Income Tax Appellate Tribunal - Delhi
Electra (India) Ltd. vs Deputy Commissioner Of Income-Tax on 24 July, 2002
Equivalent citations: [2003]84ITD103(DELHI)
ORDER
Diva Singh, Judicial Member
1. These are two appeals filed by the assessee against separate orders of CIT(A), Meerut dated 29-5-1997 pertaining to 1994-95 and 1995-96 assessment years.
2. No one appears for and on behalf of the assessee-appellant but after perusing the material on record and having heard the learned DR, it was considered appropriate to dispose the present appeals ex parte qua the assessee-appellant on merits.
3. The grounds raised in ITA No. 4530/Delhi/97 read as under :-
1. That the learned CIT (Appeals) and Assessing Officer erred in law and fact by making the adjustment under Section 143(1)(a) where the notices under Sections 142(1) and 143(2) has been issued. Hence the addition made under Section 143(1)(a) is illegal, uncalled for arbitrary where the notice under Sections 142(1) and 143(2) has been issued.
2. That on the facts and in the circumstances of the case there was no legal warrant to make addition of Rs. 4,29,267 more particularly when the assessment was made as a scrutiny assessment with the issue of notice under Sections 142(1) and 143(2).
3. That the impugned addition of Rs. 4,29,267 being illegal void and without jurisdiction deserves to be deleted.
4. That the tax liability aggregating Rs. 44,228 being illegal without jurisdiction deserves to be quashed.
4. The relevant facts of the case are that the Assessing Officer vide intimation under Section 143(1)(a) disallowed the claim of deduction of the assessee of Rs. 4,29,267 under Section 43B on account of actual payment of PF and EPF etc. relevant for the assessment year 1993-94 on the ground that in view of the second proviso to Section 43B, payments could only be allowed as deduction if made during the prescribed limit under the said provision.
5. Aggrieved by this, in appeal before the first appellate authority, it was contended that on filing of the return, the Assessing Officer under the scheme for assessment under Section 143 of the Act had two options namely either to accept the return under Section 143(1) with necessary adjustments if any or to proceed to make assessment under Section 143(3) or under Section 144 by issuing a notice under Section 143(2) of the Act. Thus, once the Assessing Officer had exercised an option under Section 143(3) by issuing notice under Section 143(2) of the Act, then even if adjustments that may be made by the Assessing Officer are in order, the Assessing Officer had forfeited the authority to act under Section 143(1) by virtue of having exercised option to make an assessment under Section 143(3) of the Act by issuing a notice under Section 143(2) of the Act. Reliance was placed upon the decision of the Gujarat High Court in the case of Gujarat Poly-Avx Electronics Ltd. v. Dy. CIT [1996] 222 ITR 140 : 89 Taxman 634 and the decision of the Calcutta High Court in the case of Modern Fibotex India Ltd. v. Dy. CIT [1995] 212 ITR 496. Apart from that, it was also contended that the addition of Rs. 4,29,267 has already been made in the past assessment year i.e., 1993-94 and thus, there was no reason to make the same addition in the year under consideration.
6. Considering the submissions of the assessee, the CIT(A) observed that the Delhi High Court in the case of Apogee International Ltd. v. Union of India [1996] 220 ITR 248 : 87 Taxman 198 at page 252 and also Rakesh Aggarwal v. Asstt. CIT [1997] 225 ITR 496 : [1996] 87 Taxman 306 concluded that the view taken by the Calcutta High Court and Gujarat High Court being different, he was inclined to go by the decision of the Delhi High Court and thus relying upon the same, the appeal of the assessee was dismissed. Still aggrieved, the assessee is before us.
7. Learned DR placed reliance on the impugned order.
8. Having heard the learned DR and perused the material placed on our files as well as the decisions relied upon before the CIT(A) and by the CIT(A), we are of the opinion that in the facts and circumstances of the case, the order passed by the first appellate authority was not correct in law. The reliance placed upon the decisions of the jurisdictional High Court in the case of Apogee International Ltd. (supra) and Rakesh Aggarwal's case (supra) is misplaced. In the case of Apogee International Ltd. (supra), by way of a writ, the constitutional validity of Section 143(2) was challenged although at the time of hearing, the constitutional validity of the section was not pressed and the issue which survived for consideration was the legality and validity of the notices issued under Section 143(2) of pae Act after the intimations had been sent to the assessee. After considering the provisions of the law, Their Lordships concluded that the notices issued to the petitioners under Section 143(2) are valid and the stand of the petitioners that on issuance of notices under Section 143(1)(a)(i), the Assessing Officer cannot proceed to issue a notice under Section 143(2) of the Act and the only remedy available to him to make a fresh assessment is to reopen it by taking recourse to Sections 147 and 148 of the Act was held to be misconceived. As such, it is seen that the principle laid down therein was not correctly appreciated by the first appellate authority.
9. Similarly, in the case of Rakesh Aggarwal (supra). Their Lordships, relying upon the case of Apogee International Ltd. (supra) have held that the intimation under Section 143(1)(a) of the Income-tax Act, 1961 even after issue of notice under Section 143(2) does not oust the jurisdiction of the Assessing Officer to issue a fresh notice under Section 143(2), where he considers it to be necessary or expedient to ensure that the assessee has declared his income correctly. Thus, it is seen that the principle enunciated in the above decision also does not help the case of the Revenue. On the other hand, the decisions relied upon by the assessee before the first appellate authority i.e., Gujarat Poly Avx Electronics Ltd. 's case (supra) and Modern Fibotex India Ltd. 's case (supra) fully support the case of the assessee. It is seen that their Lordships of the Gujarat High Court in Gujarat Poly-Avx Electronics Ltd. 's case (supra) have held :-
In this view of the matter, we are of the opinion that after issuance of notice under Section 143(2) of the Act, it is not open to the Assessing Officer to make adjustment or to pass an order under Section 143(1) of the Act, but he has to make assessment in accordance with law, i.e., under Section 143(3) of the Act.
10. A perusal of the decision of the Gujarat High Court shows that they have relied upon the decision of the Calcutta High Court in the case of Modern Fibotex India Ltd. (supra). It is also pertinent to note that the decision of the Punjab and Haryana High Court in CTT v. Arihant Industries Ltd. [2002] 255 ITR 458 has also relied upon the decision of the jurisdictional High Court in the case of CIT v. Punjab National Bank [2001] 249 ITR 763 : 116 Taxman 310. In the facts of the case, it is seen that intimation under Section 143(1)(a) was issued on 10-9-1996 and notice under Section 143(2) was also issued to the assessee which fact was not rebutted by the learned DR. Thus, in the aforementioned facts and circumstances and position of law, we are of the opinion that ground No. 1 raised by the assessee deserves to be allowed.
11. Accordingly, it is seen that ground Nos. 2 and 3 become academic in nature and ground No. 4 being consequential, requires no adjudication.
12. In the result, the appeal filed by the assessee is allowed.
13. In ITA No. 4531/Delhi/97, identical grounds have been raised.
14. Learned DR stated that on identical facts and circumstances, the addition was made by the Assessing Officer in the case of the assessee.
15. Due to the detailed reasons given in the earlier appeal, ground No. 1 raised by the assessee is allowed. Ground Nos. 2 and 3 are academic in nature and ground No. 4 becomes consequential.
16. In the result, both the appeals filed by the assessee are allowed.