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TMI Blog2014 (10) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... response to the notice - The procedure under law, must be followed, before any part of such claim is disallowed - a claim u/s 80HHC of the Act is surrounded by several uncertainties and debatable questions of fact and law - Before the AO disallowed a part of the claim made under that provision, he ought to have issued notice u/s 143(2) of the Act - There cannot be any hard and fast rule as to when a particular aspect can be treated as debatable and when not – thus, the order of the Tribunal is upheld – Decided against revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... ble, prima facie, he just gives an intimation, in that behalf, under Section 143(1)(a) of the Act. Though such intimation is bereft of any discussion and reasons, it constitutes, for all practical purposes, an order of assessment giving a finality to the returns. Where, however, the Assessing Officer entertains a doubt as to the accuracy of figures, or correctness of the claims of the assessee, he is conferred with power under sub-section (2) of Section 143 of the Act, to issue notice to the assessee, requiring him to explain on these aspects. On receiving such explanation, he can pass an order under Section 143(3) of the Act. A comparison of the two procedures, referred to above, discloses that the first one can be resorted to only when t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder under Section 143(3) of the Act. Once a notice is issued, the matter stands taken away from the purview of Section 143(1)(a) of the Act. Therefore, the procedure adopted by the Assessing Officer cannot be countenanced. Learned counsel for the appellant placed reliance upon the judgment of the Kerala High Court in Ambathi Enterprises v. Commissioner of Income Tax 253 ITR 319. As in the present case, the returns were processed there, under Section 143(1)(a) of the Act, disallowing certain claims, and the assessees effort to get the order rectified did not fructify. The Kerala High Court took the view that as long as the prima facie adjustment and intimation under Section 143(1)(a) of the Act, is within the parameters stipulated therein, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rala High Court discussed the matter on merits also and held that the law was settled as regards part of claim, which was disallowed by the Assessing Officer in his intimation under Section 143(1)(a) of the Act. In the instant case, it is not so. By its very nature, a claim under Section 80HHC of the Act is surrounded by several uncertainties and debatable questions of fact and law. Before the Assessing Officer disallowed a part of the claim made under that provision, he ought to have issued notice under sub-section (2) of Section 143 of the Act. It is not even asserted by the Revenue that the disallowance of part of the claim was on the basis of settled principles of law and there was nothing debatable about it. There cannot be any hard a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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