2015 (2) TMI 621 - AT - Income Tax

Rectification of mistake - application to amend intimation on the point of limitations rejected - Held that - The provision to rectify any mistake apparent from the record by an Income-tax authority is separately envisaged in Clause (b) and (c) of sub-section (1) of section 154, clause (a) talks about order passed whereas clause (b) of sub-section 1 of section 154 envisages amendment of any intimation/ deemed intimation under subsection 1 of section 143(1), whereas section 154(7) as reproduced in earlier part of this order stipulates time limit of four years from the end of the financial year in which the order to be amended was passed, since it talks about order , and intimation cannot be termed as order especially when separate provision for amendment of an order and amendment of intimation/deemed intimation is there, therefore, the action of Assessing Officer in rejecting the applications moved under section 154 to amend intimation on the point of limitations, in our considered view, is not just and proper. As such while accepting the appeal of the assessee we set aside the orders of both the authorities and restore the matter back to the file of the Assessing Officer with a direction that he shall consider and decide the application of the assessee on merits and pass order after giving due opportunity of hearing to the assessee. - Decided in favour of assessee

Summary

Issues:
1. Whether an intimation under section 143(1)(a) can be treated as an order under section 154(7) of the Income-tax Act, 1961?

Detailed Analysis:
The appeal in this case arose from an order by the CIT(A)-IX, New Delhi for the assessment year 2003-04. The single ground of appeal was related to the treatment of an intimation under section 143(1)(a) as an order under section 154(7) of the Income-tax Act, 1961. The assessee contended that the intimation cannot be considered an order and therefore, the restriction of amendment within four years under section 154(7) should not apply to it.

The assessee had filed the return of income for the assessment year 2003-04, which was processed under section 143(1) of the Act. Subsequently, a demand was raised, and the assessee claimed that no intimation or demand notice was served. The assessee's application under section 154 for rectification was rejected based on the four-year limitation specified in section 154(7) of the Act.

The assessee argued that the intimation under section 143(1)(a) is not an order but a computation of tax, citing relevant provisions of the Income-tax Act. The CIT(A) upheld the Assessing Officer's decision, stating that the intimation can be treated as an order under section 154(7) and distinguished a previous judgment regarding the treatment of intimation as an order.

On further appeal, the Tribunal held that since separate provisions exist for amending an order and amending an intimation under section 143(1), the time limit of four years under section 154(7) applies to orders and not intimation. Therefore, the rejection of the application by the Assessing Officer based on the limitation period was deemed unjust, and the matter was remanded back to the Assessing Officer for a decision on the merits.

In conclusion, the Tribunal accepted the appeal of the assessee, emphasizing the distinction between orders and intimation under the Income-tax Act, and directed the Assessing Officer to reconsider the application for rectification on its merits after providing an opportunity for a hearing to the assessee.