenged in the writ petition.

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