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TMI Blog1991 (11) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... n 13-4-1987 in appeal No. 179/1(B)/1985-86 when it has been held that after cancellation of fresh assessment under section 143(3) the original assessment under section 143(1) survives automatically and this finding had become final as no appeal was filed against this order. 3. That the learned Dy. CIT (Appeals) erred in law and on facts of the case in deciding the non-existence of order passed under section 143(1) in appeal filed against order passed under section 155 of I.T. Act because the scope of order under section 155 is limited to enhancing the income or reducing a refund." 2. The assessee by status in this case is an individual and return was filed on 15-11-1980 reflecting the income of Rs. 22,783. Initial assessment was framed on 12-1-1983 under section 143(1) of the Income-tax Act, 1961. Unfortunately the copy of the said order is not placed on record either by the appellant-revenue or the assessee in spite of our asking. 3. Subsequently, the learned ITO issued notice under section 143(2)(b) of the Act, on 24-2-1983. Forms 28 and 29 were said to have not been filed by the assessee. The payment of tax under section 210 of the Act was seen to have been made of Rs. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o rectification under section 155. Since in the re-assessment the only variation in the income has taken place in the share income the ITO should have rectified the original assessment under section 155. Though it cannot be refuted that notice under section 143(2)(b) was correctly issued I feel that the re-assessment under section 143(3)(b) should not have been made since the original assessment had already been made subject to rectification under section 155. From the above, it is clear that the original assessment made under section 143(1) is not incorrect, inadequate or incomplete in any material respect because the original assessment was made subject to rectification under section 155 and the only change the ITO has made is that he has taken the determined share when the re-assessment has been made by him. Considering the above facts the reassessment made under section 143(3)(b) is cancelled and the ITO is directed to rectify the original assessment which stands under section 155 as had been mentioned in his earlier order. It may be mentioned that a specific provision should be applied before a general provision of the IT Act." 6. The said first appellate order dated 30-6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the above facts, a notice under section 154/155 was served on the assessee on 16-1-1986. In compliance to the notice the assessee furnished his/her reply on 20-1-1986 stating therein that even order under section 143(1) does not exist after the findings of the Tribunal Bench. As the assessee's contention has no force looking to the findings of even Hon'ble Bench of Tribunal in the matter of ITO's order under section 143(1) the order passed under section 143(1) on 12-1-1983 is revised under section 155 and income is computed as under : Rs. 1. Def. share from Jagannath Munnilal 20,643 2. Def. share from Madho Shankar Mannilal 7,977 3. Int. Income 8,192 --------------- 36,814 Less under section 80C 757 --------------- 36,057 or 36,057 " 10. Against the said rectificatory order dated 27-3-1986, the assessee filed first appeal and the learned authorised representative Shri Ram Kumar Gupta explained that original assessment was made under section 143(1) of the Act in which the return filed by the assessee was accepted. It was further pointed out that a notice under section 143(2)(b) of the Act was issued after the approval of the learned IAC and served on the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the grounds mentioned above against the order allowing assessee's first appeal. The learned Departmental Representative Shri S.K. Sagar supported the assessment order dated 27-3-1986 and argued that the order framed under section 143(1) of the Act survived for being rectified even after the order passed under section 143(2)(b) of the Act was cancelled. He read from the provisions of sections 155 and 143 of the Act. It was pointed out by the learned Departmental Representative that section 143(1) assessment continued even after notice under section 143(2)(b) was issued and a 143(3)(b) assessment order was cancelled. He argued that the law was clear on the point and thus accordingly the learned D.R., the ITO was competent to operate section 155 of the Act and the learned Dy. CIT(A) was not competent to vacate such assessment. 14. On behalf of the assessee, the learned Advocate Shri R.K. Gupta supported the order under challenge and argued further that once the learned ITO issued notice under section 143(2)(b) of the Act, that the learned ITO's 143(1) order evaporated. According to Shri Gupta, order under section 143(3)(b) had taken the place of order under section 143(1) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contesting parties, the relevant provisions of law is contained in section 143(3)(b) of the Act. According to that provision :-- " In a case where ... the Assessing Officer is of the opinion that such assessment is incorrect, inadequate, or incomplete in any material respect, the Assessing Officer shall by an order in writing, may make a fresh assessment of the total income or loss of the assessee, and determine the same payable by him or refundable to him on the basis of such assessment." 17. It is not disputed before us that 143(3)(b) assessment had been completed in this case on 7-3-1983. As per the above provisions, the learned ITO, after issuing the notice, shall by an order in writing make a fresh assessment of the total income and also determine the tax liability payable by the assessee. In the present provision, the following things are required, namely, the Assessing Officer should be of the opinion that the earlier order was incorrect, a notice was issued conveying the intention to rectify, and thereafter a fresh assessment of the total income was to be framed determining the assessee's tax liability. Once such thing is done, then the tax liability of the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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