Macro Services Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 4526/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73993 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 20-03-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 24-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Assessee Lawyers: VED GUPTA
• Keywords: Rectification of order
• Section: 143(3); 90; 154

Judgement Text

SIN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO.4526/DEL/2012 ASSESSMENT YEAR : 2003-04 MACRO SERVICES PVT. LTD., VS. INCOME-TAX OFFICER, 5/60, WEA, KAROL BAGH, WARD-6(1), NEW DELHI NEW DELHI P AN NO.AAACM 4964 A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VED GUPTA, CA RESPONDENT BY : SHRI SAMEER SHARMA, SR. DR ORDER PER U.B.S. BEDI, JM: THIS APPEAL OF THE ASSESSEE EMANATES FROM TH E ORDER PASSED BY LEARNED CIT(A)-IX, NEW DELHI DATED 18.05.2 012 FOR ASSESSMENT YEAR 2003-04 IN RELATION TO ORDER PASSED BY THE ASSESSING OFFICER U/S 154 OF THE ACT WHEREBY FOLLOWING SINGLE GROUND HAS BEEN TAKEN:- THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND FACTS BY HOLDING INTIMATION U/S 143(1)(A) AS ORDER UNDER THE PROVISION OF SECTION 154(7) OF INCOME-TAX ACT, 1961 IGNORING PROVISIONS OF SECTION 154(1)(A) OF INCOME- TAX ACT, ACCORDING TO WHICH RESTRICTION OF AMENDMENT U/ S 154 WITHIN 4 YEARS IS APPLICABLE ONLY TO ORDER AND NOT TO AN INTIMATION U/S 143(1)(A) OF INCOME-TAX ACT, 1961 . 4526-2012 -MICRO SERVICES 2 2. BRIEF FACTS AND BACKGROUND OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2003-04 DATED 15.10.2003 AT RS. 50,270/-. THE SAME WAS PROCESSED U/S 143(1) OF THE ACT ON 28.10.2003 AT RS 1,01,600/- IGNORING DEDUCTION OF RS. 48,820/- WHICH WAS CLAIMED U/S 80HHE/80G OF THE ACT , AND A DEMAND OF RS. 21,278/- WAS RAISED. LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS NEVER SERVED WITH A NY INTIMATION U/S 143(1) OR DEMAND NOTICE FOR ASSESSMENT YEAR 200 3-04 AND IT WAS ONLY WHEN HE FOLLOWED UP THE ISSUE OF OUTSTANDING R EFUND FOR ASSESSMENT YEAR 2007-08, IT WAS INFORMED THAT THE R EFUND OF RS. 18,750/- HAS BEEN ADJUSTED AGAINST THE DEMAND FOR A SSESSMENT YEAR 2003-04. THE ASSESSEE THEREAFTER SUBMITTED AP PLICATION U/S 154 OF THE ACT ON 25.4.2011 WHICH WAS REJECTED BY T HE ASSESSING OFFICER AS PER HIS ORDER DATED 18.01.2012 AS UNDER: - IN THIS CONNECTION, IT IS INFORMED THAT THE PROCEE DING U/S 143(1) OF THE I.T. ACT WAS COMPLETED ON 28.10.20 03 AND YOU HAVE FILED YOUR RECTIFICATION APPLICATION U/S 154 OF THE I.T. ACT ON 25.4.2011. ACCORDINGLY TO SECTI ON 154(7) OF THE I.T. ACT, NO AAMENDMENT /UNDER /THIS SECTION SHALL BE MADE AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORD ER SOUGHT TO BE AMENDED WAS PASSED. THEREFORE, YOUR APPLICATION FOR RECTIFICATION IS HE REBY REJECTED. 4526-2012 -MICRO SERVICES 3 2.1 THE ASSESSEE TOOK UP THE MATTER IN APPEAL AND PLEADED AS UNDER:- 1. ASSESSEE HAS SUBMITTED ITR FOR ASSESSMENT YEAR 2003-04 DECLARING INCOME OF ` 50,270/- WHICH WAS PROCESSED U/S 143(1)(A) OF INCOME-TAX ACT, 1961 AT RS. 101,600/- IGNORING DEDUCTION OF RS. 48,820/- CLAIMED U/S 80HHE/80G OF INCOME-TAX ACT, 1961 AND A DEMAND OF ` 21,278/- WAS COMPUTED IN RECORDS ON 28.10.2003. 2.ASSESSEE WAS NOT SERVED ANY INTIMATION U/S 143(1)( A) OR DEMAND NOTICE U/S 156 FOR THE ASSESSMENT YEAR 200 3- 04. 3.A SUM OF RS. 18,750/- WAS DETERMINED AS REFUND DUE TO ASSESSEE FOR ASSESSMENT YEAR 2007-08 WHICH HAS BEEN ADJUSTED AGAINST DEMAND OUTSTANDING IN RECORDS FOR TH E ASSESSMENT YEAR 2003-04. THE REFUND HAS BEEN ADJUSTE D IGNORING PROVISIONS OF SECTION 245 OF INCOME-TAX AC T, 1961 WITHOUT SERVICE OF ANY NOTICE TO ASSESSEE. 4.A COPY OF PROCESSING U/S 143(1)(A) FOR ASSESSMENT YEAR 2003-04 HAS BEEN PROVIDED ON REQUEST OF THE ASSESSEE ON 4.4.2011 AFTER ASSESSEE CAME TO KNOW ADJUSTMENT OF REFUND DUE FOR ASSESSMENT YEAR 2007-08. 5.ASSESSEE HAS SUBMITTED AN APPLICATION U/S 154 OF T HE INCOME-TAX ACT FOR RECTIFICATION OF PROCESSING U/S 143(1)(A) FOR ASSESSMENT YEAR 2003-04 ON 21.4.2011. 6.THAT APPLICATION U/S 154 FILED BY THE ASSESSEE FOR RECTIFICATION OF INTIMATION U/S 143(1)(A) HAS BEEN 4526-2012 -MICRO SERVICES 4 WRONGLY REJECTED UNDER THE PROVISION OF SECTION 154( 7) OF INCOME-TAX ACT, 1961. INTIMATION U/S 143(1)(A) H AS BEEN WRONGLY TREATED AS ORDER WHILE IT IS ONLY AN INTIMATION FOR PROCESSING OF INCOME TAX RETURN BY TH E ASSESSING OFFICER PROVISIONS OF SECTION 143(1)(A) A ND 154(7) OF INCOME-TAX ACT, 1961 ARE AS UNDER:- PROVISIONS OF SECTION 143(1) OF INCOME-TAX ACT, 196 1: 143(1) WHERE A RETURN HAS BEEN MADE U/S 139, OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION (1) OF SECTIO N 142, SUCH RETURN SHALL BE PROCESSED IN THE FOLLOWING MANNER:- A) THE TOTAL INCOME OR LOSS SHALL BE COMPUTED AFTER MAKING THE FOLLOWING ADJUSTMENT NAMELY:- I) ANY ARITHMETICAL ERROR IN THE RETURN; OR II) AN INCORRECT CLAIM, IF SUCH INCORRECT CLAIM IS APPARENT FROM ANY INFORMATION IN THE RETURN; B) THE TAX AND INTEREST, IF ANY SHALL BE COMPUTED ON TH E BASIS OF THE TOTAL INCOME COMPUTED UNDER CLAUSE(A): C) THE SUM PAYABLE BY, OR THE AMOUNT OF REFUND DUE TO, THE ASSESSEE SHALL BE DETERMINED AFTER ADJUSTMENT OF THE TAX AND INTEREST, IF ANY, COMPUTED UNDER CLAUSE (B) BY ANY TAX DEDUCTED AT SOURCE, ANY TAX COLLECTED AT SOURCE, ANY ADVANCE TAX PAID, ANY RELIEF ALLOWABL E UNDER AN AGREEMENT U/S 90 OR SECTION 90A, OR ANY RELIEF ALLOWABLE U/S 91, ANY REBATE ALLOWABLE UNDER 4526-2012 -MICRO SERVICES 5 PART A OF CHAPTER VIII, ANY TAX PAID ON SELF- ASSESSMENT AND ANY AMOUNT PAID OTHERWISE BY WAY OF TAX OR INTEREST; D) AN INTIMATION SHALL BE PREPARED OR GENERATED AND SENT TO THE ASSESSEE SPECIFYING THE SUM DETERMINED TO BE PAYABLE BY, OR THE AMOUNT OF REFUND DUE TO, THE ASSESSEE UNDER CLAUSE ; AND E) THE AMOUNT OF REFUND DUE TO THE ASSESSEE IN PURSUANCE OF THE TERMINATION UNDER CLAUSE (C) SHALL BE GRANTED TO THE ASSESSEE; PROVIDED THAT AN INTIMATION SHALL ALSO BE SENT TO T HE ASSESSEE IN A CASE WHERE THE LOSS DECLARED IN THE RETURN BY THE ASSESSEE IS ADJUSTED BY NO TAX OR INTEREST IS PAYABLE BY, OR NO REFUND IS DUE TO, HIM: SECTION 154(7) OF INCOME-TAX ACT, 1961: SAVE AS OTHERWISE PROVIDED IN SECTION 155 OR SUB SECTION (4) OF SECTION 186 NO AMENDMENT UNDER THIS SECTION SHALL BE MADE AFTER THE EXPIRY OF FOUR YEARS (FROM THE END OF THE FINANCIAL YEAR IN WHICH THE OR DER SOUGHT TO BE AMENDED WAS PASSED) U/S 143(1)A INCOME TAX RETURN SUBMITTED BY ASSESSEE I S PROCESSED AND NO ORDER IS PASSED ONLY AN INTIMATION FOR COMPUTATION OF TAX IS SENT TO ASSESSEE WHICH CANNOT BE TAKEN AS ORDER. 4526-2012 -MICRO SERVICES 6 INCOME OF ASSESSEE IS ASSESSED U/S 143(2)/143(3) OF INCOME-TAX ACT, 1961 AND ASSESSMENT ORDER IS PASSED AFTER ASSESSMENT U/S 143(3) OF INCOME-TAX ACT, 1961. THAT IN TERMS OF DECISION HELD IN THE CASE OF CIT V S. PUNJAB NATIONAL BANK 2001) 249 ITR 763 (DELHI) IT HA S BEEN HELD THAT AN INTIMATION U/S 143(1) CANNOT BE TREATED TO BE AN ORDER. 2.2 LEARNED CIT(A) WHILE CONSIDERING BUT NOT ACCEP TING THE PLEA OF THE ASSESSEE RAISED ON DIFFERENT COUNTS HAS CONCLUDED TO DISMISS THE APPEAL WHILE CONFIRMING THE ORDER OF AS SESSING OFFICER AS PER PARA 6, 6.1 AND 6.2 OF HIS ORDER AS UNDER:- 6. I HAVE CONSIDERED THE FINDINGS RECORDED BY THE LEARNED ASSESSING OFFICER AS PER THE ASSESSMENT ORD ER, THE SUBMISSIONS MADE BY THE LEARNED AR AND THE FACTS OF THE CASE ON RECORD. CHALLENGING THE ACTION OF T HE LEARNED ASSESSING OFFICER IN INVOKING THE PROVISION S OF SECTION 154(7) OF THE ACT, THE APPLICANT HAS CONTEN DED THAT AN INTIMATION U/S 143(1) CANNOT BE TAKEN AS AN ORDER. IN THIS REGARD THE APPELLANT HAS PLACED REL IANCE ON THE DECISION IN THE CASE OF CIT VS. PUNJAB NATION AL BANK (SUPRA). IT IS, HOWEVER, SEEN THAT THE PROVIS IONS OF SUB SECTION (1) OF SECTION 154 OF THE ACT ARE CATEG ORICAL IN THIS REGARD AND AS PER /THE SAME IT HAS BEEN SPE CIFIED THAT THE INCOME TAX AUTHORITIES, WHICH INCLUDE THE ASSESSING OFFICER, MAY AMEND ANY ORDER PASSED BY IT OR 4526-2012 -MICRO SERVICES 7 AMEND ANY INTIMATION UNDER SECTION 143(1) OF THE ACT . THE RELEVANT PROVISIONS OF THE SUBSECTION ARE REPRODUCED HERE IN UNDER: WITH A VIEW OF RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD AN INCOME-TAX AUTHORITY REFERRED TO IN SECTION 116 MAY, A) AMEND ANY ORDER PASSED BY IT UNDER THE PROVISIONS OF THIS ACT; B) AMEND ANY INTIMATION OR DEMAND INTIMATION UNDER SUB-SECTION (1) OF SECTION 143. 6.1 IN VIEW OF THE AFORESAID CATEGORICAL PROVISIONS OF THE LAW, I DO NOT FIND ANYTHING WRONG IN THE ACTION OF THE LEARNED ASSESSING OFFICER IN TREATING THE INTIMATION AS AN ORDER AS REFERRED TO IN THE PROVISIONS OF SECTION 154(7) OF THE ACT. IT MAY FURTHER BE SAID THAT THE APPELLANT HAS SELECTIVELY QUOTED THE OBSERVATION OF HONBLE HIGH COURT IN THE CASE OF PUNJAB NATIONAL BANK (SUPRA) THAT THE INTIMATION U/S 143(1)(A) CANNOT BE TREATED TO BE AN ORDER OF ASSESSMENT. THE SAID DECISION WAS RENDERED BY HONBLE HIGH COURT IN TOTALLY DIFFERENT FACTS AND CIRCUMSTANCES. THE QUESTION BEFORE THEIR LORDSHIPS IN THIS CASE WAS AS TO WHETHER THE ITAT WAS CORRECT IN REACHING TO THE CONCLUSION THAT THE ACTION TAKEN U/S 154 OF THE 4526-2012 -MICRO SERVICES 8 ACT WAS NOT LEGAL AFTER ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. IT WAS WITH REFERENCE TO THE AFORESAID QUESTION THAT THEIR LORDSHIPS OBSERVED THAT THE INTIMATION U/S 143(1)(A) CANNOT BE TREATED TO BE AN ORDER OF ASSESSMENT AND HELD THAT WHERE, AFTER AN INTIMATION WAS SENT TO THE ASSESSEE U/S 143(1)(A), THE ASSESSING OFFICER ISSUED NOTICE U/S 143(2) BUT, THEREAFTER, BY ORDER U/S 154, RECTIFIED THE INTIMATION, THEN IF ANY CHANGE WAS PERMISSIBLE TO BE EFFECTED, THE SAME COULD BE DONE IN THE ASSESSMENT U/S 143(3) AND NOT BY EXERCISING POWER U/S 154 TO RECTIFY THE INTIMATION ISSUED U/S 143(1)(A). IT CAN THUS BE SEEN THAT THE DECISION WAS RENDERED IN COMPLETELY DISTINGUISHABLE FACTS AND CIRCUMSTANCES AND HENCE THE OBSERVATION OF HONBLE HIGH COURT THAT THE INTIMATION U/S 143(1)(A) CANNOT BE TREATED TO BE AN ORDER OF ASSESSMENT CANNOT BE APPLIED TO THE FACTS OF THE CASE UNDER CONSIDERATION IN VIEW OF THE CATEGORICAL PROVISIONS OF CLAUSE (A) OF SUBSECTION (1) OF SECTION 154 OF THE ACT. 6.2 UNDER THE CIRCUMSTANCES, I DO NOT FIND ANY REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LEARNED ASSESSING OFFICER. THE ACTION OF THE 4526-2012 -MICRO SERVICES 9 LEARNED ASSESSING OFFICER, IS ACCORDINGLY CONFIRMED. 2.3 STILL AGGRIEVED, THE ASSESSEE HAS FILED FURTHE R APPEAL AND WHILE REITERATING THE SUBMISSIONS AS MADE BEFORE TH E ASSESSING OFFICER AND LEARNED CIT(A) IT WAS PLEADED FOR ACCEP TING THE PLEA AS RAISED THAT TIME PERIOD OF FOUR YEARS CANT BE APPL IED IN THE CASE OF INTIMATION WHICH IS NOT AN ORDER AS ALSO HELD BY HO NBLE DELHI HIGH COURT IN THE CASE OF CIT VS. PUNJAB NATIONAL BANK. SO, APPEAL SHOULD BE ACCEPTED AND MATTER BE RESTORED TO ASSESSING OFF ICER FOR PASSING RECTIFICATION ORDER AS SOUGHT. 2.4 LD. DR HAS STRONGLY RELIED UPON THE ORDER OF THE LD CIT (A) AND PLEADED FOR ITS CONFIRMATION. IT WAS PLEADE D THAT SINCE APPLICATION HAS BEEN MADE BEYOND FOUR YEARS, THEREF ORE, ACTION OF THE ASSESSING OFFICER IN REJECTING THE SAME AND ORD ER OF CIT)A CONFIRMING THE ACTION OF ASSESSING OFFICER IS FULLY JUSTIFIED, WHICH MAY BE FURTHER CONFIRMED. 3. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MA TERIAL ON RECORD AND CASE LAW CITED AND FIND THAT RELEVANT PROVISIONS IN RELATION TO TIME LIMIT FOR PASSING RECTIFICATION OR DER IS GIVEN UNDER SECTION 154(7), WHICH READS AS UNDER:- 154. (7) SAVE AS OTHERWISE PROVIDED IN SECTION 155 OR SUB -SECTION (4) OF SECTION 186 NO AMENDMENT UNDER THIS SECTION S HALL BE MADE AFTER THE EXPIRY OF FOUR YEARS (FROM THE END O F THE 4526-2012 -MICRO SERVICES 10 FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE AMEN DED WAS PASSED. AND, SUB-SECTION 1 OF THE SECTION 154 READS AS UN DER:- 154. (1) WITH THE VIEW TO RECTIFYING ANY MISTAKE A PPARENT FORM THE RECORD AN INCOME-TAX AUTHORITY REFERRED TO IN SECTION 116 MAY,- (A) AMEND ANY OTHER ORDER PASSED BY ITS UNDER THE PR OVISIONS OF THIS ACT; (B) AMEND ANY INTIMATION OR DEEMED INTIMATION UNDER SUB- SECTION (1) OF SECTION 143 (C) AMEND ANY INTIMATION UNDER SUB-SECTION (1) OF SE CTION 200A 4. FROM THE PERUSAL OF THE ABOVE NOTED PROVISIONS WE NOTE THAT PROVISION TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD BY AN INCOME-TAX AUTHORITY IS SEPARATELY ENVISAGED IN CLAUSE (B) AND (C) OF SUB-SECTION (1) OF SECTION 154, CLAUSE (A) T ALKS ABOUT ORDER PASSED WHEREAS CLAUSE (B) OF SUB-SECTION 1 OF SECT ION 154 ENVISAGES AMENDMENT OF ANY INTIMATION/ DEEMED INTIMATION UNDE R SUB- SECTION 1 OF SECTION 143(1), WHEREAS SECTION 154(7) AS REPRODUCED IN EARLIER PART OF THIS ORDER STIPULATES TIME LIMIT OF FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER TO BE AMENDED WAS PASSED, SINCE IT TALKS ABOUT ORDER, AND INTIMATIO N CANNOT BE TERMED AS ORDER ESPECIALLY WHEN SEPARATE PROVISION FOR AMENDMENT OF AN ORDER AND AMENDMENT OF INTIMATION/DEEMED INTI MATION IS THERE, THEREFORE, THE ACTION OF ASSESSING OFFICER I N REJECTING THE APPLICATIONS MOVED UNDER SECTION 154 TO AMEND INTIM ATION ON THE POINT OF LIMITATIONS, IN OUR CONSIDERED VIEW, IS NO T JUST AND PROPER. AS SUCH WHILE ACCEPTING THE APPEAL OF THE ASSESSEE WE SET ASIDE THE ORDERS OF BOTH THE AUTHORITIES AND RESTORE THE MATT ER BACK TO THE 4526-2012 -MICRO SERVICES 11 FILE OF THE ASSESSING OFFICER WITH A DIRECTION THAT HE SHALL CONSIDER AND DECIDE THE APPLICATION OF THE ASSESSEE ON MERIT S AND PASS ORDER AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSE SSEE. WE HOLD AND DIRECT ACCORDINGLY. 5. AS A RESULT APPEAL OF THE ASSESSEE GETS ACCEPTED . 6. ORDER PRONOUNCED ON 03 RD JAN., 2014. SD./- SD./- ( SHAMIM YAHYA ) ( U.B.S. BEDI ) ACCOUANTANT MEMBER JUDICIAL MEMBER DT. 03 RD JAN., 2014 NS/SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-IX, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).