Hilltop Holdings India Ltd. v. Commissioner Of Income-Tax And Others

The Judgment of the Court was delivered by

D.K Seth, J.:—

The background:

2. This appeal has been preferred against an order dated July 28, 2003, passed in Writ Petition No. 446 of 2002 by the learned single judge. In the writ petition, the initiation of the proceeding under section 263 of the Income-tax Act, 1961 in respect of an order contemplated under section 143(1) was challenged on the ground that in respect of such an order, section 263 has no manner of application. The learned single judge rejected the plea on the ground that if an improper assessment order has been made under section 143(2), Revenue is lost and the State cannot prefer an appeal against such a decision. If despite mistake having been committed in exercising power under section 143(2), the Assessing Officer does not exercise his power under section 154, no action in appeal can be taken against it. In order to save the Revenue from such an eventuality, the Legislature has embodied section 263 in the Act. Such a case is definitely prejudicial to the Revenue sufficient for invoking section 263 even in respect of an order passed under section 143(1).

Fiscal statute; Principle of interpretation:

3. Before we proceed to deal with the matter and examine the law, we may remind ourselves that the provisions of a fiscal statute have to be construed strictly. The court can neither add or subtract nor presume, nor can introduce its own view. The provisions of fiscal statutes are to be interpreted strictly according to the letters. The court is powerless to mould the law to suit a particular situation, which the court thinks just even though such a meaning cannot be obtained out of the language employed and the scheme and the context in which those are used. The court is not supposed to twist the law to make it just and serve justice. If the Legislature enacts a law, it has to be interpreted as it stands, and if two meanings are possible then the one beneficial to the assessee is to be adopted. The expressions used in a statute take colour from the context in which they are employed. The court cannot infuse any meaning to stretch its application in a case, which it thinks just to do so. It is only when the language is clear and the expressions are capable of being extended, the court then can apply the same in a given case and not otherwise.

The position:

4. In the present case for the assessment year 1999–2000, an acknowledgment was issued under section 143(1)(a)(i) by the Income-tax Department in respect of the return submitted by the assessee. Subsequently, the proceeding was sought to be revised by the Commissioner of Income-tax under section 263 on the ground that the order passed by the Assessing Officer was erroneous and prejudicial to the interests of the Revenue.

Appellant's contention:

5. This was challenged in the writ petition on the ground urged by Dr. Pal, namely:

An intimation issued under section 143(1)(a) could at best be treated as a notice of demand. It is not an assessment order. Neither does it partake of the character of an order passed by the Assessing Officer in any proceeding. It is only a ministerial act. But, in this case, it was simply an acknowledgement slip, which was issued by the Department and not by the Assessing Officer. In terms of the Explanation to section 143, an intimation sent under sub-section (1) is deemed to be an order by the fiction created thereunder for the purpose of sections 246 and 264 only.

6. Such intimation or acknowledgement can be amended in exercise of section 154(1)(b) by the authorities under section 116 with a view to rectifying any mistake apparent from the record. Therefore, even in section 154, the intimation or acknowledgement has not been treated as an order.

7. Sending an intimation or acknowledging receipt of the return is a ministerial act and not an order passed by the Assessing Officer. In support, Dr. Pal relied on the decisions in Pradeep Kumar Har Saran Lal v. Assessing Officer, [1998] 229 ITR 46 (All) at pages 52-54; Commissioner Of Income-Tax v. Punjab National Bank, [2001] 249 ITR 763 (Delhi) at pages 771-772; CIT v. K.V Mankaram and Co., [2000] 245 ITR 353 (Ker) and Kalyanpur Cement Ltd. v. Joint CIT, [2005] 276 ITR 49 (Cal) at page 54.

8. The fiction created by the Explanation to section 143 is limited only to the extent for which the fiction was created. It cannot be extended beyond the purpose for which such fiction is created and the provisions are to be interpreted strictly as was held in Karimtharuvi Tea Estate Ltd. v. State Of Kerala, [1966] 60 ITR 262 (SC) and CIT v. C.P Sarathy Mudaliar, [1972] 83 ITR 170 (SC).

9. By reason of the Explanation, an intimation or an acknowledgment is a deemed order by fiction created thereunder for the purpose of section 246 providing for an appeal against an intimation under section 143(1) where the assessee objects to the making of adjustments brought about by the Finance Act, 1994 with effect from June 1, 1994. By reason of such fiction, it is a deemed order for the purpose of section 264 under which the Commissioner either on his own motion or an application by the assessee for revision may call for the records and make or cause an enquiry subject to the provisions of the Act not being an order prejudicial to the assessee, as he may think fit.

Respondent's contention:

10. On the other hand, Mr. Shome contended that the Act was amended by the Finance Act, 1999, with effect from June 1, 1999, by omitting sub-section (5) and the Explanation to section 143. Therefore, without the Explanation the question is to be considered. He relied on several decisions to contend that the intimation or acknowledgement is definitely not an assessment order. It may not be a formal order, as is understood in ordinary sense or in common parlance. But still, it is an order made in the proceedings without attempting to assess the income. Inasmuch as the intimation that a certain amount is found due and payable by the assessee or the assessee is entitled to refund of a certain amount paid as tax is definitely an order under which the tax demanded is quantified or the amount of tax to be refunded is determined. That the matter need not be proceeded with and that the return is to be accepted under section 143(1)(a) is nothing short of a decision to take a particular kind of action in a particular case. The issue of intimation entails that there would be no assessment and the return filed is accepted and that no amount of tax is recoverable or refundable or vice versa. This is equally a decision. Therefore, the intimation and the acknowledgement are definitely orders.

11. An order can be subjected to revision under section 263 since the scope of section 263 is not confined to assessment orders only. Section 263 relates to any erroneous order prejudicial to the Revenue. By reason of the decisions in Commissioner Of Income-Tax (Central), Calcutta v. Christian Mica Industries Ltd., [1979] 120 ITR 627 (Cal); CIT v. Rajkumar Dipchand Phade, [2001] 249 ITR 520 (Bom); Commissioner Of Income-Tax v. Smt. R.G Umaranee, [2003] 262 ITR 507 (Mad); Commissioner Of Income-Tax v. Sri Mahasastha Pictures, [2003] 263 ITR 304 (Mad) and CIT v. M.M Khambhatwala, [1992] 198 ITR 144 (Guj), an intimation or an acknowledgement slip is also an order passed in the proceedings by the Assessing Officer finally determining the rights of the assessee and as such is an order passed by the Assessing Officer.

Whether the Explanation to section 143 is attracted:

12. In the aforesaid context, we may examine the situation having regard to the provisions of the Act as it stood prior to the 1999 Amendment. The amendment was brought about with effect from June 1, 1999. The assessment related to the assessment year 1999–2000 pertaining to the financial year 1998–99. It is a well-settled proposition of law that the law as it stands on 1st of April of the financial year that would govern the assessment of a return for the financial year commencing 1st of April of that year. Admittedly, the amendment was introduced in the financial year 1999–2000 and as such the unamended provision would apply in the present case. In order to support this proposition, we may look at the decision in Karimtharuvi Tea Estate Ltd. v. State Of Kerala, [1966] 60 ITR 262 (SC) where the apex court had held that the law as stands on the 1st of April of the financial year would govern the assessment of the returns submitted in respect of that financial year and any amendment made after 1st of April of that financial year would not apply to the assessment of the return of the year commencing 1st of April of that year.

13. Therefore, in the present case, the Explanation to section 143 would very much be applicable. The effect of the amendment is not required to be gone into for our present purpose. The question needs be answered in the light of the said Explanation.

Section 143(1)(a): Intimation: Whether an order to attract section 263:

14. The amendments made in section 143(1) indicate the changes introduced in the scheme. Under section 143(1)(a), as it originally stood, the Assessing Officer was required to make a summary assessment. After the amendment under the Direct Tax Laws (Amendment) Act, 1987 effective from April 1, 1989, the scheme of summary assessment was omitted along with the assessee's right to object to the summary assessment, and only an intimation was to be sent without prejudice to section 143(2) which authorizes the Assessing Officer to scrutinize the return and consider all the claims and pass an order of assessment under sub-section (3) dealing with the issues involved in the assessment. The scheme shows that the Assessing Officer has to accept the return and the information furnished therewith within the scope of the proviso to section 143(1)(a) viz., in the nature of obvious corrections and not beyond. In case he wanted to differ, he could resort to section 143(2). An Explanation was inserted in section 143 by the Finance (No. 2) Act, 1991, to provide that an intimation sent under sub-section (1) or sub-section (1B) shall be deemed to be an order for the purpose of section 264. The said Explanation was further amended by the Finance Act, 1994, to include section 246 along with section 264. The effect of such amendment was that the intimation was deemed to be an order for the purpose of sections 246 and 264. The Explanation did not provide that the intimation shall be deemed to be an order within the meaning of the Act or for all purposes of the Act. It specifically mentioned only the said two provisions.

15. From the scheme of the section, it is clear that the Assessing Officer was required only to issue an acknowledgement slip known as intimation to the assessee. The intimation was in effect an information given to the assessee about the acknowledgement of acceptance of the return after making permissible adjustment acting upon the return filed. The adjustments permissible are simply of ministerial in nature. This neither envisages initiation of any proceedings nor passing of any order.

16. The scope of activities conferred on the Assessing Officer dealing with a case under section 143(1)(a) is confined only within the rectification of arithmetical error and making of adjustment on the basis of the return as filed or allowing of deduction or allowance of relief etc. without any power to make an assessment on the basis of such return. There is much difference between an assessment and an intimation contemplated under section 143(1)(a). The use of the expression “intimation” by the Legislature is to distinguish the same from an assessment. Under section 143(1)(a), no hearing is contemplated and an intimation sent without hearing cannot be an assessment since assessment would mean conferring power on the Assessing Officer to add, alter and that too only after giving opportunity through a process of regular assessment under section 143(3) after resorting to section 143(2).

17. We may find support for the above proposition in the decision in Pradeep Kumar Har Saran Lal, [1998] 229 ITR 46 (All). In K.V Mankaram and Co., [2000] 245 ITR 353 (Ker), it was held that an intimation given under section 143(1)(a) does not result in an order of assessment nor can it be treated to be an order of assessment. The very scheme of section 143(1)(a) indicates that no order is passed but only an intimation is sent. In Punjab National Bank, [2001] 249 ITR 763 (Delhi), it was held that the Legislature had used the word “intimation” as substitute for assessment. From these, two different concepts emerge: one, while making an assessment, the Assessing Officer is free to make any addition after giving opportunity to the assessee, and the other, under section 143(1)(a), no addition impermissible by the information given in the return could be made by the Assessing Officer. This is so because section 143(1)(a) does not contemplate any opportunity granted to the assessee and the Assessing Officer has to proceed only on the basis of the return filed by the assessee as was cited by Dr. Pal, it was held that an intimation or an acknowledgement is not an order.

18. Mr. Shome sought to distinguish these decisions and relied upon some decisions to support this contention. We may now examine those decisions for our present purposes. In the decision cited by Mr. Shome in Christian Mica Industries Ltd., [1979] 120 ITR 627 (Cal), it was held that the Commissioner may call for and examine the records of any proceedings under the Act if he considers that any order passed therein by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue and after giving the assessee an opportunity of being heard, make or cause to be made such enquiry, as he might deem necessary and pass such order thereon as the circumstances of the case may justify including an order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment within the scope of section 33B(1) of the Indian Income-tax Act, 1922. Mr. Shome relied on this decision in order to contend that there is no bar on the Commissioner in exercising his power under section 263 of the 1961 Act similar to section 33B(1) of the 1922 Act. But this submission seems to be fallacious for the simple reason that this decision did not deal with any provision similar to section 143(1)(a) read with the Explanation to section 143. In the said case, the order was passed dropping an assessment proceeding, after obtaining approval of the Inspecting Assistant Commissioner, recognizing the interim dividend declared after 12 months from the close of the relevant accounting year. Therefore, though not an assessment order it was an order passed in a proceeding for or in the process of assessment where the Income-tax Officer was free to pass any order without being confined to the limitations provided in section 143(1)(a). Inasmuch as, section 143(1)(a) after 1989 confines the scope within the powers enumerated under sub-clauses (i), (ii) and (iii) of the first proviso to section 143(1)(a) under which only an intimation is to be send under the second proviso. The very scheme of section 143(1)(a) confining the power enumerated under the first proviso makes a distinction between an order under section 143(1)(a) and those under section 143(3) under which an assessment is permissible after issue of notice under subsection (2). Thus, the provision of section 143(1)(a) is contrary to the power conferred under section 143(3), the provisions whereof are completely incompatible and diametrically opposite to section 143(1)(a). Therefore, we do not think that this decision can help us in the present context.

19. Now we may examine the other decisions cited by Mr. Shome as to how far the ratio decided therein can persuade us to hold otherwise than the simple and clear position emanating from the plain reading of the scheme of section 143(1)(a) read with the Explanation to section 143. The decision in Rajkumar Dipchand Phade, [2001] 249 ITR 520 (Bom) does not spell out any reason as to how section 263 could be applied in a case to treat an intimation as an order within the meaning of section 263. This decision dealt with the assessment year 1986–87 subject to the law as it stood prior to the 1987 amendment effective from 1989 with which we are now concerned. In the said decision, the court had no occasion to deal with the effect of the fiction created by the Explanation to section 143. In Smt R.G Umaranee, [2003] 262 ITR 507 (Mad) also, the Madras High Court was dealing with the assessment year 1988–89 and as such had no occasion to deal with the impact or effect of the fiction created by reason of the Explanation to section 143 and as such this decision does not help us in the present context. The decision in Sri Mahasastha Pictures, [2003] 263 ITR 304 (Mad) proceeds on the reasoning that the provisions of section 263 are widely worded to encompass any order passed by the Assessing Officer including the summary assessment order viz., under section 143(1)(a) as it stood prior to 1987 amendment when the said section required summary assessment. This decision also had no occasion to deal with the fiction created by the Explanation to section 143 after the 1987 amendment. Inasmuch as, acceptance of the return within the scope of the first proviso to section 143(1)(a) does not amount even to a summary assessment order. Therefore, this decision also does not help us. The decision in M.M Khambhatwala, [1992] 198 ITR 144 (Guj) is of no help since the said decision was not dealing with an intimation under section 143(1)(a) as it stood after 1989 while laying down the scope of section 263. Read in the context of the present case, those decisions are of no help. The decision in Kalyanpur Cement Ltd., [2005] 276 ITR 49 (Cal) was rendered altogether in a different context holding that an intimation is not an assessment contemplated under section 139(5) for the purpose of limitation for filing revised return. Therefore, much reliance, as sought to be placed by Dr. Pal on the said decision, is of no avail.

20. From the above discussions, it appears that an intimation is not an assessment order. Mr. Shome in his usual fairness did never contend it to be an assessment order. At the same time, the issue of intimation under section 143(1)(a) does not involve any drawing up of any proceedings. Neither is any proceeding initiated. The issue of the intimation is not an order passed in any proceeding for or in the process of assessment, which the Assessing Officer could do under section 143(3) after notice under section 143(2). Nor could there be any error beyond the scope of the first proviso to section 143(1)(a) non-rectifiable under section 154(1). The issue of intimation or acknowledgement, therefore, is not an order within the meaning of section 263 by reason of the Explanation to section 143 for the reasons hereafter noted.

Section 263: When attracted:

21. Section 263 can be exercised in relation to a proceeding in which the Assessing Officer has passed an erroneous order prejudicial to the Revenue. Therefore, in order to attract section 263, the following four conditions need be satisfied viz., (1) there should be a proceeding; (2) there should be an order passed by the Assessing Officer in such proceeding; (3) such order should be erroneous; (4) and such order should be prejudicial to the Revenue. Absence of one of the conditions would be sufficient to detract section 263. As discussed above, section 143(1)(a) does not envisage initiation of any proceeding and the intimation is not an order passed in any proceeding to attract section 263. Even if we assume that an intimation is an order, then an order to be erroneous, it must be something, which does not conform to the scope of the first proviso to section 143(1)(a); and those in the first proviso are rectifiable under section 154(1)(b). In the absence of any liberty given to the Assessing Officer except those under the first proviso to section 143(1)(a), there is no scope of committing an error other than those rectifiable under section 154(1). Section 143(1)(a) does not postulate any scope of error envisaged under section 263 in the absence of any power beyond the scope of the first proviso.

The extent and impact of the fiction created under section 143, from Explanation:

22. Since a fiction has been created by the statute by inserting the Explanation to section 143, we cannot ignore the fiction so created. At the same time, we cannot extend the scope of the fiction beyond the context and purpose for which such fiction is created. It has to be construed strictly and is to be confined within the purpose for which it is created, as was held in C.P Sarathy Mudaliar, [1972] 83 ITR 170 (SC).

23. In the present case, we find that the fiction was created to treat an intimation or acknowledgement as an order only for the purpose of sections 246 and 264. Therefore, an intimation or an acknowledgement is to be treated as an order only for the purpose of those two sections and not for any other. Even in section 154, it has not been treated to be an order rectifiable. On the other hand, it is a rectification of a mistake through amendment of the intimation sent under section 143(1)(a). Inasmuch as section 154(1)(a) empowers rectification of an order passed by the Income-tax Authority under the provisions of the Act. The Legislature did not leave the same at that. Apart from orders, in clause (b) it conferred power to amend an intimation under section 143(1). Therefore, even in section 154, the intimation or acknowledgement has not been treated as an order rectifiable; it is treated in its original character as an intimation alone.

Section 156: Deemed notice of demand: The impact:

24. Under section 156 of the Act, a notice of demand can only be issued where any sum becomes payable by reason of any order passed under the Act. The intimation was not considered as an order as would be evident from section 143(1)(a) itself which provided that the sum specified as payable in such intimation shall be deemed to be a notice of demand under section 156 of the Act and all the provisions of the Act shall apply accordingly. If the intimation was considered as an order then in respect of any amount specified therein as payable a notice of demand in the prescribed form under section 156 of the Act had to be issued. Since an intimation was never intended by the Legislature to be treated as an order, a fiction was created in section 143(1)(a)(i) by treating the intimation as a deemed notice of demand under section 156 and provided that all the provisions of the Act shall apply accordingly. This fiction is also to be interpreted strictly. It has to be construed having regard to the context; and it must draw its colour from the purpose for which the fiction is created.

25. The phrase “all the provisions of the Act shall apply accordingly” qualifies section 156 referred to in section 143(1)(a). Inasmuch as, the phrase “all the provisions of the Act shall apply accordingly” means that all the provisions of the Act as are applicable in respect of a notice of demand under section 156 when issued would apply. It does not widen the scope of application of the Act in all respects contrary to the confines created by the amendment substituting section 143(1) under the Finance Act, 19871. It restricts the application only in relation to section 156 treating the intimation as a deemed notice of demand confining the scope within the fiction created. It has to be construed in consonance with the scheme of section 143(1)(a) read with the Explanation to section 143. Therefore, the application of the provisions “accordingly” being confined within the fiction would not lead us to hold that the Legislature had intended to treat an intimation as an order.

26. It may be noted that all the High Courts in one voice had held that an intimation under section 143(1)(a) is not an assessment order. However, following Rajkumar Dipchand Phade, [2001] 249 ITR 520 (Bom) the Bombay High Court in CIT v. Anderson Marine and Sons (P.) Ltd., [2004] 266 ITR 694 in its Panaji Bench had held that an intimation is an order of assessment on the strength of its being a notice of demand under section 156 on the reasoning that the intimation sent by the Assessing Officer, in law, is to be understood as having the force of an order of self-assessment pursuant to which the notice of demand is issued. But the said decision does not seem to lay down the law correctly, inasmuch as an intimation can never be treated to be an assessment order. None the less it could have been treated as an order on account of the fiction created in section 143(1)(a)(i) to treat an intimation as a notice of demand issued under section 156 to which all the provisions of this Act would apply accordingly. But this application of all the sections appears to be qualified by the expression “accordingly” which pre-supposes that the application of the provisions of the Act is confined to the phrase “shall apply accordingly” as applicable to a notice of demand issued under section 156 and not beyond. At the same time, this decision has not taken into consideration the impact of the Explanation to section 143 where the intimation is treated as an order within the meaning of sections 246 and 264 and nothing more. The said decision deals with section 143(1) as quoted therein omitting the Explanation to section 143 and its impact altogether. Therefore, we do not think that the said decision could persuade us to agree with the reasoning given therein for the purpose of holding an intimation to be an order within the meaning of section 263.

27. Mr. Shome, however, contended that the intimation is not an order of assessment; still, however, it is an order for the purpose of section 263. Inasmuch as, while issuing intimation, the Assessing Officer does not merely discharge a ministerial act since it involves a process to determine the liability to pay tax or refund of the excess tax paid or to accept the self-assessment as submitted, which involves application of mind and taking a decision. There cannot be any liability to pay or refund unless there is a direction or order to that effect. Therefore, though not an assessment order, an intimation is nevertheless an order. Since it was not an order of assessment, therefore the assessee is entitled to file a revised return under section 139(5) even after issue of intimation as was held in Kalyanpur Cement Ltd., [2005] 276 ITR 49 (Cal). But this proposition cannot be reconciled with the Explanation to section 143, which allows the assessee to prefer an appeal under section 246 and seek a revision under section 264 confining the characteristics of the intimation as a deemed order only for the limited purpose for which the fiction was created through the enactment of the Explanation. Even if an intimation could be treated to be an order, even then the question remains as to whether it would be an order revisable under section 263.

Section 246 and the fiction:

28. At the same time, section 246 for which the fiction is created, itself prescribes specifically under section 246(1)(a) that an appeal would lie against an intimation under section 143(1). Thus, we find that even in section 246(1)(a) the appeal has been provided against an intimation under section 143(1). The language employed therein treated an intimation under section 143(1) as an intimation not as an order. But in order to obviate the conflict between sub-section (1) and clause (a) of section 246, the fiction was created by the Explanation to section 143 to treat an intimation as a deemed order for the purpose of section 246.

Section 263: Section 264: The distinction: The scope: The fiction:

29. Section 264(1) applies in respect of orders other than orders to which section 263 applies. Therefore, an order, which is subject to section 264, must be an order to which section 263 does not apply. The statute has created a distinction between orders contemplated in sections 263 and 264, the application whereof mutually excludes the other. Therefore, an order, which is subject to section 264, can never be subjected to section 263 on account of its being an order to which section 263 does not apply. Section 263 applies in respect of an order passed in a proceeding by the Assessing Officer on account of its being erroneous and prejudicial to the interests of the Revenue. When the Legislature through clear expression created a fiction to treat an intimation or acknowledgement under section 143(1) as a deemed order for the purpose of section 264, the Legislature made its intention clear that such intimation and acknowledgement shall be outside the purview of section 263. This is clear from the scheme introduced by the Finance Act, 1987, which was a deliberate and clear departure from the summary assessment contemplated under section 143(1) brought about with a particular purpose and object as reflected in the Explanation to section 143.

30. In order to attract section 263, the order must be an order passed by the Assessing Officer in the proceeding. A proceeding is to be understood in its common ordinary dictionary meaning as is understood in common parlance. The word “proceeding” has not been defined in the Act. According to the Shorter Oxford Dictionary, the word “proceeding” means “the formal manner in which legal proceedings are conducted”. A proceeding can be said to be initiated and conducted only when the Assessing Officer proceeds to assess the income, but when the return is accepted, there is no assessment nor any process for assessment undertaken by the Assessing Officer or in other words the Assessing Officer does not proceed to assess the income. On the other hand, the adjustment made is only a ministerial act. It does not partake of the character of an assessment nor of a proceeding nor of any process ancillary thereto. On the other hand, it is only a calculation for the purpose of adjustment of the tax paid on the basis of the computation made by the assessee in its return. Therefore, the same cannot be treated to be a proceeding; and an intimation or an acknowledgement issued being a ministerial act cannot be treated to be an order passed in a proceeding by the Assessing Officer. Section 263 applies only to a proceeding in which the Assessing Officer had passed an order erroneously and prejudicial to the interests of the Revenue. The Explanation created a fiction to treat an intimation or an acknowledgement as an order for the purpose of section 264. This very fiction has excluded the application of section 263 by treating the intimation or acknowledgement as a deemed order fictionally only for the purpose of section 264 other than an order to which section 263 applies. Once the Explanation creates a fiction for treating an intimation as an order for the purpose of section 264, it excludes the application of section 263. Therefore, section 263 can never be attracted in respect of an intimation or an acknowledgement under section 143(1)(a).

The principle:

31. As held by the learned single judge, an intimation being amendable under section 154, it cannot be said that for an inaction of the income-tax authority the provisions of section 263 are to be stretched and applied so far as it comes in conflict with section 264 rendering the purpose of introduction of the Explanation altogether nugatory. The court cannot supplant the legislation. If the Legislature intends to treat a particular provision in a particular manner, the court is not supposed to lend its wisdom to the legislation.

Conclusion:

32. As discussed above, by no stretch of imagination an intimation/acknowledgement under section 143(1)(a) can be treated as an order except as contemplated in the Explanation to section 143 thereof in view of the fiction created thereunder. The Legislature had made a distinction between an order and an intimation. The intention of the Legislature was clear in creating the fiction through the Explanation to section 143 treating an intimation/acknowledgement to be an order within the confined meaning of sections 246 and 264 alone. The provisions of section 154(1) empowering the Assessing Officer to rectify an intimation would not lend support to hold an intimation or an acknowledgment as an order. This is so particularly because of the scope of section 143(1)(a) having been confined only to the extent enumerated in clauses (i), (ii), and (iii) of the first proviso to section 143(1)(a). The fiction is self-explanatory to limit itself to construe an intimation as a deemed order by reason of the fiction only to the extent of sections 246 and 264 and an order amenable to section 264 is outside the purview of section 263. Therefore, so long the Explanation to section 143 remains operative, an intimation/acknowledgement cannot be treated to be an order for the purpose of exercising power under section 263. Therefore, the initiation of the proceeding under section 263 is wholly without jurisdiction and a nullity and void and cannot be sustained.

Order:

33. In the result, the appeal succeeds and is allowed. The order dated July 28, 2003 passed by the learned single judge in WP No. 446 of 2002 is hereby set aside. The writ petition is hereby allowed. The notice dated February 15, 2002, issued by respondent No. 1 under section 263 of the Income-tax Act, 1961, relating to the assessment year 1999–2000 and all proceedings thereunder or in pursuance thereof are hereby quashed. Let a writ of certiorari do issue accordingly. There will, however, be no order as to costs.

34. Xerox certified copy of this judgment, if applied for, be given to the parties on usual undertaking.

Soumitra Pal, J.:— I agree.