Law: Income Tax Act, 1961

Section: 143

Income-tax----Assessment---Adjustments under S.143(1)(a)---Scope of S.143(1)(a)--¬Additions to income could not be made under S.143(1)(a) of the Indian Income Tax Act, 1961, S.143. Held, that the addition of various incomes to the total income in purported exercise of the powers under section 143(1)(a) of the Income Tax Act, 1961, was illegal and without jurisdiction. Khatau Junkar Ltd. v. K.S: Pathania (1992)196 ITR 55 (Bom.) and Indian Rayon and Industries Ltd. v. J.R. Kanekar, Asst. CIT (1993) 200 ITR 747 (Bom), fol. JUDGMENT By this application under Article 226 of the Constitution the petitioner challenges Annexure "II", order dated February 19, 1993, issued by the Deputy Commissioner of Income-tax, Assessment, Range-II, Gauhati, initiating proceedings under section 143(1)(a) of the Income Tax Act, 1961 (for short "the Act"), and Annexure "IV", order dated June 10, 1993, issued by him in purported exercise of the power under section 154 of the Act refusing to rectify the mistakes so far as interest on deposit and interest on loan are concerned and adding the same in the total income of the petitioner. The petitioner is a company incorporated under the Companies Act and is an assessee under the Act. It submitted its return of income for the assessment year 1992-93 relevant to the previous year 1991-92 on December 30, 1992, showing a total income of Rs.93,50,050. The total tax including surcharge payable by the petitioner was Rs.48,38,650. A sum of Rs.1,83,416, was payable by the petitioner on account of interest under sections 234-B and 234-C of the Act. Thus, a total amount of Rs.50,22,066 was payable by the petitioner and the tax so determined was actually paid by it. Along with the return the petitioner furnished details of computation of taxable income for the year ending on March 31, 1992, and also the details of the depreciation allowable, additions made to the fixed assets during the year 1992, amounts disallowable under section 143-B (sic) of the Act, etc. The first respondent, however, made prima facie adjustments in the purported exercise of the powers under section 143(1)(a) of the Act and added back certain income mentioned in paragraph 5 of the…

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