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Issues Involved:
1. Whether the Assessing Officer was justified in issuing an intimation under section 143(1)(a) of the Income-tax Act, 1961, simultaneously with a notice under section 143(2) of the Act. Issue-wise Detailed Analysis: 1. Issuance of Intimation under Section 143(1)(a) Simultaneously with Notice under Section 143(2): The core issue was whether the Assessing Officer (AO) was justified in issuing an intimation under section 143(1)(a) while simultaneously issuing a notice under section 143(2) of the Income-tax Act, 1961. Background and Relevant Facts: - The AO issued an intimation under section 143(1)(a) on 24-11-1998, the same date he issued a notice under section 143(2). - The Judicial Member held that the intimation was issued after the AO decided to commence regular assessment proceedings, thus it was not in accordance with the law and should be canceled. - The Accountant Member disagreed, noting that the assessee did not raise a specific ground for cancellation of the intimation under section 143(1)(a) but inferred it from Ground No. 11, which challenged the application of section 143(1)(a) after the issuance of notice under section 143(2). Legal Precedents and Interpretations: - The Supreme Court in CIT v. Gujarat Electricity Board [2003] 260 ITR 841 (SC) clarified that once regular assessment proceedings under section 143(2) commence, there is no need for summary proceedings under section 143(1)(a). - The Calcutta High Court in Indian Aluminium Co. Ltd. v. Union of India [2004] 271 ITR 731 held that it is not possible for the AO to exercise powers under section 143(1) and section 143(2) simultaneously. Arguments and Observations: - The Judicial Member observed that the intimation was not issued in accordance with the law as it was subsequent to the decision to commence regular assessment proceedings. - The Accountant Member noted that both the intimation under section 143(1)(a) and the notice under section 143(2) were signed on the same date. He concluded that the intimation was signed prior to the notice based on the order sheet entries, thus validating the intimation. - The Third Member analyzed the statutory provisions and judicial precedents, emphasizing that the AO cannot simultaneously exercise powers under section 143(1)(a) and section 143(2). The case law from the Calcutta and Gujarat High Courts supported this view. Conclusion: - The Third Member concluded that the simultaneous issuance of intimation under section 143(1)(a) and notice under section 143(2) is not permissible. - The proceedings under section 143(1)(a) were held to be without jurisdiction, and the intimation was canceled. - The AO could carry on with the proceedings under section 143(3) of the Income-tax Act. Final Decision: - The appeal was allowed, agreeing with the Judicial Member's view that the intimation was contrary to the scheme of the Income-tax Act and liable to be canceled. - The matter was directed to be placed before the regular Bench for disposal in accordance with the law.
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