TMI Blog2009 (3) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 154 for rectification of intimation issued under Section 143 (1) (a) ? (ii) Whether and in any event the Tribunal was justified in law in holding that opportunity was granted to the appellant before passing the order under Section 154 and issuing the revised intimation and its purported findings in that behalf are arbitrary, unreasonable and perverse? (iii) Whether and in any event the order under Section 154 and revised intimation both bearing the date February 6, 1995 served on the appellant on December 11, 1996 were barred by limitation and the Tribunal was justified in law in not deciding the said contention and its purported findings in that behalf are arbitrary, unreasonable and perverse ? (iv) Whether and in any event the Tribunal was justified in law in upholding the disallowance of provident fund contribution actually paid by the appellant on the ground that payment was not made within the statutory period? For the assessment year 1994-95 the appeal was also admitted on the following substantial questions of law :- (i) Whether the Tribunal was justified in law in holding that disallowance under Section 43B in respect of provident fund could be made as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e return loss to Rs. 12,85,267/-. Being aggrieved, the assessee preferred an appeal before Commissioner of Income Tax [hereinafter referred to as "the C.I.T. (A) "]. Such appeal was filed on the question of the jurisdiction of the Assessing Officer and it is admitted that the order and the revised intimation dated February 6, 1995 was duly served by Registered Post on December 9, 1996 by the Department and received by the assessee on December 11, 1996. According to the appellant the said revised rectification order were time barred. After hearing the parties the said appellant had rightly invoked Section 154 and disallowed the Provident Fund. The assessee preferred an appeal before the Learned Tribunal since the question of limitation was not decided by the Commissioner of Income Tax on the question that the said revised intimation and the order both were passed without service of notice under Section 154 and were time barred. Such points were also canvassed before the Learned Tribunal and on merits it was submitted that the contribution paid towards Provident Fund by the assessee in terms of the order passed by the Hon'ble Court and as such was required to be treated as having b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djustment. The assessee filed appeal before the Tribunal and on January 29, 2003 the Tribunal upheld the disallowance of Rs.14,21,289/-. A miscellaneous application was also filed by the assessee before the Tribunal. It was also dismissed by the Tribunal. Hence this appeal has been filed. Learned Counsel appearing on behalf of the appellant contended that the disallowance in both the years has been made with regard to the provision of Section 43B. Section 43B was inserted in the Act by the Finance Act, 1983 with effect from April 1, 1984, providing for deduction of certain amounts only upon actual payment irrespective of the method of accounting employed by the assessee. The object of introduction of the said Section 43B was to disallow the claims for deduction of statutory liabilities which were being disputed by the assessee and not paid by them but nevertheless claimed as a deduction on the basis of mercantile system of accounting. He also drew attention to the two provisions which were inserted under Section 43B with effect from April 1, 1988. He also drew our attention to the Finance Act of 2003 by which the said Section 43B was amended with effect from April 1, 2004. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1991) 196 ITR 55, a Division Bench of the Bombay High Court held that (at page 71): This is because the scope of the powers to make prima facie adjustments under Section 143(1)(a) is somewhat conterminous with the power to rectify a mistake apparent from the record under Section 154……….In its literal sense, 'prima facie' means on the fact of it. Hence, on the face of the return and the documents and accounts accompanying it, the deduction claimed must be inadmissible. Only then can it be disallowed under the proviso to Section 143(1)(a). If any further enquiry is necessary, or if the Income-Tax Officer feels that further proof is required in connection with the claim for deduction, he will heave to issue a notice under sub-Section (2) of Section 143". See also SRF. Charitable Trust V. Union of India (1992) 193 ITR 95 (Delhi). In Circular No. 581 (see [1990] 186 ITR (St.) 2] dated September 28, 1990, issued by ;the Central Board of Direct Taxed, it has been said that the scope of the powers to make prima facie adjustments under Section 143(1)(a) is "somewhat conterminous with the power to rectify a mistake apparent from the record under Section 154". The nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer do not apparently disclose what were the due dates of the said contributions. Therefore, it does not appear that without holding further enquiry from the records, it was apparent on the face of it that the said contributions were paid after the due dates. In such circumstances on the said allegation, the notice under Section 154, could not have been issued and the proceedings following such notice is apparently bad. The law relied on by Learned Counsel for the appellant in this connection also supports such view. Further in respect of payment of such contributions, the due date has to be ascertained and a finding has to be arrived at as to whether such due date is the one referred to under Section 139 of the Act or its due date under the relevant Act which provides for the payment of contributions and provident fund and Employees' State Insurance contributions. As apparently no opinion could be formed from the records available on the face of it for deciding such due date, the power under Section 154 could not have been exercised for rectification of the order earlier passed". In the instant case also, the "due date" for payment of the Provident Fund contribution within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been so considered and decided. (2) Subject to the other provisions of this section, the authority concerned - (a) may make an amendment under sub-section (1) of its own notice, and (b) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee, and where the authority concerned is the Deputy Commissioner (Appeals) or the Commissioner (Appeals), by the Assessing Officer also : From 14-5-1992 :Finance Act, 1992 : A proviso to sub-section (2) was inserted with effect from the date on which the Finance Act, 1992, received the assent of the President, i.e., 14-5-92. As per the existing provisions, an assessee can file an application for rectifying any mistake in the intimation referred to in clause (a) of section 143(1). However, he has no right of appeal against such intimation. The above insertion provides the Assessing Officer is required to take action on such application for rectification within a period of 3 months from the end of the month in which the application is filed. The assessee has the right to appeal to the Deputy Commissioner (Appeals), if no action has been taken by the Assessing Office within the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial year in which the order sought to be amended was passed. In the instant case the original intimation under Section 143(1)(a) was issued on June 30, 1990. Therefore, an order under Section 154 could have been passed within four years from the end of the Financial Year 1990-91 i.e. by March 31, 1995 and further prior to passing of the order, notice and opportunity of being heard was required to be given. It is submitted that the CIT(A) did not decide the said question and from the fact it appears that the CIT(A) dismissing the assessee's ground as infructuous. On the ground that the Assessing Officer had jurisdiction to act under Section 154. It further appears from the fact as pointed out by the Learned Counsel appearing on behalf of the assessee that the Tribunal held contrary to the records that the assessee had not raised the question either before the CIT(A) although it is submitted that the assessee has specifically pleaded the fact relating to the question of limitation in the appeals filed before the CIT(A) and also argued the same at the hearing before both the said appellate authorities. It is further submitted that the finding of the Tribunal as regards the serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was sent by Registered Post on December 9, 1996 and received by the assessee on December 11, 1996. Therefore, it is clearly comes within the purview of Section 154 of the said Act. It further appears that from the decision of the Tribunal, it appears that although the Tribunal has decided the question by its order dated August 4, 2003 and held that the assessee had no mention either before the CIT(A) or before the Tribunal regarding time barred and that it was not the new ground which was not raised before lower authority. From the pleadings and from the submission as made it appears that the said point was duly placed before the CIT (A) as well as before the Tribunal not only that the assessee has filed a miscellaneous application before the Tribunal and the Department/revenue did not produce any evidence before the said authority on the question of service of notice under Section 154. Hence, after analyzing the facts and the decisions cited before us, we do not have any hesitation to hold that the question No. (i) in each of the years should be answered in the negative and in favour of assessee. Since we have answered the question in favour of the assessee. In our consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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