Calcutta High Court
M/S. Warren Tea Limited vs Assistant Commissioner Of Income Tax on 24 February, 2016
W.P. No. 112 of 2005
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
Original Side
M/s. Warren Tea Limited
Vs.
Assistant Commissioner of Income Tax,
Circle-5, Kolkata & Ors.
For the Petitioner : Mr. J.P. Khaitan, Sr. Advocate
Ms. N. Pal, Advocate
Mr. U.S. Menon, Advocate
Mr. A. Chakraborty, Advocate
For the Respondents : Mr. S.B. Saraf, Advocate
Hearing concluded on : February 10, 2016 Judgment on : February 24, 2016 DEBANGSU BASAK, J.:-
Could the assessing officer invoke the provisions of Section 142(1) of the Income Tax Act, 1961 after an order under Section 143(3)(ii) of the Act of 1961 by the appellate forum in the facts of this case is the issue falling for consideration in this petition ?
It is submitted on behalf of the petitioner, subsequent to the petitioner filing the return the assessing officer had issued a notice under Section 143(2)(i) of the Act of 1961 on February 3, 2003. Pursuant thereto the petitioner had appeared before the assessing officer and had also replied thereto by a writing dated February 5, 2004. The assessing officer had issued an intimation dated March 31, 2003 under Section 143(1). The assessing officer had thereafter issued a notice under Section 143(2)(ii) dated October 22, 2003. The petitioner had replied thereto. According to the petitioner, the assessing officer had computed the assessment under Section 143(3)(ii) on March 31, 2004. The petitioner had preferred an appeal therefrom. During the pendency of the appeal, the assessing officer had purported to invoke Section 142(1) of the Act of 1961 by the impugned notice dated July 26, 2004. The appeal was disposed of on October 28, 2004. Subsequent to such decision in the appeal the assessing officer had threatened to impose penalty under Section 271(1)(b).
It is submitted on behalf of the petitioner that, after completion of an assessment Section 142(1) of the Act of 1961 has no manner of application. The invocation of such provision by the assessing officer in the facts of this case is wrongful.
Learned Advocate for the department submits that, the assessee is trying to take benefit of a bona fide mistake on the part of the department. The assessment order was under Section 143(3)(i) and not under Section 143(3)(ii) as mistakenly stated in the order. The department can correct such error under Section 292B of the Act of 1961. The department had done so. Consequently, the assessing officer retains the jurisdiction to invoke Section 143(2)(ii). Therefore, the assessing officer had issued the notice under Section 142(1). There is no infirmity in such course being adopted.
I have considered the rival contentions of the parties and the materials made available on record.
The petitioner filed a return for the assessment year 2002-03 with the Income Tax authorities. The assessing officer issued a notice under Section 143(2)(i) of the Act of 1961 on February 3, 2003. The petitioner replied thereto by a letter dated February 5, 2004. The assessing officer sent an intimation dated March 31, 2003 under Section 143(1) of the Act of 1961. The assessing officer issued a notice under Section 143(2)(ii) of the Act of 1961. The authorised representative of the petitioner appeared before the assessing officer on November 19, 2003 pursuant to such notice. The assessing officer completed the assessment on March 31, 2004. The assessment order speaks that, the same was done in terms of Section 143(3)(ii) of the Act of 1961. The petitioner preferred an appeal therefrom. During the pendency of the appeal the assessing officer issued a notice under Section 142(1) of the Act of 1961. The appeal was disposed of on October 28, 2004. The petitioner protested against the invocation of Section 142(1) of the Act of 1961. The assessing officer threatened to proceed ex parte against the petitioner and to invoke the provisions of Section 271(1)(b) of the Act of 1961.
The assessing officer has proceeded under Section 143(3)(ii) of the Act of 1961 in respect of the relevant assessment year. He has passed his order on March 31, 2004. An appeal preferred therefrom was disposed of on October 28, 2004. Both the assessing officer and the appellate forum has proceeded on the basis that, the assessment for the relevant assessment year was done under Section 143(3)(ii) of the Act of 1961.
Section 142 of the Act of 1961 allows the assessing officer to make an enquiry before the assessment. In the present case the assessment was contemplated under Section 143(3)(ii) of the Act of 1961 prior to the issuance of the notice under Section 142 of the Act of 1961. In fact the appellate authority has also proceeded on the basis of the provisions of Section 143(3)(ii) of the Act of 1961. In such circumstances it would not be permissible for the assessing officer to reopen the assessment for the relevant financial year after having assessed it under Section 143(3)(ii) of the Act of 1961.
The contention that, there was a mistake in the order of assessment under Section 143 and, therefore, such mistake was sought to be corrected is not available to the Department particularly in view of the fact that, the appellate forum has also proceeded on the basis that an assessment under Section 143(3)(ii) of the Act of 1961 has taken place in respect of the relevant assessment year.
In such circumstances the impugned action of the Department in issuing a notice under Section 142 of the Act of 1961 and all consequential steps taken thereunder are set aside.
W.P. No. 112 of 2005 is allowed. No order as to costs.
[DEBANGSU BASAK, J.]