| SooperKanoon Citation | sooperkanoon.com/68933 |
| Court | Income Tax Appellate Tribunal ITAT |
| Decided On | Mar-31-1997 |
| Appellant | All India Flat Tape Manufactures |
| Respondent | income-tax Officer |
The ITAT by its order dated 19-12-1989 held that the assessee was entitled to exemption under section 11 as the provisions of section 13(1)(c) were not applicable.
2. So far as assessment year 1989-90 is concerned, the assessee filed its return of income claiming exemption under section 11. The Assessing Officer made adjustment under section 143(1)(a). In an explanatory sheet relating to the adjustment, the Assessing Officer stated that exemption under section 11 was not being allowed since the provisions of section 13(1)(b) and 13(c)(ii) were applicable in this case. Hence, the Assessing Officer assessed the total income of the assessee at Rs. 9,02,950 by allowing expenditure of Rs. 2,53,090 from the gross total income of Rs. 11,56,042. Additional tax of Rs. 90,452 was also raised in addition to the demand of tax and interest made in the adjustment as mentioned above.
3. The assessee filed an appeal before the CIT (Appeals). The CIT (Appeals), however, after making detailed discussions of the matter held that an appeal against an adjustment made under section 143(1)(a) was not maintainable. Accordingly, he dismissed the appeal.
4. The assessee has come up in further appeal before us against the aforesaid order of the CIT (Appeals). Almost the same arguments as put forward before the CIT (Appeals), have been taken up before us also.
First, it is contended by the learned counsel for the assessee that an intimation in respect of adjustment disallowing the claim of the assessee towards exemption and creating huge tax demand thereby itself constitutes an assessment inasmuch as the total income of the assessee was determined in a manner other than as disclosed by the assessee in the return of income filed by it and demand of tax, interest and additional tax was also made therein. In support of this contention, reliance has been placed on the following two judgment of the Supreme Court : The Supreme Court held in the case of E. Alfred (supra) that the word "assessment" bears different meanings and in one sense it comprehends the entire process of computation and levy of lax. This judgment was, however, given by the Supreme Court in the context of whether the legal representative of a dead assessee becomes an assessee by fiction.
In the case of Kalawati Devi Harlalka (supra) again, the same principle was reiterated by the' Supreme Court.
5. The learned counsel for the assessee has thereafter argued that in the above way, an intimation under section 143(1)(a) is required to be considered as an assessment order. He has referred to the wordings of the said clause in accordance with which the intimation under this clause shall be deemed to be a notice of demand issued under section 156 and that all the provisions of the Income-tax Act shall apply accordingly. The learned counsel for the assessee has thereafter referred to the provisions of section 156. The said section reads as below : "156. When any tax, interest, penalty fine or any other sum is payable in consequence of any order passed under this Act, the Assessing Officer shall serve upon the assessee a notice of demand in the prescribed from specifying the sum so payable." It is the contention of the learned counsel for the assessee that since an intimation under section 143(1)(a) is deemed to be a notice of demand under section 156, it should be held that the said notice of demand is issued in consequence of an order passed under the Income-tax Act. In that way, it is contended that the intimation itself to be considered as an order. Furthermore, it is argued that since the assessee densities liability to the extra and additional tax as raised in the intimation, the intimation being of the nature of an assessment order is to be considered as appealable in view of the judgment of the Supreme Court in he case of Central Provinces Manganese Ore Co. Ltd. v.CIT [1986] 160 ITR 961/27 Taxman 275.
6. There is no doubt about the fact that the intimation under section 143(1)(a) should specify the amount of tax payable and it shall also be deemed as a notice under section 156. That by itself, however, does not mean that the intimation becomes an order itself for the purpose of the Income-tax Act. Section 156 certainly provides that the notice of demand is to be issued whenever any tax, interest, penalty, etc., is payable in consequence of an order passed under the Income-tax Act. The section, however, never says that a notice of demand cannot be issued in a case where no such order is passed under the Act. Hence, it is not possible for us to accept the contention of the assessee that simply because an intimation under section 143(1)(a) is deemed to be a notice under section 156, the intimation itself partakes of the character of an order under the Income-tax Act.
7. The learned counsel for the assessee has also brought our notice to the definition of 'order' as per Law Lexicon. According to the same, an 'order' as a noun has been held equivalent or synonymous with 'decision'. The learned counsel for the assessee has argued in this connection that since the intimation is certainly of the nature of a decision arrived at by the Assessing Officer, it must be considered to be an order also. We are unable to agree with this particular contention also. The term 'order' is nowhere defined in the Income-tax Act. Hence, whether an intimation can be considered to be an order or not is to be decided from the relevant provisions of the Income-tax Act itself.
In this connection, the learned DR has done a very useful work by bringing our notice to the provisions of section 154. Sub-section (1) of this section reads as below : "154(1) With a view to rectifying any mistake apparent from the record, an income-tax authority referred to in section 116 may, - (b) amend any intimation sent by it under sub-section (1) of section 143, or enhance or reduce the amount of refund granted by it under that sub-section." It is required to be noted in this connection that the Legislature has used two different clauses, one in respect of an order passed under the provisions of the Income-tax Act and the next one for the intimation under section 143(1). Had the contention of the assessee that an intimation is also an order under the Income-tax Act been correct, then clause (b) of sub-section (1) of section 154 becomes redundant. In interpretation of statutes, it is not possible to hold that any particular clause used separately and specifically by the Legislature is redundant. Hence, we are of the view that the Legislature has taken into consideration the fact that an intimation under section 143(1) is not to be considered as an order under the Income-tax Act. The Law Lexicon does not spell out the definition of any word in an absolute manner for all purposes. It is an acknowledged principle of jurisprudence that the same word may be used in different senses not only in different Acts but also sometimes in different portions of the same Act. Exactly in which sense a word has been used will have to be determined from the context in which it is used. In the instant case, as discussed by us above, there cannot be any doubt about the fact that the Legislature has definitely meant to make a distinction between an order under the Income-tax Act and the intimation under section 143(1)(a). So far as the decision of the Supreme Court in the case of Central Provinces Manganese Ore Co. Ltd. (supra) is concerned, the said decision merely states that levy of interest is also a part of the assessment order. The judgment of the Supreme Court in this case cannot be stretched to the extent to consider an intimation under section 143(1)(a) also as an order.
Thereafter, the learned counsel for the assessee has made strong efforts to argue that an intimation under section 143(1)(a) is appealable by relying on the following decisions of Tribunal : In both these cases, the Tribunal merely held that assessments made under section 143(1) under the provisions of the Income-tax Act prior to the amendment with effect from 1-4-1989 are appealable. There cannot be any doubt about the fact that section 143(1) prior to the amendment with affect from 1-4-1989 envisaged assessments made under that subsection and, hence, an order under section 143(1) is certainly an assessment order by itself. In the instant case, we have already held that an intimation under section 143(1)(a) is not even an order, not to speak of being an assessment order. Hence, these two decisions holding that assessment orders made under section 143(1), prior to the amendment are appealable, would not at all apply to the present case.
8. The learned counsel for the assessee argued thereafter that even if an intimation under section 143(1)(a) be not considered to be an order, still the same envisages making prima facie adjustment only. It is contended that in this particular case, the claim of the assessee towards exemption was denied, which was not at all permissible on the basis of the return of income and enclosures thereto and, hence, the adjustment made in this regard cannot at all be considered to be of the nature of prima facie adjustment. It is thus argued by the learned counsel for the assessee that the intimation thus par takes of the character of an assessment order made under section 143(3) or 144 and in that way becomes appealable. In support of his contention, he has relied on the decision of the ITAT, Delhi Bench, in the case of G.L.
Verma v. ITO [1993] 46 ITD 360 (Delhi)(SMC) in which case it has been held that when adjustments made in the intimation under section 143(1)(a) are not of the nature of prima facie adjustments, and when such adjustments actually made should have been done so after issue of a notice under section 143(2), the intimation under section 143(1)(a) tantamounts to an order passed under section 143(3) and in that way, it becomes appealable. With due respect, it is submitted here that the above judgment was passed by a Single Member Bench of ITAT, Delhi Bench. We respectfully differ from the view taken therein that simply because adjustments not of the nature of prima facie adjustments have been made in an intimation under section 143(1)(a), the same becomes an assessment made under section 143(3).
9. The learned DR has also strongly contended that an intimation under section 143(1)(a) is not an order as envisaged in the Income-tax Act.
As discussed above, we agree with his views. Thereafter, the learned DR has argued that there is no inherent right for an appeal and that unless the right to appeal is conferred by the statute, the assessee cannot avail himself of such a right. In support of this contention, the learned DR has placed reliance on a host of decisions as below : (iii) Caltex Oil Refining (India) Ltd. v. CIT [1993] 202 ITR 375 (Bom.), (iv) CIT v. Garware Nylons Ltd. [1995] 212 ITR 242/79 Taxman 322 (Bom.).
Finally the learned DR has relied on the judgment at Allahabad High Court in the case of Indo-Gulf Fertilizers & Chemicals Corpn. Ltd. v.Union of India 10. There cannot be any doubt about the fact that unless a right to appeal is conferred by the relevant Statute, the assessee cannot appeal against a particular action of an Executive. It is also an undisputable fact that an intimation under section 143(1)(a) has not been mentioned as appealable in section 246. The learned CIT (Appeals) has made detailed discussions in his appellate order by referring to the Memorandum explaining the provisions of the Direct Taxes Law (Amendment) Acts, 1987 and 1989 and as detailed in Circular No. 549.
According to the said circular, if an ITO makes an adjustment which is not of the nature of prima facie adjustment, his action in that regard being in contravention of the provisions of the Act would clearly be a mistake. The circular states clearly that in such circumstances, the assessee can make an application under section 154 for rectification of the relevant mistake. Any refusal to carry on the rectification as prayed for by the assessee would clearly be appealable.
We have already held that an intimation under section 143(1)(a) is not an "order". We cannot find out that any right to appeal against such intimation is provided anywhere in the Income-tax Act. We cannot also agree with the contention of the learned counsel for the assessee that an intimation in which undue and illegal adjustments have been carried on, should be treated as an assessment order under section 143(3) or under section 144. The reliance placed by him on the decision of the Bombay High Court in the case of Navinchandra Mafatlal v. CIT [1955] 27 ITR 245 as upheld by the Supreme Court at CIT v. Navinchandra Mafatlal [1961] 42 ITR 53 also does not help the assessee inasmuch as according to such decisions, it is open to the Court to decide which is the proper provision of the law under which an order should have been made even if the ITO may state that he has made it under a particular section, whereas in the present case, the intimation cannot be considered as an order at all and, hence, the intimation cannot be equated with an order under the other provisions of the Income-tax Act.
It is also worthwhile to note that the decision of the Allahabad High Court in the case of Indo-Gulf Fertilisers & Chemicals Corpn. Ltd. (supra) is so far the only one on the issue as to whether an appeal lies against an intimation under section 143(1)(a). The learned counsel for the assessee has argued in this connection that what the Allahabad High Court held is that levy of additional tax under section 143(1A) as such is not appealable. Our view is however that additional tax under section 143(1A) arises out of the intimation under section 143(1)(a).
By holding that levy of additional tax is not appealable, the Allahabad High Court has actually held that an intimation under section 143(1)(a) itself is not appealable. Since this is the only decision of a High Court, though not of the jurisdictional High Court on this particular issue, certainly this judgment has got a persuasive value. Hence, we feel ourselves inclined to follow the ratio decidendi of the said judgment.
We also find that the assessee had an alternative remedy of filing a rectification petition and getting the matter disposed of in its favour even by way of filing appeals in case of refusal to carry out the rectification, if any. Instead of treading along the aforesaid straight course, the assessee wants to get its appeal admitted when the appeal does not at all lie against the intimation. Finally, we agree with the learned CIT (Appeals) that an intimation under section 143(1)(a) is not appealable as such.