COMMISSIONER OF INCOME TAX, RAIPUR vs. NARENDRA KUMAR GUPTA

GRAL ORDER {Passed on 26‘“ February, 2007) The foliowing oral order of the Court was passed by H.L. Dattu! C.J. The assessee is a Deveropment Officer of Life insurance Corporation of India (hereinafter for the eake of brevity referred to as ‘Corporation’). While working as development officer in the ’ Corporation, he had received certain allowances such as incentive bonus and conveyance allowance. "rheessessee in the return of income filed under Section 139 of the income Tax Act (“the Act”! for short) had claimed deductions of the same. The Assessing Gfficer had disaliowed the claim of 40% of the deductions from incentive ' bonus on the basis of circular of C.B.D.T. bearing No.1738 dated . 1—4-1 987. ln so far as conveyance aiiowance is concerned, the (a , Assessing Officer had aHowed deductions to the extent of Rs.88,?99f—. All this was done by the Assessing authority while issuing intimation under $ection 143(i)(a) of the Act to the a$Se$SQe . 2)- The assessee, aggrieved by the aforesaid disallowance made in the intimation so issued by the Assessing Officer under Section 143 (1) (a) of the Act} had filed an appeai before the First Appeiiate Authority‘ The Appeiiate Authority had rejected the assessee‘s apoeai. Thereafter, the assessee had carried the I matter before the Tribunai, in i.T.A.No. 4521Nag/2061. The Tribunal, being of the view that the claim made by the assessee is debatable issue. and therefore, the Assessing Authority could not have made any prima facie adjustment and accordingly has : ‘ ailowed the assessee‘s appeal and has set aside the orders passed by the First Appellate Authority as weii as the Assessing : Officer for the assessment year 1998-99. 3) The Revenue, being aggrieved by the order passed by the Tribunai has filed this appeal under Section 260-A of the Act. _ Revenue has raised the foiiowing question of iaw for consideration and decision of this Court. \i t, “Whether on the facts and in the circumstances of the case, the teamed income Tax Appellate Tribunal was justified in reversing the order of ths teamed , Commissioner of income Tax (Appeals) confirming prime facie adjustment made by the Assessing Officer uls 143 (1)(a) disaiiowing the deduction claimed by the assesses from incentive bonus received from LIC and in directing the Assessing Gificer to deiete the said disailowance.”

4) Shri Amit Choudhary, 'earned counsel appearing for the Revenue, would contend that the ‘Tribunat was not justified in holding that the Assessing Ofncer could not have made prime facie adjustment by issuing intimation under Section 143(1)(a) cf the Act, and therefore, the Tribunal was'not justified in-aiiowing the assessee’s appeal. 5) Shri Shashank Dubey, teamed Sr. Advocate appearing for g the assessee, wouid submit that the adjustments made by the Assessing Officer white issuing intimation ‘under section 143(1)(_a) of the Act, are debatable issues and, therefore, the Assessing Gmcer Gould not have processed the return tiled by the assesses under Section 143(1)(a) of the Act. in support to his contention, the learned Senior Counsel has reiied up‘on the decision of the Madhya Pradesh High Court in the case of Kama! Textiles and Pradesh High Court has observed as under: ““i‘he provisions of Section 143(1)(a)(t) of the income Tax Act, 1961, are not opposed to nature! justice and are not uitra vires. The intimation under the provision is issued on the basis of the assessee’s own return. V What is permissibie to be adjusted are {5) oniy apparent arithmeticai errors in the return,.accounts or documents accompanying the return, {ii}; teas carried forward, deduction, ailowance or reiiefg which is prima facie admissibie on the basis of information avaiieble in the return but not ciaimed in the return, and, similariy, (iii) those claims which are on the basis of information r available in the return, prima facie, inadmissible, are to— be disailowed. The assessing authorig ‘is' not ,4 germitted under the guise of Wmaking adiustment to , adiudicate‘ ugon any debata‘bie issue. Section ' i43(1)(a‘; is not opposed to “naturai iustice. The Pr°¥i§i9n is irate " (emohaeis suppiiedby us)

6} In the instant case, the assessee had filed the return of income for the assessment year 1998-99 and in that he had ciaimed deductions of the conveyance aliowance and incentive bonus received by him in the previous year relevant to the assessment year. The Assessing Wicer while issuing intimation under Section 143(1)(a) of the Act, has adjudicated upon debatable issues. The juri iction of the Assessing Officer under $ection 143(1)(a) of the Act, is explained by various courts. The repetition of the same, in our opinion, is unnecessary. it is suffice to state that the juri iction of the Assessing Officer under Section 143(1)(a) of the Act, to make an adjustment and issue intimation is limited not only to be obvious but also what is deducibie from the return as tiled by the assessee, without doubt or debate. ln View of the above, the Assessing authority couid not have proceeded to process the return tiled by the assessee under Section 143(1)(a) of the Act. Therefore, the question of law raised by the appellant/Revenue for consideration and decision of this Court requires to be answered in favour of the assessee and against the revenue. Accordingly, the question of law raised by the appellant/Revenue is answered in fJavgur of the assessee and against the Revenue. éaa, ,ix \ _ r VTL/l/\ I Sti/- "‘7: TV Chief Justice a i'l V.K. Shrivastava r Judge / x