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TMI Blog2006 (2) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee - - - - - Dated:- 10-2-2006 - Judge(s) : K. S. RADHAKRISHNAN., K. T. SANKARAN. JUDGMENT The judgment of the court was delivered by K.S. Radhakrishnan J. - The Income-tax Appellate Tribunal, Cochin Bench, has made this reference under section 256(1) of the Income-tax Act, 1961. Three questions of law have been referred for consideration which are given below: "(1) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the intimation under section 143(1)(a) would survive after passing an order of assessment under section 143(3) of the Income-tax Act, 1961? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the intimation under section 143(1)(a) could be rectified after the order under section 143(3) was passed? (3) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that there could be a levy of additional tax under section 143(1A) for the first time by an order under section 154?" The assessee filed a return of income on December 31, 1990, for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Deputy CIT (No. 1) [1995] 214 ITR 498. Reference was also made to the decision of the same court in Modern Fibotex India Ltd. v. Deputy CIT [1995] 212 ITR 496. Counsel also placed reliance on the decision of the Delhi High Court in CIT v. Punjab National Bank [2001] 249 ITR 763 and the decision of the Gujarat High Court in Gujarat Poly-AVX Electronics Ltd. v. Deputy CIT (Assessment) [1996] 222 ITR 140. Counsel appearing for the Revenue, Sri George K. George, on the other hand, contended that in processing the return under section 143(1)(a), the Assessing Officer ought to have disallowed the claim of bonus by applying section 43B and then levied additional income-tax. Counsel submitted that by mistake additional tax was not levied. Counsel submitted that the assessee did not dispute the fact that bonus of Rs. 20,714 outstanding as unpaid liability as on March 31, 1991, was not an allowable deduction and in view of the provisions of section 43B the same should have been disallowed. Counsel submitted that addition under section 43B should have been made in processing the return under section 143(1)(b). Counsel submitted that the Tribunal is justified in not following the decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stments shall be made in the income or loss declared in the return, namely:- (i) any arithmetical errors in the return, accounts or documents accompanying it shall be rectified; (ii) any loss carried forward, deduction, allowance or relief, which, on the basis of the information available in such return, accounts or documents, is prima facie admissible but which is not claimed in the return, shall be allowed; (iii) any loss carried forward, deduction, allowance or relief claimed in the return, which, on the basis of the information available in such return, accounts or documents, is prima facie inadmissible, shall be disallowed: Provided further that where adjustments are made under the first proviso, an intimation shall be sent to the assessee, notwithstanding that no tax or interest is found due from him after making the said adjustments: Provided also that an intimation for any tax or interest due under this clause shall not be sent after the expiry of two years from the end of the assessment year in which the income was first assessable. (b) Where, as a result of an order made under sub-section (3) of this section or section 144 or section 147 or section 154 or sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... four years from the end of the financial year in which any such adjustments were made or any such order was passed. (1A)(a) where, in the case of any person, the total income, as a result of the adjustments made under the first proviso to clause (a) of sub-section (1), exceeds the total income declared in the return by any amount, the Assessing Officer shall,- (i) further increase the amount of tax payable under sub-section (1) by an additional income-tax calculated at the rate of twenty per cent, of the tax payable on such excess amount and specify the additional income-tax in the intimation to be sent under sub-clause (i) of clause (a) of sub-section (1); (ii) where any refund is due under sub-section (1), reduce the amount of such refund by an amount equivalent to the additional income-tax calculated under sub-clause (i). (b) Where as a result of an order under sub-section (3) of this section or section 154 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264, the amount on which additional income-tax is payable under clause (a) has been increased or reduced, as the case may be, the additional income-tax shall be increased or reduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or the amount refunded under sub-section (1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly." The abovementioned provision has been interpreted by the Calcutta High Court as well as the Delhi High Court and also by the apex court. The scope of sections 143(1) and 143(2) and (3) was also the subject matter of several decisions. The Supreme Court in CIT v. Gujarat Electricity Board [2003] 260 ITR 84, examined the question as to whether it is open to the Revenue to issue intimation under section 143(1)(a) of the Act after notice of regular assessment has been issued under section 143(2) of the Act and held as follows: "There is no dispute that section 143(1)(a) of the Act enacts a summary procedure for quick collection of tax and quick refunds. Under the scheme if there is a serious objection to any of the orders made by the Assessing Officer determining the income, it is open to the assessee to ask for rectification under section 154. Apart therefrom, the provisions of section 143(1)(a)(i) indicate that the intimation sent u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143 and held that after the issuance of notice under section 143(2) of the Act, it is not open to the Assessing Officer to make adjustment or to pass an order under section 143(1) of the Act, but he has to make assessment in accordance with law, that is, under section 143(3) of the Act. The Gujarat High Court followed the principle laid down in the decision of the Calcutta High Court in Modern Fibotex India Ltd. v. Deputy CIT [1995] 212 ITR 496. We, with due respect, find ourselves unable to agree with the principles laid down by the High Courts of Gujarat, Calcutta and Delhi since those courts have failed to examine the effect of insertion of the words "sub-section (3) of section 143" in clause (b) of section 143(1A) by the Finance Act, 1992 (18 of 1992), with effect from April 1, 1989. The questions posed before us have to be answered taking into consideration the above mentioned insertion. Section 143(1A)(b) was inserted with effect from April 1, 1989, by the Direct Tax Laws (Amendment) Act, 1989, and subsequently amended with effect from April 1, 1989, by the Finance Act, 1992, operative from April 1, 1989, that is, for and from the assessment year 1989-90 till May 31, 1999 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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