TMI Blog2008 (1) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal of the assessee and setting aside the order of ld.CIT(A) and quashing the intimation sent by the A.O. U/s 143(1)(a) of the I.T. Act, 1961 ? (ii)Whether on the facts and circumstances of the case, the ld. ITAT is right in law in taking a view that the changing of status of firm from Trust to an Association of Persons (AOP) falls outside the purview of see 143 (1)(a) of the Income Tax Act 1961?" 2. The brief facts out of which the present appeal has arisen are as under:- 3. The asseessee filed Income Tax return in this case on 27.3.1997 showing his income as Nil. While processing the return under Section 143(1)(a) of the Income Tax Act (for short the 'Act'), the Assessing Officer found that the claim of the assessee for exemption under Section 12-A of the Act was not allowable in the absence of registration certificate. A notice dated 12.3.1998 (Annexure A-1) was issued to the assessee requiring him to explain why the status of the said trust may not be treated as AOP in the absence of the registration certificate. On the required date neither any reply was received nor anybody attended the proceedings before the AO on behalf of the assessee. Hence, the AO proceeded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation I hold that the action of the A.O. in changing the status and disallowing the exemption claimed under sec.11 is correct and justified and the same stands upheld." 5. Against the above order of the CIT(A), Bathinda, the assessee preferred an appeal before the Income Tax Appellate Tribunal, Amritsar who vide its order dated 18.5.2007 (Annexure P-4) in ITA No.2(ASR)/2000 allowed the appeal and set aside the order of the CIT(A) and quashed the intimation sent by the AO under Section 143(1)(a) on the ground that the same was illegal and bad in law. While passing the impugned order dated 18.5.2007 the tribunal held that changing the status of the firm/trust to an AOP falls outside the ambit and purview of Section 143(1)(a) . Even though the trust was not registered with the CIT the assessment could not be made in the status of an AOP under Section 143(1)(a). Moreover, the AO could have done so by issuance of notice under Section 143(2) of the Act. 6. Mr. Yogesh Putney, counsel for the revenue has argued that admittedly the respondent-trust was not registered with the Commissioner of Income Tax under Section 12AA of the Income Tax Act therefore, was not entitled to the exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ident from the return as filed, along with the documents in support thereof, that a claim of the assessee is inadmissible, only then an adjustment under the said proviso can be made. If proof in support of the claim is not furnished by an assessee, then for the lack of proof, no disallowance or an adjustment can be made. The only option which is open to the Income -tax Officer, in such a case, is that he can require the assessee to furnish proof in which case he will presumably have to issue notice under section 143(2). This is also evident from the fact that, except for the documents specified, the assessee is not required to file the entire books of account or other documents along with the return. The proof in support of the claim may be evidenced from correspondence, from the books of account or other documents and it is not the law, as we understand it, that, in support of a claim made in the return for deduction or non-taxability of a receipt, all the proofs available and original documents must be filed along with the return. It is apparent on a reading of the said provision that adjustment can be made only if there is information available in such return that prima facie a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion or allowance, and (b) additional tax on the increased amount is charged from him arbitrarily. This would not only be in total violation of the principles of natural justice, it will also be not in consonance with the spirit of the provision to cause minimum inconvenience to the assessee and at the same time put the assessee on guard against claiming inadmissible deductions and allowances. No prejudice will be caused to the Revenue. In a given case where the Assessing Officer has any doubt about the allowability of deduction or claim made by the assessee, it is open to him to issue a notice under sub-section (2) of section 143 and have the evidence in support thereof. 10. The Hon'ble Kerala High Court in the case of Commissioner of Income Tax vs. K.V. Mankaram Co. , (2000) 245 ITR 353 while interpreting the scope of Section 143(1)(a) of the Act where the status of a firm was changed to an AOP held as under( headnote ):- "The proceeding under section 143(1)(a) does not result in an order of assessment. The intimation given under section 143(1)(a) cannot be treated an order of assessment. It is only to be deemed an order for the limited purpose of sections 154, 246 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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