COMMISSIONER OF INCOME TAX Vs. SITARAM TEXTILES

JUDGEMENT

(1.) These income-tax reference cases arise from orders of the Tribunal issued for the asst. yrs. 1989-90 and 1990-91. Loss returns filed by the assessee for the above two years were accepted by the AO and intimations were sent under Section 143(1)(a) of the IT Act. Regular assessment was completed for the asst. yr. 1990-91 under Section 143(3) of the Act after issuing notice under Section 143(2) of the Act. Later, the AO noticed that the intimations sent were incorrect inasmuch as adjustments towards prima facie inadmissible items namely, disallowance under Rules 6B, 6D and Section 37(2A) were not made. Accordingly notices were sent under Section 154(1)(b) of the Act and assessments were rectified vide two orders dt. 8th Feb., 1994 produced as Annex. A to the reference case. In the appeals filed by the assessee, the CIT(A) held that the proceedings sent under Section 143(1)(a) on 31st Aug., 1990 and 28th Feb., 1991 for the respective assessment years do not constitute intimations under Section 143(1)(a) of the Act. Consequently he cancelled the rectification orders in which additional tax was demanded under Section 143(1A) of the Act. In second appeal filed by the Department before the Tribunal, Tribunal confirmed the orders of the CIT(A). It is against these orders reference was sought by the Department and the Tribunal has referred the following two questions of law for our decision:

(2.) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in cancelling the rectification order

(3.) On going through the Tribunal s order, the decision of this Court abovereferred and after hearing both sides, we feel the Tribunal has committed errors not only on facts but with reference to statutory provisions also. In the first place, on going through the records available with the assessee we find that returns were acknowledged on the date of filing it i.e. on 29th Dec, 1989 for the year 1989-90 and on 31st Dec, 1990 for the year 1990-91. It is seen from Annex. A produced for both the years that the returns were processed and intimations were sent, though without demand, on 31st Aug., 1990 and 28th Feb., 1991. The CIT(A) and the Tribunal have also referred to these intimations issued under Section 143(1)(a) which are not acknowledgements of filing of returns. The question, therefore, to be considered is whether a proceeding sent pursuant to filing of returns without demand of tax or interest is an intimation under Section 143(1)(a) of the Act. We notice that there is a specific proviso in Section 143(1) which is as follows: