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TMI Blog2010 (7) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... question of law : "Whether on the basis of the facts and in circumstances of the case, the learned Income-tax Appellate Tribunal have erred in law in cancelling the order under section 154, when the same was passed for rectifying the intimation under section 143(1)(a) dated August 25, 1994, on the basis of the second revised return filed on November 11, 1994 ?" 2. Briefly stated, the facts of the case are that the assessee is a corporation owned by the State Government and filed its return on December 28, 1992 declaring nil income. The said return was processed under section 143(1)(a), vide intimation dated January 22, 1993. Thereafter, the assessee filed a revised return accompanied by the audited accounts and report on De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated July 8, 2002, allowed the appeal holding that the order of the Assessing Officer and upheld by the Commissioner of Income-tax (Appeals) was not valid. Hence, the present appeal by the Revenue. 3. We have heard the learned counsel for the parties. 4. Learned counsel for the appellant has placed reliance upon the judgement of the Kerala High Court in Janatha Tile Works Ltd. v. CIT [2006] 283 ITR 35 (Ker) to submit that there is no bar under the provisions of the Act to take recourse to section 154 of the Act even when a notice under section 143(2) of the Act had been issued. On the other hand, learned counsel for the assessee supported the order passed by the Tribunal. 5. The only point that arises for conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was also held that apart from the fact that no notice under section 154 being permissible in the circumstances of the case, the Assessing Officer himself could not have decided any debatable issue under section 143(1)(a). The issue of notice under section 154 by the Deputy Commissioner was seeking to correct the intimation under section 143(1)(a) by introducing a matter which he could not have decided under section 143(1)(a) in the first place. The Calcutta High Court was in fact following its earlier decision in Modern Fibotex India Ltd.'s case [1995] 212 ITR 496 (Cal). 9. In Gujarat Poly-AVX Electronics Ltd. v. Deputy CIT (Assessment) [1996] 222 ITR 140 (Guj), the Gujarat High Court examined the scope of sub-sections (1) and ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y had taken a view in the matter and issued a notice under section 143(2) to the assessee. Such a notice is normally issued to ensure that the assessee has not understated the income or has not computed excessive loss or underpaid the tax. It is only on consideration of the matter and on being satisfied that it is necessary or expedient to do so that the Assessing Officer issues the notice under section 143(2). Once that has been done, the Assessing Officer has to proceed under sub-sec-tion (3) and make an assessment of the total income or loss of the assessee and determine the sum, if any, payable by it. The consequences follow under sub-section (4). It is no doubt correct that an error apparent on the record can be corrected under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of additional tax taking into account the income by way of cash compensatory support was not warranted." 13. The apex court had approved the decision in Modern Fibotex India Ltd.'s case [1995] 212 ITR 496 (Cal). 14. We may now advert to the judgment of the Kerala High Court on which reliance has been placed by learned counsel for the Revenue. In Janatha Tile Works Ltd.'s case [2006] 283 ITR 35 (Ker) the assessee had filed return of income on December 31, 1990 which was processed under section 143(1)(a) on August 20, 1991 accepting the returned loss. The intimation was rectified under section 154 of the Act on August 26, 1992 and additional tax was levied under section 143(1A). The assessee contended that after completion of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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