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Judgment
This appeal has been filed by the assessee, seeking to challenge the order of the learned Tribunal dt. 13th March, 2002, so far it relates to IT Appeal No. 1762/Jp/1994, for the asst. yr. 1992-93.
The facts of the case are, that vide Annex. 1, dt. 11th Nov., 1992, the Dy. CIT (Assessment), Special Range, Jodhpur, sent intimation to the appellant, whereby he intimated amount, determined by him, to be payable by the assessee. This was done in exercise of powers u/s 143(1)(a) of the IT Act, 1961. Thereafter, the appellant was sent notice dt. 9th Dec, 1992, for the regular assessment, fixing the hearing on 8th Jan., 1993. However, during the course of assessment proceedings, the notice was served on the appellant u/s 154 of the Act on 21st Jan., 1993, proposing to make the prima facie adjustment on account of provisions of gratuity u/s 40A(7), and it is alleged, that the appellant filed revised return, declaring the loss of Rs. 55,04,885 for the asst. yr. 1992-93, on 25th Jan., 1993, instead of the declared loss of Rs. 56,57,685. Then intimation u/s 143(1)(a) was sent to the assessee vide order dt. 28th Jan., 1993, and provisionally assessed/determined the loss at Rs. 53,76,603, and accordingly, the demand was created. Thereafter, the regular assessment, for the asst. yr. 1992-93 was made vide assessment Order dt. 25th Feb., 1993, computing and assessing the loss of Rs. 16,73,887, and observing rather finding, that the addition of Rs. 2,81,082 made through prima facie adjustment, do not require any modification or amendment, and the observations made in the order dt. 28th Jan., 1993, apply here also, and were treated as integral part of the assessment order. This assessment order has been produced as Annex. 5. Against this, an appeal was filed by the assessee, u/s 246 of the IT Act, 1961, and the learned CIT(A) accepted the same partly, and remanded back to the AO, with the direction to re-examine, and to pass fresh order, after affording the assessee opportunity to lead evidence, in support of the claims, while observing, that regular assessment proceedings u/s 143(3) are different from the proceedings u/s 143(1)(a).
Aggrieved of this, the Revenue filed an appeal before Tribunal, and Tribunal accepted the appeal vide Order dt. 13th March, 2002. The assessee seeks to challenge the order of the learned Tribunal allowing the appeal of the Revenue, being Appeal No. 1762/1994.
The Tribunal has found, that Section 246 of the Act provides for a separate appeal against the order u/s 143(1)(a), and therefore, the CIT(A) had no jurisdiction to decide the issue. It was found, that the AO has passed the order u/s 154(1)(b), and therefore, the findings recorded by the CIT(A), were reversed on the ground of his having no jurisdiction to decide the issue, in appeal against the order made u/s 143(3) of the Act.
This appeal was admitted vide order dt. 8th Sept., 2003, by formulating the following three substantial questions of law:
(A) Whether the Tribunal, Jodhpur Bench, Jodhpur was illegally (sic-legally) justified in accepting the appeal, filed by the AO, relating to the asst. yr 1992-93 vide appellate Order dt. 13th Feb., 2002, in view of the instant facts and circumstances of the case, hereinbefore duly mentioned in the para Nos. 1 to 14 of this appeal.
(B) Whether the Tribunal, Jodhpur Bench, Jodhpur was illegally (sic-legally) justified in accepting the appeal, filed by the AO, relating to the asst. yr. 1992-93 inter alia holding that Section 246 of the Act, provides for separate appeal, against the order u/s 143(1)(a) of the IT Act, 1961 and the CIT(A) Jodhpur, has and had no jurisdiction to decide the issue, in the appeal, which has been filed against the assessment passed u/s 143(3) of the IT Act, 1961, in view of the settled proposition of law that the intimation, which is being sent to the assessee, as per the provisions laid down u/s 143(1)(a) of the Act, after making the prima facie adjustment or subsequently modified or amended, vide rectified intimation, u/s 143(1)(a) r/w Section 154(1)(b) of the Act, is nothing, but the provisional assessment of prima facie adjustment or adjustments for levying additional tax payable u/s 143(1A) of the IT Act 1961, and the same is merged with the final assessment, made u/s 143(3) of the Act.
(C) Whether the provisions laid down in u/s 246 of the Act, for filing separate appeal against the order u/s 143(1)(a) of the Act, and for non-filing of appeal by the assessee, debars the right of the assessee, for challenging the issue in this respect during the assessment proceedings u/s 143(3) of the Act, and for filing the appeal u/s 246 of the Act and equally the appellate authority has and had no jurisdiction to decide the issue in the appeal against the assessment order u/s 143(3) of IT Act, 1961.
A bare reading of the questions would show, that the basic controversy is, as to whether the order u/s 143(1)(a), was, or being appelable, and no appeal having been filed, and order having been modified u/s 154(1)(b), whether it is open to the assessee, to assail the conclusions recorded in the order u/s 143(1)(a) r/w Section 154(1)(b), in an appeal against the regular assessment order, made u/s 143(3) of the Act.
A look at the provisions of Section 246 of the IT Act, which provides for appeal, and which has been taken into consideration by the learned Tribunal, shows, that as it existed at the relevant time, it did not permit filing of any appeal, against any order made u/s 143(1)(a). This Section 246 has undergone amendments from time to time, and the relevant amendment was made w.e.f. 1st June, 1994, whereby the provision for appeal, against an intimation u/s 143(1) or 143(1B) was provided to lay. There is nothing to show, that this amendment was made to apply to the orders passed till then. At the cost of repetition, it may be noticed, that the intimation u/s 143(1)(a) is, as old as 11th Nov., 1992, while as noticed above, relevant amendment in Section 246 of the Act has been made only w.e.f. 1st June, 1994, obviously, meaning thereby, that at the time, when the determination was made u/s 143(1)(a), and/or intimation was sent to the assessee, he had no remedy of any appeal. That being the position, obviously, the assessee could very well assail the correctness of the determination made or findings recorded in that order u/s 143(1)(a), in the appeal to be filed against the regular assessment made u/s 143(3).
Thus, it is also clear, that the learned Tribunal has proceeded on basic misconception of law, about the availability of right of appeal to the assessee, against determination, or intimation, u/s 143(1)(a).
In view of the above conclusions, all the questions, as formulated, are required to be answered in favour of the assessee, and against the Revenue, and are accordingly, answered.
The net result is, that the appeal is allowed. The impugned order of the Tribunal is set aside.
Since the Tribunal has not gone into the merits of the determination, (and has set aside the order of the CIT, simply on the ground of his having no jurisdiction to decide the issue, in the appeals, we think it appropriate to remand the matter back to the learned Tribunal, to decide the correctness of the findings of the CIT, on its own merits, and in accordance with law.