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TMI Blog1995 (11) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the same amount of loss. A fresh intimation under section 143(1) (a) was sent to the assessee on 26-7-1993 determining the total income of the assessee at Rs. 11,04,130 by recomputing the deduction under section 80HHC at Rs. 53,27,408 as against Rs. 66,37,879 claimed by the assessee. This adjustment was made by taking into consideration both the manufacturing and the trading activities together. An additional tax of Rs. 1,43,095 was accordingly levied under section 143(1A) of the Income-tax Act. 3. The assessee moved an application under section 154 raising the following objections, inter alia : " 1. Assessment under section 143(1)(a) shall not be made on a return filed under section 148 of the Act as the same cannot be treated as voluntary return required to be flied under section 139(1). 2. Further action under section 143(1A)(b) do not stipulate the levy of addl. tax for an asst. made under section 147. 3. Our claim for deduction made under section 80HHC of the Act, computing separate deduction for the two businesses is a question of law and shall not fall within the purview of 'prima facie adjustments'. " The request of the assessee was, however, rejected by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation under section 80HHC. In view of the above, I have to conclude here that I am unable to agree to the submissions made by the learned representative. In the result, the order by the Assessing Officer on this point gets sustained. 3. The second ground of appeal is against the charging of additional tax. It was argued by the learned representative that the additional tax cannot be charged in this case under section 143(1)(a), because the adjustment made by the Assessing Officer was not permissible under the law. After perusing the facts on record, I find that the Assessing Officer was completely within the four corners of law while making the adjustment as his action with regard to the computation under section 80HHC was legally correct. Hence no interference is called for with the Assessing Officer's order on this point. In the circumstances the additional tax levied by the Assessing Officer is in order. " 6. Aggrieved by the order of the CIT(Appeals), the assessee has filed second appeal before the Tribunal. The present appeal before us is with regard to the order under section 154. Two issues are raised before us : one is against the power of the Assessing Officer to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice of demand under section 156 ; (ii) in a case where the additional income-tax is reduced, the excess amount paid, if any, shall be refunded. Explanation : For the purposes of this sub-section, 'tax payable on such excess amount' means,-- (i) in any case where the amount of adjustments made under the first proviso to clause (a) of sub-section (1) exceeded the total income, the tax that would have been chargeable had the amount of the adjustments been the total income ; (ii) in any other case, the difference between the tax on the total income and the tax that would have been chargeable had such total income been reduced by the amount of adjustments. " On a plain reading of this section, it appears to us that this section applies to a case where the income declared by the assessee is increased or the loss returned is reduced or converted into income as a result of adjustment made under the first proviso to clause (a) of sub-section (1). The additional tax so charged is to be reduced/increased on variation of income as a result of an order under section 154, 250, 254, 260, 262, 263 or 264. It does not as such provide for computation of total income in a proceeding und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue of a notice under section 139(2) was dispensed with and was not there for the year under consideration. It was, therefore, submitted that the provisions of section 143(1)(a) are not applicable and consequently no intimation could be sent by making adjustments as stated in the first proviso thereunder, and if that be so, the provisions of section 143(1A) would not come into operation. We do not find any merit in this contention of the assessee. Section 148, by the issue of notice whereunder the assessee was required to file a return, reads as under : " 148(1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, not being less than thirty days, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed ; and the provisions of this Act shall so far as may be, apply according ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be deemed to have failed to furnish the return of his total income and the provisions of section 28, so far as may be, shall apply accordingly. Their Lordships held that by a legal fiction the failure to send an estimate of the tax under section 18A(3) was treated as a failure to furnish return of income under section 22. It was, therefore, held that the fiction under section 18A(9)(b) that failure to send an estimate under section 18A(3) is to be deemed to be a failure to send a return must mean that all those facts on which alone there could be a failure to send the return must be deemed to exist, and it must accordingly be taken that by reason of this fiction, the notices required to be given under section 22 must be deemed to have been given, and in that view, section 28 would apply on its own terms. Their Lordships. in this regard, extracted the following oft-quoted observations of Lord Asquith in East End Dwellings Co. Ltd. v. Finsbury Borough Council [1952] AC 109 : " If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible" in clause (iii) of the first proviso in its literal sense, as held by the Bombay High Court in the case of Khatau Junkar Ltd. v. K.S. Pathania [1992] 196 ITR 55, means "on the face of it ". Therefore, on the face of the return and accounts and documents accompanying it, the deduction must be inadmissible. Only then can it be disallowed under the proviso to section 143(1)(a). If any further enquiry is necessary or if the Assessing Officer, feels that further proof is required in connection with the claim for deduction, he will have to issue a notice under sub-section (2) of section 143. The use of the phrase "prima facie" thus indicates that there is no possibility of an alternative consideration of the nature of loss, deduction, allowance or relief claimed, for it is on the face of it inadmissible. 11.1 The Supreme Court in the case of Management of the Bangalore Woollen Cotton Silk Mills Ltd. v. B. Dasappa AIR 1960 SC 1352, held that a prima facie case does not mean a case proved to the hilt but a case which may be said to be established, if evidence which is led in support of the same is believed. Therefore, if on the basis of the information avalable on record it can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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