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TMI Blog2007 (3) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... ,70,72,460 (ii) Difference of provisions for gratuity and actually paid Rs. 1,54,420 (iii) Disallowance under section 43B Rs. 85,31,000 ---------------- Rs. 14,57,57,880 ---------------- Subsequently, the case was selected for scrutiny and notice under section 143(2) dated 19-8-1998 was served upon the assessee. After the issue of notice under section 143(2), the assessee moved an application for rectification of the intimation under section 143(1)(a) since, in the opinion of assessee, the adjustments could not be made by the Assessing Officer. The Assessing Officer, relying on the decision of the Hon'ble Gujarat High Court in the case of Lakhanpal National Ltd. as well as the decision of the Hon'ble Madhya Pradesh High Court in the case of CIT v. Regional Soya bean Products Co-operative Union Ltd. [1999] 239 ITR 217, held that rectification is not possible under section 154 after the issue of notice under section 143(2) of the Act. Accordingly, the Assessing Officer rejected the application of the assessee vide order dated 30-9-1999. 3. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 154 of the Act. Such rectification can be made either suo motu by the Assessing Officer after issue of notice under section 154(3) of the Act or on the basis of the application moved by the assessee. There can't be any dispute to the legal position that so long as any order/the intimation is in existence, the same can be rectified unless the context/legislative intent otherwise require. In this legal background, let us consider whether the decisions of the High Courts relied upon by the Assessing Officer help the case of revenue. 6. In the case of Regional Soya beans Products Co-operative Union Ltd., the Assessing Officer issued notice under section 143(2) of the Act on 29-5-1992 for assessment year 1991-92. During the pendency of assessment proceeding, the Assessing Officer also issued intimation under section 143(1)(a) on 18-12-1992, wherein certain adjustments were made which also resulted in levy of additional tax under section 143(1A) of the Act. On these facts, the question arose whether the Assessing Officer could issue such intimation under section 143(1)(a) after the issue of notice under section 143(2). Their Lordships of the Hon'ble Madhya Pradesh High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the view that once notice is issued under section 143(2), the Assessing Officer has to complete the assessment under section 143(3) in our decision rendered in Special Civil Application No. 425 of 1996 - Gujarat Poly-AXV Electronics Ltd v. Dy. CIT (Assessment) [1996] 222 ITR 140, decided by us on 4/5-7-1996, and, therefore, we do not discuss in detail about the same in this judgment. If the Assessing Officer would have rectified the order with the aid of section 154(1)(b) of the Act, even then certainly he could have exercised the power under section 143(2) of the Act. Once having issued the notice under section 143(2), he has to complete the procedure of assessment as laid down under section 143(3) of the Act. In the instant case, the order of assessment is passed by the Assessing Officer and thus he has completed the assessment after scrutinizing the evidence with proper application of mind. Therefore, in a case like this, after issuance of notice under section 143(2) of the Act, there is no question of issuing notice under section 154(1)(b) of the Act but the assessment is to be made under section 143(3) of the Act. Therefore, the impugned notices deserve to be quashed and set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly. It is therefore, clear that intimation under section 143(1)(a) can be amended under section 154 at any point of time within the period of limitation. The powers of the Assessing Officer are therefore unfettered except where the context otherwise requires. 10. The judgment of the Hon'ble Gujarat High Court puts a fetter on the power of Assessing Officer under section 154 considering the scheme of assessment under section 143 to the extent the mistake is curable under section 143(3) of the Act. The logic behind the judgment of the Hon'ble Gujarat High Court appears to be that after the issue of notice under section 143(2), the interest of revenue is not prejudiced insofar as the mistake committed by the Assessing Officer in not making prima facie adjustments under section 143(1)(a) can be rectified by making addition while computing the total income of assessee. 11. However, where a mistake has been committed by the Assessing Officer by making adjustments which legally could not be made by the Assessing Officer, the interest of assessee is prejudiced on account of levy of additional tax under section 143(1A) which could not be cured under section 143(3). As already observed, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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