TMI Blog1987 (11) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of which the previous year would be the year ending on September 30, 1973. The company submitted their return of chargeable profits for the said previous year on September 30, 1974. In the said return, the company showed their chargeable profits at Rs. 1,53,41,602 and their capital at Rs. 12,64,19,560 and the statutory deduction at Rs. 1,26,41,956. According to the return, the excess of the chargeable profits over the statutory deduction was, therefore, Rs. 26,99,646 and the surtax on such excess chargeable profits at the applicable rate of 25 per cent. would be Rs. 6,74,912. Under section 4 of the 1964 Act, every company is liable to pay for every assessment year commencing on and from April 1, 1964, surtax in respect of so much of its chargeable profits of the previous year or years, as the case may be, as exceed the statutory deduction, at the rate specified in the Schedule to the Act. Section 7 confers upon the Income-tax Officer power to make a provisional assessment before proceeding to make regular assessment under section 6 of the Act. Sections 6 and 7 read as under: "6. Assessment.-(1) For the purposes of making an assessment under this Act, the Income-tax Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to it, shall in no way prejudice the assessee in relation to the regular assessment. (4) There shall be no right of appeal against a provisional assessment made under this section. (5) After a regular assessment has been made, any amount paid or deemed to have been paid towards the provisional assessment made under this section shall be deemed to have been paid towards the regular assessment; and where the amount paid or deemed to have been paid towards the provisional assessment exceeds the amount payable under the regular assessment, the excess shall be refunded to the assessee. " After the return was filed by the company under the 1964 Act, the Income-tax Officer served a notice dated December 20, 1974, under section 7(2) declaring his intention to make a provisional assessment. The statement attached to the notice sets out that the Income-tax Officer proposed to take the chargeable profits of the company at Rs. 1,53,41,602 as per the figure of chargeable profits shown by the company in the said return. The computation of capital was proposed to be taken by the Income-tax Officer at Rs. 10,38,22,259 and the statutory deduction at Rs. 1,03,82,226 as against the capital of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer in the order of provisional assessment were justified, and concluded that in respect of each and every exclusion, the Incometax Officer was in error, as the view taken was in conflict with the law as then existing and which was binding on the Income-tax Officer. It was also held that the Income-tax Officer should not have entered into examination of disputed questions of fact while passing an order of provisional assessment. The learned single judge, on the strength of this finding, set aside the order of provisional assessment and the consequent notice of demand and directed the Revenue to pay the costs of Rs. 1,000 to the company. The judgment delivered by the learned single judge is under challenge in this appeal. Mr. Bhatia, learned counsel appearing on behalf of the Revenue, submitted that the learned single judge was in error in entertaining the petition by exercising writ jurisdiction under article 226 of the Constitution of India when there was an alternate efficacious remedy available to the company. Learned counsel did not dispute that in accordance with sub-section (4) of section 7 of the 1964 Act, an appeal is not provided against the order of provisional assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was decided by the learned single judge by the impugned judgment. Mr. Bhatia then submitted that the learned single judge was in error in holding that while passing an order of provisional assessment under section 7 of the 1964 Act, it is not permissible for the Income-tax Officer to determine complicated questions either of law or of fact. Learned counsel submits that the learned single judge was in error in importing the provisions of section 141 of the 1961 Act while considering the ambit and scope of the section 7 of the 1964 Act. It is not possible to accept the submission of learned counsel. Section 141 of the 1961 Act confers power on the Incometax Officer after the receipt of the return filed under section 139 to make a provisional assessment of the tax payable on the basis of the return and the accounts and documents accompanying the return. The power of provisional assessment under section 141(1) is exercised in a summary manner and the ambit of this power came up for consideration before this court in the case of Burmah Shell Refineries Ltd. v. G. B. Chand, ITO [1966] 61 ITR 493 (Bom). This court pointed out the distinction between a provisional assessment and a reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to determine the liability to tax on any assessee and to quantify that liability. The object being identical in both the cases, the mere fact that a notice is issued to the assessee under section 7 and the provisional order of assessment is passed after considering its objection would not lead to the conclusion that while passing an order of provisional assessment, it is permissible for the Income-tax Officer to ignore the contents of the return and determine disputed questions either of law or fact. In our judgment, the procedure given under section 7 for passing an order of provisional assessment being a summary one, it is not permissible for the Income-tax Officer to determine the disputed questions either of law or fact. The view taken by the learned single judge on this aspect of the matter is correct and is not required to be disturbed in this appeal. Mr. Bhatia then contended that the conclusion recorded by the learned single judge that the Income-tax Officer was in error in excluding certain items while passing the order of provisional assessment is not correct. The submission is not accurate. The first two items excluded by the Income-tax Officer from the computation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee in several decisions. It was contended by Mr. Bhatia that the Supreme Court delivered the judgment on September 25, 1981, in the case of Vazir Sultan Tobacco Co. Ltd. v. CIT [1981] 132 ITR 559, setting aside the view taken by the Tribunal and, therefore, the provisional order of assessment on this count could not have been faulted. It is not possible to accept this submission because the decision of the Supreme Court was recorded only on September 25, 1981, and was not available to the Income-tax Officer when the impugned order of provisional assessment was passed and on that date the decisions recorded by the Tribunal were binding on the Income-tax Officer and it was not permissible for the Income-tax Officer to ignore these decisions and pass an order adverse to the assessee. One more item was in respect of the sum of Rs. 1,26,29,182, being the total amount of deductions claimed under Chapter VI-A of the 1961 Act, in computing the total income. The deductions to be made under Chapter VI-A are different from the types of income which are not includible in the total income under section 10. The learned single judge points out that the conclusion of the Income-tax Officer th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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