Case Note & Summary
The petitioners, Spaco Carburettors India Ltd. and Mrs. Meena Jaytinbhai Bhatt, filed a writ petition challenging an intimation issued under Section 143(1)(a) of the Income Tax Act, 1961 for the assessment year 1989-1990. The assessee had filed its return on December 29, 1989, claiming a deduction of Rs.1,01,15,244/- as revenue expenditure on acquiring technical know-how. An intimation under Section 143(1)(a) was issued on April 16, 1990 accepting the return. Subsequently, the assessing officer rectified this intimation under Section 154, disallowing the expenditure on the ground that it was capitalised. The assessee then filed a revised return on March 26, 1991, seeking deductions under Sections 32, 32A, and 35AB by treating the expenditure as acquisition of plant. On July 5, 1991, the assessing officer issued a notice under Section 143(2) calling upon the assessee to attend with documents and evidence in support of the revised return. The assessee responded on August 1, 1991, placing submissions on record. However, instead of passing a regular assessment order under Section 143(3), the assessing officer issued an intimation dated July 29, 1991 under Section 143(1)(a) making adjustments without considering the claim in the revised return. The short point raised was whether the assessing officer, after issuing a notice for regular assessment under Section 143(2), could issue an intimation under Section 143(1)(a). The court held that once a notice under Section 143(2) is issued, the assessing officer must proceed to make a regular assessment under Section 143(3) and cannot revert to issuing an intimation under Section 143(1)(a). The intimation issued after the Section 143(2) notice is without jurisdiction and void. The court allowed the petition and quashed the intimation dated July 29, 1991, directing the assessing officer to proceed with the regular assessment in accordance with law.
Headnote
A) Income Tax - Regular Assessment vs. Intimation - Section 143(1)(a) and 143(2) of the Income Tax Act, 1961 - Jurisdiction - The assessing officer issued a notice under Section 143(2) calling for documents and evidence, but instead of completing the assessment under Section 143(3), issued an intimation under Section 143(1)(a) making adjustments. The court held that once a notice under Section 143(2) is issued, the assessing officer must proceed to make a regular assessment under Section 143(3) and cannot issue an intimation under Section 143(1)(a). The intimation issued after the Section 143(2) notice is without jurisdiction and void. (Paras 1-7)
Issue of Consideration
Whether the assessing officer, after issuing a notice for regular assessment under Section 143(2) of the Income Tax Act, 1961, is justified in issuing an intimation under Section 143(1)(a) of the said Act?
Final Decision
The court allowed the petition and quashed the intimation dated July 29, 1991 issued under Section 143(1)(a) of the Income Tax Act, 1961. The assessing officer was directed to proceed with the regular assessment in accordance with law.
Law Points
- Once a notice under Section 143(2) is issued
- the assessing officer must complete the assessment under Section 143(3) and cannot revert to issuing an intimation under Section 143(1)(a)
- the intimation issued after such notice is without jurisdiction and void.
