1986 (5) TMI 78 - AT - Income Tax

Summary

Issues:
1. Dispute regarding the annulment of assessment under section 155 of the Income-tax Act, 1961 based on the filing of Form No. 6A against the assessment made under section 143(1) of the Act.

Analysis:
The appeal involved a dispute over whether the Additional Commissioner of Income Tax (AAC) was justified in annulling the assessment under section 155 of the Income-tax Act, 1961, based on the assessee filing Form No. 6A against the assessment made under section 143(1) of the Act. The Departmental Representative argued that the filing of Form No. 6A does not automatically cancel the original assessment under section 143(1) and that corrections or objections raised by the assessee would be considered by the Income Tax Officer (ITO). On the other hand, the counsel for the assessee contended that the introduction of clause (d) in section 153(1) clarified that filing Form No. 6A would result in automatic cancellation of the assessment. The counsel relied on legislative intent and previous judgments to support this argument.

The Tribunal carefully considered the arguments presented by both parties and analyzed the relevant sections of the Income-tax Act, including sections 143(1) and (2), as well as the Explanation related to the introduction of clause (d) in section 153(1) effective from 1-10-1984. The Tribunal noted that while the Act provides for the assessee to raise objections within a specified period using Form No. 6A, it does not automatically cancel the original assessment under section 143(1) unless specific provisions exist, such as in the case of assessments made under section 144. The Tribunal emphasized that the ITO is required to consider objections raised by the assessee and make corrections to the assessment as necessary, as outlined in the relevant sections of the Act.

The Tribunal also referred to the Explanation related to the addition of clause (d) in section 153(1), which allowed for corrections to be made within a specific timeframe after receiving objections in Form No. 6A. The Tribunal concluded that Form No. 6A does not automatically cancel the assessment and that the ITO is obligated to consider objections and make necessary corrections within the prescribed period. Relying on legal precedents, including the Supreme Court decision in Kapurchand Shrimal, the Tribunal quashed the AAC's order annulling the assessment and reinstated the ITO's order.

In light of the analysis and legal principles discussed, the departmental appeal was allowed, and the Tribunal upheld the original assessment made by the ITO, rejecting the annulment by the AAC based on the filing of Form No. 6A.