1998 (2) TMI 153 - AT - Income Tax

Summary

Issues:
1. Deletion of disallowance under section 43B of the Income Tax Act.
2. Validity of issuing an intimation under section 143(1)(a) after a notice under section 143(2).

Detailed Analysis:

Issue 1: Deletion of disallowance under section 43B of the Income Tax Act
The Revenue appealed against the CIT(Appeals) order regarding the deletion of a disallowance of Rs. 5,44,062 under section 43B of the Income Tax Act. The Revenue contended that the CIT(Appeals) erred in deleting the disallowance based on the lack of evidence of payment, as the first proviso to section 43B requires evidence of payment to be furnished along with the return. The Revenue argued that the CIT(Appeals) overlooked this provision and their order should be revised. The Revenue further emphasized that the CIT(Appeals) misinterpreted the proviso to section 43B and requested the addition of Rs. 5,44,062 to be confirmed. The Tribunal agreed with the Revenue, stating that the relief given by the CIT(Appeals) was incorrect and could not be upheld. Therefore, the appeal by the Revenue was allowed.

Issue 2: Validity of issuing an intimation under section 143(1)(a) after a notice under section 143(2)
The assessee raised a new ground before the Tribunal, arguing that an intimation under section 143(1)(a) cannot be sent after the issuance of a notice under section 143(2) of the Income Tax Act. The assessee relied on the decision of the Calcutta High Court and contended that adjustments made under section 143(1)(a) were not allowable due to subsequent amendments to the Act. The Revenue, on the other hand, argued that there is no provision in the Act preventing the issuance of an intimation after a notice under section 143(2). The Revenue highlighted the clear provisions of the Income Tax Act regarding the timelines for issuing notices under section 143(2) and intimations under section 143(1)(a). The Tribunal agreed with the Revenue's arguments, stating that the Calcutta High Court decision cited by the assessee was not in conformity with the Act's provisions. The Tribunal concluded that the restriction imposed by the Calcutta High Court decision did not stand in light of the clear provisions of the Income Tax Act. Therefore, the Tribunal held in favor of the Revenue and allowed the appeal.

In conclusion, the Tribunal upheld the Revenue's appeal regarding the deletion of disallowance under section 43B and the validity of issuing an intimation under section 143(1)(a) after a notice under section 143(2). The Tribunal found that the CIT(Appeals) erred in their decisions, and the relief granted to the assessee was deemed incorrect and not sustainable under the provisions of the Income Tax Act.