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TMI Blog2022 (8) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... et Kumar, Judicial Member For the Assessee : Shri K.C. Devdas, C.A For the Revenue : Shri Y.V.S.T. Sai, CIT(DR) ORDER PER LALIET KUMAR, J.M This appeal filed by the assessee is directed against the order dated 6.6.2018 of the learned CIT (A)-5, Hyderabad relating to A.Y.2011-12. 2. The legal grounds raised by the assessee before us are as under: 1. The Learned Commissioner of Income Tax (Appeals) failed to appreciate that the time limitation laid down under Section 154(7) applies only to amendment of any order passed referred to in Section 154(1)(a) and not to amendment of any intimation or deemed intimation under sub-section (1) of Section 143(1) referred to in Section 154(1) (b) and, therefore, erred in dismissing the appeal stating that the rectification application is beyond the date of limitation. 2. Without prejudice to Ground No. 1, the Learned Commissioner of Income Tax (Appeals) is not justified in not adjudicating on the ground of appeal for allowance of credit for surcharge and education cess totaling to Rs. 2,82,548/- while computing MAT set off under Section 115JAA. 3. Without prejudice to Ground No. 1, the Learned Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such amendment for rectifying any such mistake which has been brought to its notice by the assessee 62 [or by the deductor] 63 [or by the collector], and where the authority concerned is the 64 [***] 65 [Commissioner (Appeals)], by the 66 [Assessing] Officer also. 67 [* * *] (3) An amendment, which has the effect of enhancing an assessment68 or reducing a refund or otherwise increasing the liability of the assessee 69 [or the deductor] 70 [or the collector], shall not be made under this section unless the authority concerned has given notice to the assessee 69 [or the deductor] 70 [or the collector] of its intention so to do and has allowed the assessee 69 [or the deductor] 70 [or the collector] a reasonable opportunity of being heard. (4) Where an amendment is made under this section, an order shall be passed in writing by the income-tax authority concerned. 71 [(5) Where any such amendment has the effect of reducing the assessment or otherwise reducing the liability of the assessee or the deductor 72 [or the collector], the Assessing Officer shall make any refund which may be due to such assessee or the deductor 72 [or the collector].] (6) Where any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was that an intimation was to be sent to the assessee whether or not any adjustment had been made under the first proviso to section 143(1) and notwithstanding that no tax or interest was found due from the assessee concerned. Between 1-4- 1998 and 31-5-1999, sending of an intimation under section 143(1)(a) was mandatory. Thus, the legislative intent is very clear from the use of the word intimation as substituted for assessment that two different concepts emerged. While making an assessment, the Assessing Officer is free to make any addition after grant of opportunity to the assessee. By making adjustments under the first proviso to section 143(1)(a), no addition which is impermissible by the information given in the return could be made by the Assessing Officer. The reason is that under section 143(1)(a) no opportunity is granted to the assessee and the Assessing Officer proceeds on his opinion on the basis of the return filed by the assessee. The very fact that no opportunity of being heard is given under section 143(1)(a) indicates that the Assessing Officer has to proceed accepting the return and making the permissible adjustments only. As a result of insertion of the Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 143(1)(a) was deemed to be a notice of demand under section 156, for the apparent purpose of making machinery provisions relating to recovery of tax applicable. By such application only recovery indicated to be payable in the intimation became permissible. And nothing more can be inferred from the deeming provision. Therefore, there being no assessment under section 143(1)(a), the question of change of opinion, as contended, does not arise. 4. Further The statute is required to be read, as it is , in favour of the assessee and against the Revenue, by following the literal/ strict interpretation of statute . On merit, it was submitted that the assessee is entitled to the adjustment as per section 115JB of the Act and eligible for MAT credit under the Act. 5. He accordingly submitted that the learned CIT (A) is not justified in dismissing the appeal of the assessee. 6. On the other hand, the learned DR submitted that the period of limitation provided u/s 154 of the Act is only for rectification and the order passed by the learned CIT (A) is correct as the application for rectification was passed beyond the period of 4 years. The learned DR also submitted that if by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all purposes under the act including under section 246 of the Act. The intimation is nothing but finalization of computation based on the return of income filed by the assessee without providing the opportunity of hearing to the assessee with the limited power to the CPC as provided by the act. But nonetheless based on this intimation/order the refunds/demand are raised by the tax authorities. The intimation may not be the assessment order but for all purposes it will be an order under the Act, therefore the limitation provided for rectification of intimation would only be four years, as in the case of order. However, if we accept the logic, that no limitation has been provided u/s 154(7) of the Act for the purpose of rectification then sequel to that would be that Assessing Officer be in liberty to rectify the intimation either Suo-moto or on the application even after a period of 4 years. That cannot countenance. As it would lead to unintended results by conferring the powers to Assessing Officer to rectify any mistake apparent from record in respect of intimation beyond a period of 4years. 9. The learned AR submitted during the course of argument that the plenary literal int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o satisfy a particular purpose. The last mentioned method consists of an application of the Mischief Rule laid down in Heydon's case long ago. [para 28] 22. In the celebrated judgment of Reserve Bank of India v. Peerless General Finance Investment Co. Ltd. and Others, [1987] 1 SCC 424, O. Chinnappa Reddy, J. stated:- Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute-maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With these glasses we must look at the Act as a whole ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts vice. Its virtue is that the legislator's true purpose may be more accurately ascertained. Its vice is that the certainty and accessibility of the law may be reduced or compromised. The common law, which regulates the interpretation of legislation, has to balance these considerations. And in R. (Quintavalle) v. Secretary of State for Health, [2003] 2 All E.R.113, Lord Steyn put it thus: On the other hand, the adoption of a purposive approach to construction of statutes generally, and the 1990 Act in particular, is amply justified on wider grounds. In Cabell v Markham [1945] 148 F 2d 737 at 739 Learned Hand J explained the merits of purposive interpretation: 'Of course it is true that the words used, even in their literal sense, are the primary, and ordinarily the most reliable, source of interpreting the meaning of any writing: be it a statute, a contract, or anything else. But it is one of the surest indexes of a mature developed jurisprudence not to make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning.' The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being so constrained by their context are numerous. In particular, as McHugh J A pointed out in Isherwood v Butler Pollnow Pty Ltd. [(1986) 6 NSWLR 363 at 388.], if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent. [Cooper Brookes (Wollongong) Pty Ltd. v. Federal Commissioner of Taxation [1981] 147 CLR 297 at 320-321]. 24. It is thus clear on a reading of English, U.S., Australian and our own Supreme Court judgments that the 'Lakshman Rekha' has in fact been extended to move away from the strictly literal rule of interpretation back to the rule of the old English case of Heydon, where the Court must have recourse to the purpose, object, text, and context of a particular provision before arriving at a judicial result. In fact, the wheel has turned full circle. It started out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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