High Court Of Calcutta
Indian Aluminium Co. Ltd. & Anr. vs. Union Of India & Ors.
Sections 143(1), 143(2)
Barin Ghosh, J.
Matter No. 2519 of 1991
26th February, 2004
Counsel Appeared
Dr. D. Pal with P.K. Pal, Ms. M. Seal & Malay Dhar, for the Petitioners : S.K. Kapoor, R.N. Mitra & Md. Nizamudin, for the Respondents
JUDGMENT
Barin Ghosh, J. :
Sec. 143(1) of the IT Act, 1961, as was applicable during the relevant assessment year permitted the AO to send an intimation to the assessee specifying the amount of tax payable by him where a return has been made under s. 139 or in response to a notice under sub-s. (1) of s. 142. The statute provided that such intimation shall be deemed to be a notice of demand issued under s. 156 of the Act and all the provisions of the Act shall apply accordingly. Sec. 156 of the Act provided that when a tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under the Act, the AO shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable. At the same time, s. 220(1) of the Act provided that any amount, otherwise than by way of advance tax specified as payable in a notice of demand under s. 156 shall be paid within 30 days of the service of the notice at the place and to the persons mentioned in the notice. Sub-s. (2) of s. 220 of the Act provided that if the amount specified in any notice of demand under s. 156 is not paid within the period limited under sub-s. (1), the assessee shall be liable to pay simple interest at one and half per cent for every month or part of a month comprised in the period commencing from the date immediately following the end of the period mentioned in sub-s. (1) and ending with the day on which the amount is paid. Thus, when an intimation is sent in terms of sub-s. (1) of s. 143 of the Act, the assessee is liable to pay the amount mentioned in the intimation within 30 days. In default, he would be liable to pay interest. That being a statutory provision, unless the provision itself is challenged, ,which has not been done in the instant case, the assessee concerned is liable to pay interest. In the instant case, the subject-matter of challenge is such an intimation.
2. Sub-s. (2) of s. 143 authorised the AO in a case referred to in sub-s. (1), if the AO considered it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, he shall serve on the assessee a notice requiring him on a date to be specified therein either to attend his office or to produce or cause to be produced there, any evidence on which the assessee may rely in respect of the return. Therefore, whereas by virtue of sub-s. (1) of s. 143 of the Act the AO was authorised to issue an intimation to the assessee when the AO found on the basis of the return submitted that any tax or interest is due but has not been paid; sub-s. (2) of s. 143 of the Act authorised the AO to issue a notice to the assessee when the AO considered it necessary or expedient to ensure that the assessee has not understated the income or has not computed the excessive loss or has not underpaid the tax in any manner. When steps are taken under sub-s. (1) of s. 143 of the Act upon issuance of the intimation, the matter stands concluded insofar as the AO is concerned. When, however, steps are taken under sub-s. (2) of s. 143, the AO starts his work to ensure that the assessee has not paid less tax. Sub-s. (3) of s. 143 authorised the AO to come to his findings by making an assessment, in order to show that he has discharged his obligation in terms of sub-s. (2) of s. 143 of the Act. Therefore, the power exercisable under sub-s. (1) of s. 143 stands on a different footing from the power exercisable under sub-s. (2) of s. 143 of the Act. It is possible that, after the power has been exercised under sub-s. (1) of s. 143, it may occur to the AO that, while issuing the intimation or while issuing the refund, certain things escaped his attention and, accordingly, he has not been able to ensure that the assessee has not underpaid tax and, accordingly, he may thereupon take steps under sub-s. (2) of s. 143 of the Act. It is, however, not possible to comprehend that the self-same AO could exercise power under sub-s. (1) of s. 143 of the Act simultaneously with exercise of power under sub-s. (2) of s. 143 of the Act. In the instant case, there is no dispute that the intimation under sub-s. (1) of s. 143 of the Act was issued on the same date, when the notice under sub-s. (2) of s. 143 of the Act was issued. In the affidavit-inopposition filed by the IT Department, it has not been stated that in point of fact, the intimation under sub-s. (1) of s. 143 was issued at an earlier point of time on the same date and subsequent thereto it came to the knowledge of the AO that for some reason or the other he has not been able to ensure that the assessee has not underpaid the tax. The conclusion would be, therefore, that the intimation under sub-s. (1) and notice under sub-s. (2) were issued simultaneously. When steps are taken under sub-s. (2) of s. 143, it is commonly known as regular steps to make regular assessment. The same stand culminated upon the making of an assessment order of the total income. Once that order is made, s. 156 of the Act obliges the AO to issue a demand. Sec. 220 then requires the assessee to pay the same within 30 days from the date of receipt of the demand and in default, to pay interest at the rate of one and half per cent per month. The assessee is required to pay the amount mentioned in the intimation and in default of payment within 30 days from the date of receipt of the intimation, is obliged to pay interest but at the same time the assessment has not reached finality, for steps have been initiated under sub-s. (2) to ascertain actual tax liability. This is, however, not comprehensible without a just reason in support thereof. The affidavit-in-opposition does not give any such just reason. The AO, who has been authorised to do either of these acts, has done both of them on the same date. As aforesaid, one of his actions concludes the matter and the other commences the assessment of the liability. In such view of the matter, I think the intimation issued under sub-s. (1) of s. 143 of the Act, which has been challenged in the instant writ petition, cannot be sustained.
3. It has been contended on behalf of the Revenue that, after the intimation was issued, the assessee took steps to have mistakes therein rectified and thereupon filed the present writ petition challenging the self-same intimation and that too, suppressing the steps taken for rectification thereof. The said conduct on the part of the assessee is not proper. The assessee should have been candid to the Court. The question, however, that falls for consideration is whether by taking steps to rectify the mistake in the intimation, the assessee has done something which has stopped his right to challenge the intimation ?
Estoppel by conduct must be such a conduct which should demonstrate that the person against whom the plea of estoppel has been taken has done something which would show that he had taken steps to uphold that thing. In other words, estoppel by conduct will apply only in those cases where the person seeks to uphold the action. In the instant case, by approaching the appropriate authority provided in the law, the assessee contended that the intimation itself contains mistakes, in other words, the intimation is not correct. The assessee did not approach the appropriate authority to uphold that the intimation as it stands, is correct and, accordingly, did not make any attempt to uphold the intimation and as such, I am constrained to observe that the principle of estoppel by representation is not applicable to the assessee. In these circumstances, the writ petition succeeds. The impugned intimation is quashed. Let it be recorded that during the pendency of the writ petition, steps as were contemplated under sub-s. (3) of s. 143 of the Act were taken, and I am told, that the same has reached a conclusion. However, by reason of the interim order passed on the present writ petition by this Court, the same could not be given effect to. The petitioner cannot take advantage of both the situations. He should not have approached this Court for an injunction restraining the conclusion of the proceedings under sub-s. (3) of s. 143 of the Act. Be that as it may, that injunction order is vacated, the Revenue is directed to give effect to the conclusion reached in terms of sub-s. (3) of s. 143 of the Act forthwith. Inasmuch as the proceedings pursuant to sub-ss. (2) and (3) of s. 143 of the Act were stayed by this Court, for all practical purposes and, particularly, for the purpose of limitation, the time from the date of presentation of the writ petition until today shall be exempted.
It is made clear that the final assessment made under sub-s. (3) of s. 143 of the Act is not the subject-matter of this writ petition and accordingly, I had no occasion to deal with the same in any manner whatsoever. I have not even looked into the same. In such a view of the matter, it shall be open to the parties to take such appropriate steps as they are entitled to in relation to that order. The writ petition is disposed of. There would be no order as to costs.
[Citation : 271 ITR 73]
