( 1 ) ASSESSEE, a Company, has filed this petition under Article 226 of the Constitution of India for a writ of certiorari or any other appropriate writ, order or direction for quashing the intimation/order Annexure d dated 18. 12. 1995 under Section 143 (l) (a) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). It has also prayed for quashing the demand of Rs. 1,30,83,741/ -.

( 2 ) THE short facts leading to the present proceedings are as under :

( 3 ) ON 12-9-1994 the assessee submitted a return of loss of Rs. 1,74,78,530/- for the assessment year 1993-94 as per the computation of income and depreciation chart annexed to the petition at Annexure A. The assessee claimed depreciation of Rs. 1,74,78,526/ -. Manufacturing activities started on March 24, 1993, i. e. , during the accounting year ending on 31. 3. 1993 (the assessment year 1993-94 ). It was specifically pointed out that "the amount of interest received during the public issue of Rs. 1,07,85,590/- is not to be considered as income and has been given set off against the interest outgoings included under preoperative expenditure" in view of several decisions including that of the Apex Court.

( 4 ) AS stated by the learned Counsel, on filing of the return, the Assessing Officer under the new scheme for the assessment, under Section 143 of the Act, had two optionsl : i. . e. , (i) either to accept the return under Section 143 (1) with necessary adjustments, if there is any, or (ii) to proceed to make assessment under Section 143 (3) or under Section 144 by issuing notice under Section 143 (2) of the Act. In the instant case, instead of accepting the return under Section 143 (1) of the Act, undisputedly, the Assessing Officer issued notice under Section 143 (2) of the Act on 1-12-1994, vide Annexure C. It is contended in the petition that in continuation of the notice the Assessing Officer addressed a letter on 15-12-1995 calling upon the assessee to attend on 27-11-1995, vide letter Annexure C-l. The assessees representative appeared before the Assessing Officer on 27-11-1995 but the Assessing Officer adjourned the case to 1-12-1995. On 1-12-1995 there was a discussion between the representative of the assessee and the Assessing officer. The assessee was called upon to make clarifications regarding various points and was also asked to clarify as to how the depreciation as claimed should not be disallowed and why interest should not be taxed as receipt on the revenue account. It is contended by the assessee that the Assessing Officer was in the midst of the proceedings under Section 143 (3) of the act. However, Assessing Officer issued intimation/order under Section 143 (l) (a) of the Act, vide Annexure D, rejecting the return of income as computed by the assessee resulting in disallowing depreciation as claimed and by taxing the interest income of Rs. 1,07,85,590/- as income from other sources and thus raised the demand of Rs. 1,30,83,741/- under various heads and section of taxes, surcharge and additional tax under Sections 143 (1a), 234a and 234b.

( 5 ) MR. Shah, learned Counsel appearing for the assessee, has contended that once the Assessing Officer has exercised option to proceed under Section 143 (3) of the Act by issuing notice under Section 143 (2) of the Act even if adjustments that may be made by the Assessing Officer are in order, assessing Officer has forfeited the authority to act under Section 143 (1) by virtue of his option having exercised to make an assessment under Section 143 (3) of the act by issuing a notice under Section 143 (2) of the Act.

( 6 ) AS against this Mr. Shelat, learned counsel, has contended that it is open for assessing Officer to follow the procedure under Section 143 (1) and 143 (2) simultaneously. His contention is that it is open to have parallel procedings and is not compulsory to assess as per Section 143 (3) of the act though notice under Section 143 (2) of the Act is issued and before making asses