2005 (9) TMI 52 - HC - Income Tax

Whether the Assessing Officer after issuance of notice for regular assessment under section 143(2) was justified in issuing intimation under section 143(1)(a) - petitioners submitted that in the light of the decision of the apex court in the case of CIT v. Gujarat Electricity Board, it was not open to the Assessing Officer to issue intimation under section 143(1)(a) of the Income-tax Act after issuance of the notice for regular assessment under section 143(2) - issue raised in the petition is squarely concluded by the aforesaid judgment of the apex court. Accordingly, the petition succeeds

Summary

Issues:
Whether the Assessing Officer can issue an intimation under section 143(1)(a) of the Income-tax Act after issuing a notice for regular assessment under section 143(2) of the Income-tax Act.

Analysis:
The case pertains to the assessment year 1989-90, where the petitioner filed a return claiming deduction for expenditure on acquiring technical know-how. An intimation under section 143(1)(a) was initially issued by the Assessing Officer, accepting the return. Subsequently, the Assessing Officer rectified the intimation under section 154, disallowing the expenditure on technical know-how as capital expenditure. In response, the petitioner filed a revised return seeking deduction under various sections of the Income-tax Act by treating the expenditure as acquisition of the plant.

The Assessing Officer then issued a notice under section 143(2) calling for documents and evidence related to the revised return. However, instead of passing a regular assessment order under section 143(3), the Assessing Officer issued another intimation under section 143(1)(a), making adjustments without considering the petitioner's claim. The petitioner challenged this subsequent intimation, arguing that it was not permissible after the issuance of a notice for regular assessment.

The petitioner's counsel relied on a Supreme Court decision to support their argument that issuing an intimation under section 143(1)(a) after a notice for regular assessment under section 143(2) was not allowed. The Revenue's counsel conceded to this position, acknowledging the binding nature of the apex court's decision on the issue. Consequently, the court held that the intimation issued after the notice for regular assessment was not sustainable and quashed it.

In conclusion, the court found in favor of the petitioner, setting aside the impugned intimation dated July 29, 1991. The rule was made absolute in favor of the petitioner with no order as to costs.