Central Board of Direct Taxes in its Circular No. 549 dated October, 31, 1989 [see (1990) 182 ITR St. 1] has advised the Assessing Officers to issue intimation under Section 143(1) before issuance of notice under Section 143(2) of the Act
However,the question "whether the return should necessarily be processed u/s 143(1) even when notice u/s 143(2) has already been issued? " hounts both the mind of tax practitioner and even A.O.
The answer to this question has been legally settled by Supreme Court in Commissioner of Income Tax v. Gujarat Electricity Board [2003] 260 ITR 84.
Would this judgement apply for the new preovisions of 143(1) and 143(2)?
Open discussion...
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return should necessarily be processed under seccion 143(1) especially since the duty is cast of the AO for disallowing certain claims not in consonance with law, prima facie. Of course the addl tax is not there now, but the demand starts from the day of adjustment. It is doubtful whether the assessee could come up with an argument that something which has not been done under processing cannot be done under scrutiny. But some funny claim to this extent may arise and knowing our appellate set up this idea also may get the nod and we may foolishly lose revenue. The remnants of Muhammed bin Thuglaq could find its shadow somewhere. Do not take chances.. and the ao may get a chargesheet for not doing it also...if he is not in the good books of his boss.
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