INDIAN ALUMINIUM CO LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) Section 143(1) of the Income-tax Act, 1961, as was applicable during the relevant assessment year permitted the Assessing Officer to send an intimation to the assessee specifying the amount of tax payable by him where a return has been made Under Section 139 or in response to a notice under sub-section (1) of Section 142. The statute provided that such intimation shall be deemed to be a notice of demand issued Under Section 156 of the Act and all the provisions of the Act shall apply accordingly. Section 156 of the Act provided that when a tax, interest, penalty, fine or any other sum is pay- able in consequence of any order passed under the Act, the Assessing Officer shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable. At the same time, Section 220(1) of the Act provided that any amount, otherwise than by way of advance tax specified as payable in a notice of demand Under Section 156 shall be paid within 30 days of the service of the notice at the place and to the persons mentioned in the notice. Sub-section (2) of Section 220 of the Act provided that if the amount specified in any notice of demand Under Section 156 is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at one and half per cent, for every month or part of a month comprised in the period commencing from the date immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid. Thus, when an intimation is sent in terms of sub-section (1) of Section 143 of the Act, the assessee is liable to pay the amount mentioned in the intimation within 30 days. In default, he would be liable to pay interest. That being a statutory provision, unless the provision itself is challenged, which has not been done in the instant case, the assessee concerned is liable to pay interest. In the instant case, the subject matter of challenge is such an intimation.

(2.) Sub-section (2) of Section 143 authorised the Assessing Officer in a case referred to in sub-section (1), if the Assessing Officer considered it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under paid the tax in any manner, he shall serve on the assessee a notice requiring him on a date to be specified therein either to attend his office or to produce or cause to be produced there, any evidence on which the assessee may rely in respect of the return. Therefore, whereas by virtue of sub-section (1) of Section 143 of the Act the Assess- ing Officer was authorised to issue an intimation to the assessee when the Assessing Officer found on the basis of the return submitted that any tax or interest is due but has not been paid ; sub-section (2) of Section 143 of the Act authorised the Assessing Officer to issue a notice to the assessee when the Assessing Officer considered it necessary or expedient to ensure that the assessee has not understated the income or has not computed the excessive loss or has not under paid the tax in any manner. When steps are taken under B sub-section (1) of Section 143 of the Act upon issuance of the intimation, the matter stands concluded in so far as the Assessing Officer is concerned. When, however, steps are taken under sub-section' (2) of Section 143, the Assessing Officer starts his work to ensure that the assessee has not paid less tax. Sub- section (3) of Section 143 authorised the Assessing Officer to come to his findings by making an assessment, in order to show that he has discharged his obligation in terms of sub-section (2) of Section 143 of the Act. Therefore, the power exercisable under sub-section (1) of Section 143 stands on a different footing from the power exercisable under sub-section (2) of Section 143 of the Act. It is possible that after the power has been exercised under sub-section (1) of Section 143, it may occur to the Assessing Officer that while issuing the intimation or while issuing the refund, certain things escaped his attention and, accordingly, he has not been able to ensure that the assessee has not under paid tax and, accordingly, he may thereupon take steps under sub-section (2) of Section 143 of the Act. It is, however, not possible to comprehend that the self-same Assessing Officer could exercise power under sub-section (1) of Section 143 of the Act simultaneously with exercise of power under sub-section (2) of Section 143 of the Act. In the instant case, there is no dispute that the intimation under sub-section (1) of Section 143 of the Act was issued on the same date, when the notice under sub-section (2) of Section 143 of the Act was issued. In the affidavit-in-opposition filed by the Income-tax Department it F has not been stated that in point of fact, the intimation under sub-section (1) of Section 143 was issued at an earlier point of time on the same date and subsequent thereto it came to the knowledge of the Assessing Officer that for some reason or the other he has not been able to ensure that the assessee has not under-paid the tax. The conclusion would be, therefore, that the intima- G tion under sub-section (1) and notice under sub-section (2) were issued simultaneously. When steps are taken under sub-section (2) of Section 143, it is commonly known as regular steps to make regular assessment. The same stand culminated upon the making of an assessment order of the total income. Once that order is made, Section 156 of the Act obliges the Assessing Officer to H issue a demand. Section 220 then requires the assessee to pay the same within 30 days from the date of receipt of the demand and in default, to pay interest at the rate of one and half per cent, per month. The assessee is required to pay the amount mentioned in the intimation and in default of payment within 30 days from the date of receipt of the intimation is obliged to pay interest but at the same time the assessment has not reached finality for steps have been initiated under sub-section (2) to ascertain actual tax liability. This is, how- ever, not comprehendible without a just reason in support thereof. The affidavit-in-opposition does not give any such just reason. The Assessing Officer, who has been authorised to do either of these acts, has done both of them on the same date. As aforesaid, one of his actions concludes the matter and the other commences the assessment of the liability.

(3.) In such view of the matter, I think the intimation issued under sub-section (1) of Section 143 of the Act which has been challenged in the instant writ petition cannot be sustained.