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TMI Blog2010 (10) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... ANT MEMBER J. A.K. Mehta for the Appellant. F.V. Irani for the Respondent. ORDER Per N.V. Vasudevan Judicial Member : This is an appeal by the revenue against the order dated29/10/2008of CIT(A)-I, Mumbai relating to assessment year 2006-07. The grounds of appeal raised by the revenue read a follows : "1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding the intimation issued u/s. 143(1)( a ) after issued of notice u/s. 143(2) as illegal without appreciating the fact that the order is passed u/s. 143(1) of the Act and not u/s 143(l)( a ) of the Act. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the decision of Hon'ble Supreme Court in the case of Gujarat Poly-AVX Electronics Ltd. v. DCIT 222 ITR 140 is not applicable on order passed u/s. 143(1) of the Act. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the appeal field by the assesses before the CIT(A) is not maintainable because there is no prejudice caused by the order u/s. 143(1) of the Act to the assessee as vide the same order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ggrieved by the order of the CIT(A) the revenue is in appeal before the Tribunal. 5. We have heard the submissions of the ld. D.R. who submitted that the decision of the Hon ble Supreme Court in the case of Gujarat Electricity (Supra) referred to by the CIT(A) related to a period when provisions of section 143(1)( a ) of the Act existed. Under those provisions the Assessing Officer had the power to make a prima facie adjustment to a return of income field by the assessee. It was submitted by him that the provisions of section 143(1)( a ) were substituted by the Finance Act, 1999 w.e.f. 1/6/1999. As per amended provisions the Assessing Officer does not have any power to make prima facie adjustment to a return of income field by the assessee while issuing intimation under section 143(1). It was further submitted that as per the provisions of section 143(1)( a ) as it existed upto 1/6/1999 the right of appeal was also provided against an intimation under section 143(1)( a ) of the Act. Explanation to section 143 gave a right of appeal to assessee against an intimation under section 143(1)( a ) of the Act. By the very amendment act section 246(1)( a ) was also amended whereby a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so payable, and such intimation shall be deemed to be a notice of demand issued under section 156 and all the provisions of this Act shall apply accordingly ; and ( ii ) if any refund is due on the basis of such return, it shall be granted to the assessee and an intimation to this effect shall be sent to the assessee : Provided that except as otherwise provided in this sub-section, the acknowledgment of the return shall be deemed to be intimation under this sub-section where either no sum is payable by the assessee or no refund is due to him :" 9. Prior to such substitution as above, the provisions of Section 143(1) read as follows; 143. Assessment. (1)( a ) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, ( i ) if any tax or interest is found due on the basis of such return, after adjustment of any tax deducted at source, any advance tax paid and any amount paid otherwise by way of tax or interest, then, without prejudice to the provisions of sub-section (2), an intimation shall be sent to the assessee specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder sub-section (1) of section 143, or enhance or reduce the amount of refund granted by it under that sub-section. (2) Subject to the other provisions of this section, the authority concerned ( a ) may make an amendment under sub-section (1) of its own motion, and ( b ) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee, and where the authority concerned is the Deputy Commissioner (Appeals) or the Commissioner (Appeals), by the Assessing Officer also. Provided that the Assessing Officer shall make an amendment for rectifying any mistake, which has been brought to his notice by the assessee in relation to an intimation referred to in clause ( b ) of sub-section (1), within a period of three months from the end of the month in which it is so brought to his notice and if no such amendment is made within the said period of three months, the assesses may appeal to the Deputy Commissioner (Appeals) or, as the case may be Commissioner (Appeals) against such intimation and the provisions of section 246 and section 249 shall have effect as if the said intimation were an order for the purposes of those sections. 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst prima facie adjustment 50. Under the provisions of section 143(1) or 143(1B), the Assessing Officer can make certain prima facie adjustments to the income or loss declared in a return of income. The assessee is required to pay tax on the enhanced income and is also liable to pay additional tax under section 143(1A) where there is such an enhancement of income or reduction of loss. There was, however, no right of appeal against the prima facie adjustment and consequential levy of tax and additional tax. The taxpayer was entitled to claim that the adjustments made to vary the income or loss were not correct and needed to be rectified as a mistake apparent from the record. The assessee had been given a right to file an appeal against the order on the rectification petition. In case the Assessing Officer had not disposed of the petition for rectification within three months from the end of the month in which the petition was filed, then only the assessee could file an appeal against the original adjustments contained in the intimation. 50.2 To simplify this cumbersome procedure, the Finance Act has provided that an intimation sent to the assessee under section 143(1) or 143(1B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exception of issuing intimations where any sum is payable by the assessee or any refund is due to him, the acknowledgement shall be deemed to be an intimation. The Act has also amended section 154 of the Income-tax Act to provide for rectification of intimation or deemed intimation referred to in sub-section (1) of section 143. 46.3 These amendments take effect from the 1 st day of June, 1999." 16. By the very same amendment explanation to section 143 was also deleted. It is thus clear that with the aforesaid amendment to the law, no appeal will lie against an intimation u/s. 143(1), section 246 as amended w.e.f.1-6-1994 read as follows: 246. Appealable orders. (1) Subject to the provisions of sub-section (2), any assessee aggrieved by any of the following orders of an Assessing Officer (other than the Deputy Commissioner) may appeal to the Deputy Commissioner (Appeals) against such order ( a ) an order against the assessee, where the assessee denies his liability to be assessed under this Act, or an intimation under sub-section (1) or sub-section (1B) of section 143, where the assessee objects to the making of adjustments, or any order of assessment under sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue to issue intimation under section 143(1)( a ) after notice for regular assessment is issued under section 143(2). Their Lordships said : The provisions of section 143(1)( a )( i ) indicate that the intimation sent under section 143(1)( a ) shall be without prejudice to the provisions of sub-section (2). The Legislature, therefore, intended that, where the summary procedure under sub-section (1) has been adopted there should be scope for the Revenue, either suo motu or at the instance of the assessee, to make a regular assessment under sub-section (2) of section 143. The converse is not available ; a regular assessment having been commenced under section section 143 (2), there is no need for summary proceedings under section 143(1)( a ) . 19. As rightly contended on behalf of the Revenue, the aforesaid decision of the Hon ble Supreme Court was rendered in the context of the law as it stood prior to1/6/1999. The law laid down in the said decision will apply to the present assessment year also and to this extent we agree with the submissions of the ld. Counsel for the assessee. Since the appeal before the CIT(A) was not maintainable this decision could not have been reli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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