1995 (5) TMI 54 - AT - Income Tax

Summary

Issues:
- Interpretation of provisions under section 143(1) and 143(2)(a) of the Income-tax Act
- Validity of rectification application under section 154 in case of assessment under section 143(1)
- Jurisdiction of Assessing Officer in making adjustments not permitted by law
- Availability of multiple remedies to assessee under the Income-tax Act

Analysis:

The judgment by the Appellate Tribunal ITAT Chandigarh involved an appeal by the Revenue regarding the assessment year 1984-85, focusing on the interpretation of provisions under section 143(1) of the Income-tax Act. The Assessing Officer had included revised share income from a firm in the assessment, leading to a significant increase in the total income of the assessee. The assessee did not object under section 143(2)(a) but filed a rectification application under section 154, which was rejected by the Assessing Officer citing procedural grounds.

The learned CIT (Appeals) accepted the assessee's plea, emphasizing that the assessment made under section 143(1) by enhancing income, not warranted in law, constituted a mistake apparent from the record eligible for rectification. The Departmental Representative argued that the only remedy available to the assessee was to file an objection under section 143(2)(a) and that rectification under section 154 was impermissible unless a mistake was evident.

The Tribunal examined the Assessing Officer's jurisdiction in making adjustments not permitted by law under section 143(1)(b) and concluded that substituting revised share income without following proper procedures was not permissible. The Tribunal highlighted that the assessee had the right to seek rectification under section 154 for mistakes apparent from the record, even if no objection was filed under section 143(2)(a). The Tribunal emphasized that various remedies were available to the assessee under the Income-tax Act, and the choice of remedy was at the assessee's discretion, which could not be questioned.

Ultimately, the Tribunal upheld the decision of the CIT (Appeals) and dismissed the Revenue's appeal, emphasizing that the assessee's chosen remedy of filing a rectification application under section 154 was valid and permitted by law, despite the absence of an objection under section 143(2)(a). The judgment clarified the availability of multiple remedies to the assessee in cases where the Assessing Officer exceeds jurisdiction or makes adjustments not authorized by law, affirming the assessee's right to seek redressal through appropriate legal channels.