Law:

Section:

Section 143 of the Income-tax Act, 1961 - Assessment - Prima facie adjustments - Assessment year 1991-92 - Assessee filed a loss return and claimed full depreciation on block of assets without noticing that by virtue of amendment made to section 32, it was entitled to claim deduction of only 75 per cent of normal depreciation - Assessing Officer made prima facie adjustment by bringing down claim to 75 per cent of amount claimed in return and also levied additional tax under section 143(1A) - Assessee contended that instant case was not a case of reducing loss as a result of prima facie adjustment and that reduction in depreciation claimed did not have effect of affecting total income declared - Tribunal confirmed Assessing Officer's action - Held, yes - Whether an opportunity must be given to assessee to agitate question of liability to additional tax under section 143(1A) and, accordingly, Assessing Officer was to be directed to consider question afresh and take a decision in accordance with law - Held, yes FACTS During assessment proceedings, the Assessing Officer noticed that the assessee had claimed normal depreciation, whereas by virtue of an amendment to section 32, the admissible deduction was only 75 per cent of the normal depreciation. The Assessing Officer processed the return under section 143(1)(a) and sent an intimation, wherein he made a prima facie adjustment and brought down the loss declared by the assessee. The Assessing Officer also levied additional tax under section 143(1A). The assessee's application under section 154 for rectification of the intimation was rejected. On appeal, the appellate authority cancelled the levy of additional tax made under section 143(1A). On department's appeal, the Tribunal set aside the order of the first appellate authority and restored the order of the Assessing Officer levying additional income-tax. On appeal : HELD The adjustment was made only in respect of the depreciation claimed. By virtue of the amendment made to section 32, for the assessment year 1991-92, the assessee was entitled to claim deduction of only 75 per cent of the normal depreciation and the assessee without considering the amendment…

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