TMI Blog2000 (12) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. While completing the assessment, the assessing authority charged interest under section 139(8) and also under section 217 of the Act. In the appeal filed by the assessee before the Commissioner of Income-tax (Appeals), it was contended that the assessment in the case was not a "regular assessment" within the meaning of section 2(40) of the Act and, therefore, no interest could be charged under section 139(8) of the Act. The contention did not find favour with the appellate authority so far as the interest charged under section 217 is concerned, but the contention was accepted in respect of the interest under section 139(8) of the Act. The assessee carried the matter further in appeal to the Income-tax Appellate Tribunal wherein the contention of the appellant as noted above was accepted and the order passed by the assessing authority and confirmed by the appellate authority were set aside. The Tribunal held that the assessment was not a "regular assessment" but only a "reopened assessment" under section 147(a) of the Act. In compliance with the direction of the High Court in a petition filed by the Revenue under section 256(2) of the Act, the following question was referr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Explanation is to be read as a clarificatory or an amendatory provision. It was not disputed before us that if the provision is construed as clarificatory then it will be applicable to the assessment year 1984-85. Section 143 lays down the procedure to be followed in a case where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142. Section 144 deals with the procedure in a case of best judgment assessment which has application if any person fails to make the return required under sub-section (1) of section 139 or fails to comply with all the terms of a notice issued under sub-section (1) of section 142 or having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143. Section 147 deals with the cases of income escaping assessment. Closely linked with it, is section 148 which makes the provision for issue of notice where income has escaped assessment. Both the sections are quoted below : "147. If the Assessing Officer, has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been computed. 148. (1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed ; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139. (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so." That it is so, is clear on a fair reading of section 147 in which provision is made for both assessment and reassessment in a case where any income chargeable to tax has escaped assessment for any assessment year. The proviso treats at par the assessment under section 143(3) and under section 147 and makes no distinction whether the escapement of income is b reason of the failure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 22(2) during the year of assessment itself, as well as an assessment by the issue of a notice analogous to one under section 22(2) in proceedings initiated under section 34(1)(a). In either event, it is nothing more than a regular assessment in the sense that it is an initial assessment made upon the assesses and not an assessment which has once been made but is reopened. The High Court of Delhi construing the term "regular assessment" in the light of the provisions of sections 214, 215, 216 and 244(1)(a) of the Act took a similar view in National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India [1981] 130 ITR 928, wherein it was held, inter alia, that the words "regular assessment" shall, as far as possible, be interpreted consistently in all the provisions in Chapter XVII-C. No difficulty will be caused by its interpretation to mean only the first or the initial assessment. It was also held that for the purposes of sections 214, 215, and 273 there is no reason why an assessment made for the first time under section 143 should be outside the purview of that section. There are indications in sections 215 and 216 itself to show that the expressio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o earlier in this judgment which take a contrary view." A contra view has been taken by a Division Bench of the Gauhati High Court in CIT v. Triple Crown Agencies [1993] 204 ITR 377, in which the court was of the view that a reading of the provisions of sections 139, 143, 147, 148 and 217(1A) of the Act makes it clear that the assessment or reassessment contemplated under section 147 is quite different in nature and content from the assessment under section 143 ; that a proceeding initiated under section 147 and terminating in assessment or reassessment is not a "regular assessment" as contemplated in section 139(8) and to such a case the provisions of section 139(8) cannot apply. Construing Explanation 2 to sub-section (8) of section 139, the High Court took the view that the provision has only widened the scope of the expression "regular assessment" by bringing within its ambit assessment made for the first time under section 147. The amendment has been incorporated in view of the decisions of various High Courts. The amendment to the provision is not clarificatory in nature but is clearly amendatory in nature. The Punjab and Haryana high Court in CIT v. Sushma Saxena (Smt.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and determine the sum payable by him or refundable to him on the basis of the return of income filed by the assessee, if he was satisfied that the return was correct and complete. No enquiry was necessary before passing an order under this sub-section. But, if the Income-tax Officer was not satisfied with a return, he had to serve upon the assessee a notice requiring him to attend his office and produce any evidence on which he may rely in support of the return. After considering the evidence produced by the assessee and after taking into account all relevant material which he had gathered, the Income-tax Officer had to pass an order assessing the total income or loss of the assessee and determine the sum payable by him or refundable to him on the basis of such assessment." It was further observed : "Interest will have to be paid by an assessee, if the advance tax paid is less than seventy-five per cent. of the tax determined on the basis of regular assessment, after giving credit to the assessee for the amount of tax deducted at source. The interest, however, will be paid only up to the date of the regular assessment. It clearly appears from the provisions of section 214 and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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