9911796707
TMI Blog1995 (11) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... bhai. The original assessment of the assessee was completed on February 9, 1983, on a total income of Rs. 99,014. In the said assessment, the income of the assessee from his share in the firm was taken on provisional basis, subject to rectification under section 155 after the assessment of the firm had been completed. The assessment in question was completed on March 31, 1983, and the notice of demand was served on the agsessee on April 18, 1983. On April 19, 1983, the assessee submitted Form No. 6A in terms of clause (a) of sub-section (2) of section 143 of the Income-tax Act, 1961, objecting to the assessment made under section 143(1) as above on the ground that enhancement of the returned income from Rs. 36,204 to Rs. 41,284 was incorrect. The Income-tax Officer, prima facie, took no action on receipt of the aforesaid Form No. 6A from the assessee. In the meanwhile, the firm's assessment had been completed and the correct share income of the assessee, in Alimbeg Salimbhai was communicated to the Income-tax Officer. On its basis, he gave notice under section 155 to the assessee and after that rectified the original assessment under section 143(1) made by him on March 31, 1983. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law and it would be their duty to give a specific direction for making of the proper assessment. We, therefore, quash the order of the Appellate Assistant Commissioner and restore that of the Income-tax Officer. Now, in these circumstances, the aforesaid two questions have been referred for answer by this court at the instance of the assessee. In view of the controversy that arose in the present case, it would be relevant to refer to the provisions of the law which were existing at the relevant time pertaining to the assessment of the assessee for the assessment year 198081. Section 143 of the Act as it stood at the relevant time reads thus : 143. Assessment.-- (1) (a) Where a return has been made under section 139, the Assessing Officer may, without requiring the presence of the assessee or the production by him of any evidence in support of the return, make an assessment of the total income or loss of the assessee after making such adjustments to the income or loss declared in the return as are required to be made under clause (b), with reference to the return and the accounts and documents, if any, accompanying it, and for the purposes of the adjustments referred to in sub-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by the assessee under clause (a)] shall not be issued by the Assessing Officer unless the previous approval of the Deputy Commissioner has been obtained to the issue of such notice : Provided further that in a case where the assessment made under sub-section (1) is objected to by the assessee by an application under clause (a), the assessee shall not be deemed to be in default in respect of the whole or any part of the amount of the tax demanded in pursuance of the assessment under that sub-section, which is disputed by the assessee, in so far as such amount does not relate to any adjustment referred to in sub-clause (i) of clause (b) of sub-section (1), and further no interest shall be chargeable under sub-section (2) of section 220 in respect of such disputed amount. (3) On the day specified in the notice issued under sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered,-- (a) in a case where no assessment has been made under sub-section (1), the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unregistered firm. " Under section 143(1)(a) of the Act of 1961, where a return is filed under section 139, the assessing authority may, without requiring the presence of the assessee, assess the total income or the loss of the assessee after making such adjustment to the income or the loss declared in the return as are required to be made under clause (b), with reference to the return and the accounts and documents if any and for proper adjustments referred to in sub-clause (iv) of clause (b), also with reference to the record of the assessment of past years and determine the sum payable by the assessee or refundable to him on the basis of such assessment. In sub-section (2) of section 143, it is stated that where a return has been made under section 139 and assessment is made under sub-section (1), and the assessee makes within one month from the date of service of the notice of demand issued in consequence of such assessment, an application to the Assessing Officer objecting to the assessment, in Form No. 6A, then in that case, the second proviso to sub-section (2) says that the assessee shall not be deemed to be in default in respect of the whole or any part of the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) or sub-section (5) of section 139 ; or (d) the expiry of six months from the end of the month in which an application under clause (a) of sub-section (2) of section 143 is made by the assessee, whichever is latest." It may be relevant to mention here that clause (d) of section 153(1) was inserted with effect from October 1, 1984. Therefore, in this case, the period of six months prescribed under this clause will not be applicable because we are concerned with the assessment period 1980-81. In fact, this aspect has also been missed by the Tribunal. Therefore, we have to examine the period of limitation as per provisions which existed at that time and that period will be two years under section 153(1)(a)(iii). That means two years from the end of assessment year in which the income was first assessable and commencing on or after the 1st day of April, 1969. We are concerned with the assessment year 1980-81, i.e., after the 1st April, 1969. Limitation of two years has been prescribed. The Tribunal has proceeded to examine the matter in light of clause (d) of sub-section (1) of section 153 which was not relevant as this clause came into existence for the first time with effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee within the time prescribed, i.e., two years under section 153(1)(a)(iii) of the Act. It is true that no order whatsoever has been passed by the assessing authority within the two years time period prescribed under section 153(1)(a)(iii) while the assessing authority was under obligation to have disposed of the said application within the time-frame. If the assessing authority has failed to discharge its obligation, then the assessee should also not suffer and his rights should be protected under the second proviso to sub-section (2) of section 143. If we harmoniously read the second proviso to sub-section (2) of section 143 with sub-section (1)(a)(iii) of section 153, then it would emerge that the assessee's rights could be protected to the extent of the disputed amount from tax liability. If that dispute has not been disposed of by the assessing authority, then to that extent, the demand raised shall remain time-barred and whatever assessment has been made by the assessing authority and tax deposited by the assessee will not be lost. If the interpretation suggested by Shri Nema, learned counsel for the assessee, is accepted, then that will amount to violation of section 143 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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