COMMISSIONER OF INCOME TAX vs. NARENDRA KUMAR GUPTA

ORAL ORDER (Passed on 26th February, 2097) The following oral order. of the Court was passed by H.L. Dattu, C.J. The assessee is a Deveiopment Officer of Life insurance Corporation of india (hereinafter for the sake of brevity referred to as ‘Corporation’). While working as Deveiopment Officer in the Corporation, he had received certain allowances such as incentive bonus and conveyance allowance. The assessee in the return of income filed under Section 139 of the lncomeTax Act (“the Act“, for short) had claimed deductions of the same. The Assessing Officer had disallowed the claim of 40% of the deductions from incentive bonus on the basis of circular of C.B.D.T. bearing No.1738. In so far as conveyance allowance is PETITIONER Commissioner, Income Tax, Raipur (Chhattisgarh) Versus RESPONDENT Shri Narendra Kumar Development Officer, LIC India, Civil

concerned, the Assessihg Officer had allowed deductions to the extent of Rs.40,000/-. Ail this was done by the Assessing Officer while issuing intimation under Section 143(1)(a) of the Act to the assessee, 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 fiied an appeal before the First Appellate Authority. The First Appellate Authority had rejected the assessee’s appeal. Thereafter, the asses‘see had carried the matter before the Tribunal, in |.T.A.No.453/Nag/2001. 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 prime facie adjustment and accordingly has allowed the assessee’s the appeal and has set aside the orders passed by the First Appellate Authority as Well as the AsSessing Officer for the assessment year 1999-2000. 3) The Revenue, being aggrieved by the order passed by the Tribunal, has tiled this appeal under Section 260-A of the Act. The Revenue has raised the following question oft law for consideration and decision of this Court :— “Whether on the facts and in the; circumstances of the case, the learned income Tax Appellate Tribunal was justified in reversing the order of the learned Commissioner of Income Tax (Appeals) confirming prima facie adjustment made by the Assessing Officer u/s 143(1)(a) disallowing the deduction claimed by the assessee from incentive bonus received from LIC and in directing the Assessing Officer to delete the said disalloWance?" r

4) Shri Amit Choudhary, learned counsel appearing for the Revenue, would contend that the Tribunal was not justified in holding that the Assessing Officer could not have made prima facie adjustment by issuing intimation under Section 143(1)(a) of the Act, and therefore, the Tribunal was not justified in allowing the assessee’s appeal and accordingly request this Court to answer the question of law referred by the Tribunal in favour of the Revenue and against the assessee. 5) Shri Shashank Dubey, learned Sr. Advocate appearing for the assessee, would submit that the adjustments made by the Assessing Officer while issuing intimation under Section 143(1)(a) of the Act, are debatable issues and, thetefore, the Assessing Officer could not have processed the retUrnitiled by the assessee under Section 143(1)(a) of the Act. ln support to his contention, r the learned Senior Counsel has relied upon the decision of the Madhya Pradesh High Court in the case of? Kamal Textiles and Pradesh High Court has observed as under: “The provisions of Section 143(1j1)(a)(i) of the Income Tax Act, 1961, are not opposed ito natural justice and are not ultra vires. The intimation junder the provision is issued on the basis of the assessee's own return. What is permissible to be adjusted are (i) only apparent arithmetical errors in the return, accounts or documents accompanying the return, (ii) loss carried forward, deduction, allowance or relief, viihich is prima facie admissible ‘on the basis of information available in the return but not claimed in the return, and, similarly, (iii) those claims which are on theifbasis of information available in the return, prima facie, inadmissible, are to be disallowed. The assessing authority is not permitted under the guise of’ ntaking adjustment to adjudicate upon any debatable issue. Section s

143(1)(a) is not opposed to nature! justice. The provision is vaiid. (emphasis supplied by us) 6) in the instant case, the assesses had flied the return of income for the assessment year 1999-2000 and in that he had claimed deductions of the conveyance allowance and incentive bonus received by him in the previous year relevant to the assessment year. The Assessing Officer, ‘while issuing intimation under Section 143(1)(a) of the Act, has adjudicated upon debatable issues. The juri iction of the Assessing Officer under Section 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 1 43(1 )(a) of the Act, to make an adjustment and issue intimation is limited not only to be obvious but also what is deducible from the return asflled by the assessee, without doubt or debate. in View of the above, the Assessing Officer could not have proceeded to process the return filed by the assessee under Section 143(1)(a) of the Act. Therefore, the question of law referred by the Tribunal 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 Revenue is _a_nsw_ered in’favour of the assessee and against the Revenue. 2 _ , l i V.K. Shrivastava \‘ sm— Judge Chief Justice ~ X Y. 1 ,r/ ‘\.