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TMI Blog2000 (9) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... on 143(1)(a), the Tribunal is justified in relying on the findings entered in an earlier order of the Tribunal arising out of an order under section 143(1)(a) of the Income-tax Act ? (3) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in interfering with the disallowance made in a sum of Rs. 3,571 under section 37(2A) of the Income-tax Act ? (4) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in deleting the disallowance of Rs. 7,31,127 made in the deduction under section 80HH and of Rs. 9,16,910 made in the deduction under section 80-I of the Income-tax Act ? (5) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in holding that the manufacturing activity and dealing in units of the Unit Trust of India constituted the same business and that a contrary view could be taken only by sorting out the facts and after a process of reasoning and so the issue being debatable, no adjustment under section 143(1)(a) is permissible in the computation of the relief under section 80HH and under section 80-I of the Income-tax Act ? (6) Whether, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,31,127 (3) Excess claim under s. 80-I As in the case of deduction under s. 80HH, here also, the deduction is restricted to 35 per cent of Rs. 42,65,953 which works out to Rs. 10,66,488 as against Rs. 19,83,398. 9,16,910 ---------- Adjusted total income 23,33,348 ---------- Rounded off to 23,33,350 ---------- On receiving this intimation, the assessee filed a letter dated March 10, 1993, objecting to the adjustment. It was claimed before the Assessing Officer that the adjustments were not prima facie admissible. The assessee filed an application for rectification when it received intimation. That application was rejected by the Assessing Officer subject to certain deductions on the ground of arithmetical mistake in the claim under section 37(2A) of the Act. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t with regard to the same assessee in the previous years. Learned senior counsel, Shri Sarangan, for the assessee, contended that the Assessing Officer travelled beyond the jurisdiction under section 143(1)(a) of the Act. He pointedly relied on the fact that any demand or addition can be made only within the framework of the return. The Assessing Officer cannot travel beyond the return filed by the assessee. He further submitted that by exercising the power under section 143(1)(a) of the Act, the Assessing Officer cannot reject the case set up by the assessee without finally deciding the question on the basis of further evidence. Section 143(1)(a) of the Act is as follows : "143. (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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act to make some adjustments within the framework of the return filed by the assessee. The question often arose whether by exercising the above power, the Income-tax Officer can Answer a debatable issue. The section is very clear that unless deduction of claim is prima facie inadmissible, the Assessing Officer cannot alter the claim made by the assessee. "Prima facie inadmissible" means without much debate or on the face of the document itself it can be stated that a mistake has been committed by the assessee. But it is seen that after the return is filed, the assessee may claim certain deductions, which according to it, it is entitled to. For example, in the present case itself, the assessee is engaged in the manufacture and sale of asbestos cement sheets making use of the company's amount and as the company's business itself and it may be engaged in some other trade or business. The assessee takes the view that such income forms part of the income of the trade and cannot be put under any other head, These are all cases where the assessee is of the opinion that it can make such claims and the question is whether such claim can be included or not. Of course, if a claim is made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s finding, since section 115J did not require an assessee to produce any such certificate in order to claim the deduction prescribed therein. The Rajasthan High Court had an occasion to deal with this question in the case reported in JKS Employees' Welfare Fund v. ITO [1993] 199 ITR 765. In the above decision, it was held thus : "The object of a summary assessment contemplated under section 143(1)(a) of the Income-tax Act, 1961, is not only to reduce the work of the Department but is also to minimise litigation and create confidence in taxpayers for submitting true and correct returns, if it appears that the return submitted by the assessee cannot be accepted for the purpose of taking action under section 143(1)(a) then the powers of the Income-tax Officer are not fettered and he can proceed to finalise the assessment after giving an opportunity to the assessee to be heard in respect of any arguable point under section 143(2). A bare perusal of section 143(1)(a) shows that the Income-tax Officer has to accept the return as it is and in the proviso, three exceptions have been given, conferring jurisdiction on him for making adjustment. The action under this section cannot be tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinions are possible. The matter has been further considered by the Board in the light of the recommendations of the Tax Reforms Committee, headed by Prof. Raja J. Chelliah and it has been decided that prima facie disallowances shall be made only in respect of the following types of claims : (a) an incorrect claim, if such incorrect claim is apparent from the existence of other information in the return or the accompanying accounts or documents ... (b) any claim in respect of which there is an omission of information which is required, under the specific provisions of the Act or the rules, to be furnished along with the return to substantiate such claim . . . (c) A claim for deduction or rebate of any amount which exceeds statutory limit imposed, if such limit is expressed either as a specific mandatory amount or as a percentage, ratio or a fraction, and if the information relevant to application of the statutory limits appear in the return or the accompanying accounts or documents ... (d) Any claim which is patently inadmissible in law ... 3. The Board desires that no other prima facie disallowance should be made except with the previous approval of the Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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