TMI Blog2017 (1) TMI 1264X X X X Extracts X X X X X X X X Extracts X X X X ..... that though not as a challenge to Section 143(1) notice, when the petitioner has filed a revised return and has sought for interference by the Commissioner, necessarily the claim has to be considered in accordance with law. Thus taking cue from Parekh Brothers (supra), the Commissioner will be justified in considering the claim for deduction by the petitioner in accordance with law under Section 264 of the Act. - W.P. (C) No. 26779 of 2016 - - - Dated:- 10-1-2017 - A.M. SHAFFIQUE, J. FOR THE PETITIONER : ADVS.SRI.SHERRY SAMUEL OOMMEN, SRI.SUKUMAR NAINAN OOMMEN FOR THE RESPONDENT : ADV. SRI.GIRISH KUMAR.V., CGC, ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX, SRI.N.NAGARESH, ASSISTANT SOLICITOR GENERAL JUDGMENT This writ petition is filed challenging Ext.P1 by which the Principal Commissioner of Income Tax, Kochi -2 has issued an order under Section 264 of the Income Tax Act, 1961 dismissing a petition for revision filed by the assessee. Petitioner also seeks for a direction to hear him and pass appropriate orders. 2. The short facts involved in the writ petition would disclose that the petitioner is a society registered under the Travancore Cochin Literary Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the said case, the question under consideration was whether the Commissioner can exercise the revisional jurisdiction, when the assessee having included the income for assessment, can claim the relief of weighted deduction under Section 35B for the first time in a petition filed under Section 264. It was held that the Commissioner has jurisdiction to entertain a revision under Section 264. 6. In S.R.Koshti v. Commissioner of Income Tax [2005 (146) Taxman 335 (Guj.)], a Division Bench of the Gujarat High Court held that an intimation under Section 143(1) of the Act is not an order of assessment. However, regardless of whether revised return was filed or not, once an assessee is in a position to show that he had been over assessed under the provisions of the Act, regardless of whether the over assessment is a result of assessee's own mistake or otherwise, the Commissioner of Income Tax has the power to correct the assessment as per Section 264(1) of the Act. 7. In Manoharlal Agarwal v. Commissioner of Income Tax {2014 (222) Taxman 138 (Guj)}, a revision under Section 264 was rejected and one of the grounds was that the petitioner's return under Section 143(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of assessment. For the purpose of Sections 154, 246 and 264, proceeding under 143(1)(a) is treated as an order by the assessing authority. However, the intimation given under Section 143(1)(a) cannot be treated to be an order of assessment. It is only to be deemed as an order for the limited purpose of sections 246 and 264 of the Act. Under section 143(1)(a)(i), the intimation is deemed to be a notice of demand under Section 156 of the Act and it is not treated as an order of assessment. The two are conceptually different and except intimation, no other order is contemplated under 143(1)(a). It was also held that there is a distinction between an order of assessment and a notice of demand and an intimation under Section 143(1)(a) is deemed to be a notice of demand. However, in the judgment, it is held that an intimation under 143(1)(a) is deemed to be an order for the limited purpose of Section 264 of the Act as well. 12. In Asst. Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers Private Ltd (2007 (291) ITR 500 SC), the Apex Court had occasion to consider the scope of Section 143(1) (a). It was observed that as a result of the insertion of Explanation to Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... changes in the statutory format over a period of time. Section 143 has undergone certain changes w.e.f. 1/6/1999. The statute uses the word intimation and not order. Section 143(2) further provides that in an instance where a return has been furnished or in response to a notice under Section 142(1), the assessing officer has reason to believe that any claim of loss exemption, deduction, allowance or relief made in the return is inadmissible, it is open for him to serve on the assessee a notice specifying particulars of such claim, loss, exemption, etc. and after conducting such enquiry in terms with sub section (2), the assessing officer can pass an order under Section 143(3). It is in the light of the aforesaid change in the statutory provision that one has to consider the scope and effect of the revisional powers under Section 264. The Delhi High Court in Vijay Gupta (supra) held that an intimation under section 143(1) is regarded as an order for the purpose of section 264 of the Act. Reference was made to the judgments in K.V.Mankaram and Co. (supra), Assam Roofing Ltd. (supra) and S.R Koshti (supra). But it is relevant to note that there is a modification or ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso to section 143(1)(a), an intimation had to be sent to the assessee notwithstanding that no tax or refund was due from him after making such adjustments. With effect from April 1, 1998, the second proviso to section 143(1)(a) was substituted by the Finance Act, 1997, which was operative till June 1, 1999. The requirement 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 April 1, 1998 and May 31, 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be deemed to be an intimation under section 143(1) where (a) either no sum is payable by the assessee, or (b) no refund is due to him. It is significant that the acknowledgment is not done by any Assessing Officer, but mostly by ministerial staff. Can it be said that any assessment is done by them? The reply is an emphatic no. The intimation under section 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. 15. The next question to be considered is whether the said intimation being a demand under Section 156 of the Act, can a revision under 264 be filed. Section 156 reads as under:- 156. Notice of demand.- When any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under this Act, the Assessing Officer shall serve upon the assessee a not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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