THE COMMISSIONER OF INCOME TAX V. M/S THANDAVA AGRL AND CHEMICAL INDUSTRY

RC/30/2001

AI Insights

The case revolves around the interpretation of Sections 143(1)(a) and 154 of the Income Tax Act, 1961, concerning the rectification of an intimation that does not specify any tax payable or refund due. The assessee had filed a return declaring a loss, which was accepted by the assessing officer without any tax or interest being due. Subsequently, the assessing officer attempted to initiate proceedings under Section 154, which were deemed void by the Commissioner Appeals and the Tribunal. The Tribunal's decision, supported by precedents, affirmed that such an intimation, if it does not specify any tax or interest due, cannot be subject to rectification under Section 154.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 679570 (HC-INDIA)
• Appeal Type: Others
• Pronouncement Date: 18-02-2014
• Assessment Year: misc
• Other Referred Cases: Kerala State Coir Corporation Limited vs. Dy. CIT, Commissioner of Income Tax vs. Kerala State Coir Corporation Limited
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Applicant
• Court: HIGH COURT
• Keywords: Income Tax; Intimation; Jurisdiction; Rectification; Nonest in law
• Section: 154; 143(1)(a)

Judgement Text

"HON’BLE SRI JUSTICE G. CHANDRAIAH AND HON’BLE SRI JUSTICE CHALLA KODANDA RAM R.C. No.30 OF 2001 ORDER:- (per Hon’ble Sri Justice Challa Kodanda Ram) At the instance of the Revenue as directed by this Court by order dated 07.10.1999 in I.T.C.No.63 of 1999, the following question of law said to be arising out of the order dated 27.02.2001 of the Tribunal has been referred to this Court for its opinion. “Whether an intimation under Section 143(1)(a) which does not speak of any tax payable or refund of tax can be rectified under Section 154 of the Income-tax Act, 1961 or not”? 2. The brief facts of the case are that the assessee filed its return of income on 18.12.1989 declaring the loss of Rs.2,35,211/-. In the intimation form attached to the return also the loss return was shown as Rs.2,35,211/-. In the statement of assessable income filed along with return, the assessee debited the depreciation to the profit and loss account and shown loss at Rs.2,35,211/-. The said loss did not include any depreciation. It is also found that the assessee did not lay any claim for any depreciation. While processing the return under Section 143(1) of the Income Tax Act (for short “the Act”), the assessing officer had made an endorsement on the docket that the return loss is accepted. Thereafter, proceedings under Section 154 of the Income Tax Act were sought to be initiated and consequently the same were initiated. The Commissioner Appeals cancelled the additional tax levied under Section 143(1)(a) of the Act and further held that the very proceedings under Section 154 of the Act initiated by the assessing officer are void and without jurisdiction and inasmuch as there was no intimation or order in the instant case for the assessing officer to be rectified. Revenue’s appeal before the Tribunal came to be dismissed following the judgment of the Income Tax Appellate Tribunal, Cochin Bench in the case of Kerala State Coir Corporation Limited vs. Dy. CIT[1]. The Tribunal held that the order passed under Section 154 of the Act is nonest in law. As a matter of fact, on this aspect, the High Court Kerala had affirmed the decision of the Tribunal in the case of Commissioner of Income Tax vs. Kerala State Coir Corporation Limited[2]. We see no infirmity in the order passed by the Tribunal as it is settled now by catena of judgments that in case of an order passed under Section 143(1)(a) of the Act accepting the return where no tax or interest was due by the assessee, the assessing officer was not empowered to send an intimation to the assessee in terms of second proviso to the Section 143(1)(a) of the Act. Even assuming any such intimation is given, the same is nonest in the eye of law. As such any proceedings initiated under Section 154 of the Income Tax Act for rectifying the mistake would be totally illegal and without jurisdiction as the very intimation itself is non-existing. This settled legal proposition is not disputed by the learned counsel for the revenue. 3. Accordingly, the Referred Case is disposed of answering the question in favour of the assessee and against the revenue. No order as to costs. Miscellaneous Petitions, if any, pending in this R.C shall stand closed. ____________________ G. CHANDRAIAH,J ____________________________ CHALLA KODANDA RAM,J Date:18.02.2014. Gk HON'BLE SRI JUSTICE G. CHANDRAIAH AND HON’BLE SRI JUSTICE CHALLA KODANDA RAM R.C. No.30 OF 2001 Date:18.02.2014. Gk [1] 50 ITD 1 [2] (2001) 252 ITR 503 (Ker) "