TMI Blog2010 (7) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... (in short "the Act") against the order dated July 8, 2002 passed by the Income-tax Appellate Tribunal, Chandigarh Bench "A", Chandigarh (hereinafter referred to as "the Tribunal") in I. T.A. No. 184/Del/1996 for the assessment year 1992-93 proposing to raise the following substantial question of law : "Whether on the basis of the facts and in circumstances of the case, the learned Income-tax Appellate Tribunal have erred in law in cancelling the order under section 154, when the same was passed for rectifying the intimation under section 143(1)(a) dated August 25, 1994, on the basis of the second revised return filed on November 11, 1994 ?" 2. Briefly stated, the facts of the case are that the assessee is a corporation owned by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... took the matter in appeal before the Commissioner of Income-tax (Appeals) who, vide order dated October 13, 1995, confirmed the action of the Assessing Officer and dismissed the appeal. Still feeling dissatisfied, the assessee filed an appeal before the Tribunal who, vide order dated July 8, 2002, allowed the appeal holding that the order of the Assessing Officer and upheld by the Commissioner of Income-tax (Appeals) was not valid. Hence, the present appeal by the Revenue. 3. We have heard the learned counsel for the parties. 4. Learned counsel for the appellant has placed reliance upon the judgement of the Kerala High Court in Janatha Tile Works Ltd. v. CIT [2006] 283 ITR 35 (Ker) to submit that there is no bar under the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the order under section 143(1)(a) is followed by a regular assessment under section 143(3), the order under section 143(1)(a), in so far as it is contrary to the regular assessment under section 143(3) ceases to be executable and becomes ineffective. It was also held that apart from the fact that no notice under section 154 being permissible in the circumstances of the case, the Assessing Officer himself could not have decided any debatable issue under section 143(1)(a). The issue of notice under section 154 by the Deputy Commissioner was seeking to correct the intimation under section 143(1)(a) by introducing a matter which he could not have decided under section 143(1)(a) in the first place. The Calcutta High Court was in fact following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The observations are as under (page 459) : "Admittedly, the power under section 154 can be invoked only to correct an error apparent on the record. The scope of proceedings under section 143(2) is far wider. The competent authority had taken a view in the matter and issued a notice under section 143(2) to the assessee. Such a notice is normally issued to ensure that the assessee has not understated the income or has not computed excessive loss or underpaid the tax. It is only on consideration of the matter and on being satisfied that it is necessary or expedient to do so that the Assessing Officer issues the notice under section 143(2). Once that has been done, the Assessing Officer has to proceed under sub-sec-tion (3) and make an as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 143(1A) of the Act. If additional tax could be levied in such circumstances it will be punishing the assessee for no fault of his. That cannot ever be the legislative intent. In the circumstances of the present case, levy of additional tax taking into account the income by way of cash compensatory support was not warranted." 13. The apex court had approved the decision in Modern Fibotex India Ltd.'s case [1995] 212 ITR 496 (Cal). 14. We may now advert to the judgment of the Kerala High Court on which reliance has been placed by learned counsel for the Revenue. In Janatha Tile Works Ltd.'s case [2006] 283 ITR 35 (Ker) the assessee had filed return of income on December 31, 1990 which was processed under section 143(1)(a) on August ..... X X X X Extracts X X X X X X X X Extracts X X X X
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