TMI Blog1994 (11) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... return on 31-3-1992 declaring total income at Rs. 8,44,42,809. This was also processed by the Assessing Officer under section 143(1)(a) on 18-5-1992 and the earlier two additions of Rs. 14,722 and Rs. 1,685 were repeated by him. The total income assessed under section 143(1)(a) came to Rs. 8,44,59,216. 3. The Assessing Officer passed an order under section 143(3) of the Act for assessment year 1990-91 on 30-12-1992 on total income of Rs. 4,28,81,010. On the basis of this order for assessment year 1990-91, the Assessing Officer processed the case of the assessee for assessment year 1991-92 under section 143(1)(b) of the Act. While passing order under section 143(1)(b) on 5-2-1993, the Assessing Officer made an addition of Rs. 1,64,62,908 to the total income already assessed under section 143(1)(a) on 18-5-1992 at Rs. 8,44,59,216. The addition of Rs. 1,64,62,908 was made by withdrawing deductions under section 80HH (Rs. 73,16,848) and under section 80-1 (Rs. 91,46,060) in respect of Poanta Sahib unit. It may be mentioned that the assessee-company has its head office at Ludhiana where no manufacturing activity is carried on and has two units at Barnala and Poanta Sahib. It may also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible in respect of a particular unit in the absence of positive income, then it was beyond the scope of section 143(1)(b). It was pointed out that for making any such addition the correct course was to pass an order under section 143(3) of the Act. 6. On merits, it was submitted that so far as deduction under section 80HH was concerned, the matter stood settled in favour of the assessee by the Supreme Court decision in the case of CIT v. Patiala Flour Mills Co. (P.) Ltd. [1978] 115 ITR 640. Our attention was specifically drawn to the discussion at page 646 of the report in which it was observed by the Supreme Court that whatever be the profits or gains of the new industrial undertaking computed for purposes of arriving at the total income chargeable to tax, would have to be taken to be the profits or gains for applying the provisions contained in section 80J(1) of the Act. It was also pointed out that the Supreme Court further observed that sub-section (1) of section 80J does not create a legal fiction that for purposes of applying the provisions contained in that sub-section the profits or gains of the new industrial undertaking shall be computed as if the new industrial underta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of the information available in such returns etc., was prima facie admissible but which was not claimed in the return had to be allowed. Similarly, any loss carried forward, deduction, allowance or relief claimed in the return which on the basis of the information available in such return etc., was prima facie inadmissible had to be disallowed. It was presumed that the assessee would claim proper deduction, allowance or relief in the return. 9. There could, however, be a situation where the assessee may claim deduction, allowance or relief on the basis of certain circumstances which may undergo a change when an earlier assessment was completed by the Assessing Officer after the submissions of the return for the subsequent year. In such a situation, where for instance, the loss claimed by an assessee at a particular amount had been reduced as a result of an earlier assessment completed after the filing of the return for the subsequent assessment year, section 143(1)(b) provided that where as a result of orders passed under various sections specified in section 143(1)(b) subsequent to the filing of the return, there was variation in the carryforward of loss, deduction, allowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of variation in loss, relief etc., is not fulfilled, then no adjustment can be made under section 143(1)(b) of the Act and no intimation issued to the assessee. In such a situation where a different view is taken in an earlier assessment year and that view the Assessing Officer wants to adopt in subsequent year, then the right course would be not to take resort to section 143(1)(b) but to issue a notice under section 143(2). It is under section 143(2) that the Assessing Officer with a view to ensuring that the income has not been understated or the loss declared is not excessive or tax has not been underpaid, he can serve upon the assessee a notice and then make the assessment under section 143(3) or under section 144 of the Act. Section 143(2) can also be resorted to where the Assessing Officer considers it necessary or expedient to verify the correctness or completeness of the retum.This, however, cannot be allowed in section 143(1)(b) of the Act. The scope of section 143(1)(b) is, therefore, limited. This can be illustrated by an example. Supposing in the return for assessment year 1991-92, the assessee claims a brought forward loss of Rs. 10 lacs. The assessment for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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