9911796707
TMI Blog1997 (1) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... x under section 143(1A) of the Act, totalling Rs. 1,53,60,734 were imposed on the petitioner-company for the assessment year 1993-94. The said amount of tax and additional tax was imposed by the Assessing Officer after making certain adjustments under the first proviso to section 143(1)(a), which are said to be not permissible in law. The petitioner is a public limited company incorporated under the Companies Act, 1956, with its registered office at Ludhiana. The petitioner is engaged in the business of manufacturing and exporting woollen yarn, hosiery and cotton garments. A return of income was filed by the petitioner under section 139(1) of the Act before the due date (December 31, 1993), for the assessment year 1993-94 relevant to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercised under section 143(1)(a) of the Act without hearing the assessee. Prima facie adjustments, if any, contemplated only those mistakes which were not required to be established by any process of investigation. The plea put forward by Shri Gupta is that the term "prima facie" meant "on the face of it" or "apparent from record". He has also drawn our attention to Circular No. 689 dated August 24, 1994, issued by the Central Board of Direct Taxes, whereby it has been clarified by the Board that prima facie disallowance may be made only in the case of an incorrect claim if such incorrect claim is apparent from the existence of other information in the return or the accompanying accounts or documents. Shri Gupta has contended that the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Assessing Officer has the powers to make any adjustments of the nature specified in any of the three clauses of the first proviso to section 143(1)(a). No opportunity of hearing is required to be given to the assessee while making such adjustments. Clause (iii) of the proviso permitted the Assessing Officer to make any adjustment in respect of "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". Shri Sawhney has vehemently argued that the deduction, which had been claimed by the assessee in his return under section 80HHC, was actually not available to that extent on the basis of the infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powers of the Assessing Officer under section 143(1)(a) of the Act, relying on a decision of the Madhya Pradesh High Court in Kamal Textiles v. ITO [1991] 189 ITR 339; that of the Kerala High Court in Kerala State Coir Corporation Ltd. v. Union of India [1994] 210 ITR 121; and that of the Calcutta High Court in Modern Fibotex India Ltd. v. Deputy CIT [1995] 212 ITR 496. It has been argued by Shri Sawhney that the jurisdiction of the Assessing Officer under section 143(1)(a) is limited not only to the obvious but also to that which is deducible from the return as filed without doubt or debate. This is clear from the language of the section and is supported by the authority as well as the circulars issued by the Central Board of Direct Taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rit petition in a case where an assessment order in a sales tax matter had been assailed. The question of alternative remedy was examined and, after quashing the assessment order, the matter was referred back for rehearing. Shri Sawhney has argued that, here also, even though the assessee might defend his right to invoke the jurisdiction of this court under article 226 of the Constitution, he may be asked to clarify the position before the Assessing Officer by moving a rectification application. A similar matter was earlier examined by this court in Civil Writ Petition No. 3525 of 1990 (Swaraj Mazda Ltd. v. Deputy CIT [1992] 105 CTR 109) and, vide order dated June 4, 1990, the assessee was directed to seek the alternative remedy by moving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oving a rectification application under section 154 of the Act. In the preceding assessment year, similar remedy was availed of and the assessee, after explaining the nature of the profits, succeeded in appeal before the Tribunal. It has also to be noticed that a notice under section 143(2) of the Act has already been issued to the assessee for the assessment year 1993-94 and it appears that assessment under section 143(3) has thereafter been made. If that was so, the assessee can challenge the order, if any, made in the regular assessment, reducing the claim under section 80HHC of the Act. The view taken by this court in Swaraj Mazda's case, [1992] 105 CTR 109, in similar circumstances, supports it. We, therefore, do not think appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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