Refuse to pay income tax demanded u/s 143(1)
pkpworld..
(Querist) 05 November 2009
This query is : Resolved
One person filed a return for AY 2007-08 on 31/03/2008. He received a intimation u/s 143(1) for payment of demand of Rs.4522/- on 02/11/2009. The Intimation u/s 143(1) was issued on 25/09/2009 by income tax officer. The person was written a compliance with reference this intimation stating following:
U/s 143(1), the time limit of issue of intimation for dedmand is one year from end of the financial year in which the return was filed. In other word No intimation shall be sent after the expity of one year from the end of the FY in which the return is made. In the instance case the ITO can not demand any tax after 31/03/2009.
In this situation what is to do?
Raj Kumar Makkad
(Expert) 05 November 2009
Yes. You are right. No demand of deficiency can be made at such belated stage. When act clearly stipulates the time frame within which such demand can be made then the officials engaged with the compliance of the provisions of the act are not entitled to perform their duty arbitrarily violating the act.
A V Vishal
(Expert) 05 November 2009
PKP:
S 143 has been amended kindly go through the amendment
[39]. Provided further that no intimation under this sub-section shall be sent after the expiry of (39)[one year from the end of the financial year in which the return is made :]
(39)Substituted for “two years from the end of the assessment year in which the income was first assessable†by the Finance Act, 2001, w.e.f. 1-6-2001.
A V Vishal
(Expert) 05 November 2009
The intimation is in order and your friend is liable to pay the tax due.
Vineet
(Expert) 05 November 2009
The intimation received u/s 143(1) is barred by time and hence invalid.
Please file an appeal against the order and get it quashed by CIT(A).AO himself cannot and will not set aside his own order.
After filing appeal, make an application before the AO to stay the demand nerrating complete fact.
A V Vishal
(Expert) 05 November 2009
Vinnet,
Can you please rely on what grounds you affirm that the intimation is invalid.
Vineet
(Expert) 05 November 2009
An intimation u/s 143(1) can be issued within one year from the end of financial year in which the return was filed. Ref second proviso to section 143(1) as it stood for relevant assessment year and period.
As the return in this case was filed on 31-3-2008, an intimation u/s 143(1) could be served on assessee till 31-3-2009 only. Therefore the intimation issued on 25-9-2009 is barred by time and therefore invalid.
pkpworld..
(Querist) 05 November 2009
The reply of Mr.Vineet is quite acceptable.
In regard to reply of Mr.Vishal, I would llike say that the section 143 and 143(1) are not identical. I am talking about section 143(1) which is a summary assessment and not a regular assessment. The case has not been selected for scrutiny.
Raj Kumar Makkad
(Expert) 05 November 2009
I have checked the amendment and i agree with vishal that he is liable to pay tax as one year period has been enhanced to 2 years.
Vineet
(Expert) 06 November 2009
Dear Makkad Sir,
Would you please let me know the amendment details.
Vineet
(Expert) 06 November 2009
In fact it is quite reverse a situation. prior to 1-6-2001, the time allowed was two years which has been reduced to one year by Finance Act, 2001.
A V Vishal
(Expert) 06 November 2009
VINEET CHECK MY REPLY AND YOU WILL FIND THE DATE OF AMENDMENT OF THE ACT, PROBABLY YOU HAVE REFERRED ONLY TO THE BARE ACT PLEASE GO THOROUGHLY BEFORE SUGGESTING ANY ADVISE. AND MR PKP YOU WILL NATURALLY ACCEPT SUCH ADVISE, FURTHER I DO UNDERSTAND BETTER THE DIFFERENCE BETWEEN A SUMMARY ASSESSMENT U/S. 143(1) AND SCRUTINY U/S. 143(3).
pkpworld..
(Querist) 06 November 2009
After going through above reploy I have read the section 143(1) again and again and found that : An intimation for tax or interest due under section 143(1) should not be sent after the expirty of one year from the end of the financial year in which return is made. For instance for the AY 2008-09, return is submitted on July 31, 2008. Intimation may be sent up to March 31, 2010 (even if it is received by the assessee after March 31, 2010). The current positioin of section 143(1) during this year is like this irrespective the amendments.
Hence I agreed with views of Mr.Vineet.
Vineet
(Expert) 07 November 2009
Mr Vishal
I do not know you are referring to which amendment. The position of law is very clear that wef 1-6-2001, no intimation u/s 143(1) shall be sent after one year from the end of financial year in which return was filed.
The amendment quoted by you also suggests the same thing.
And yes, I know what I am writing and certainly my experience in Direct Tax field is not limited to Bare Acts.
Vineet
(Expert) 08 November 2009
I hope the learned experts first check basics and come up with cogent reasoning and backup material before using such strong language.
