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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Shri Mahavir Prasad & Shri Amarjit Singh
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH (Conducted Through Virtual Court) Before: Shri Mahavir Prasad, Judicial Member And Shri Amarjit Singh, Accountant Member ITA No. 1789/Ahd/2018 Assessment Year 2006-07
Lakhi Electronics Pvt. The ITO, Ltd. 1114/A, Gundis Pole, Ward-2(1)(3), Nr. Bank of India, Vs Ahmedabad Opp. Dhana Suthars Pole, (Respondent) Relief Road, Ahmedabad PAN: AAACL6617R (Appellant)
Revenue by: Shri V.K. Singh, Sr. D.R. Assessee by: Shri Divya Agrawal, A.R.
Date of hearing : 22-10-2021 Date of pronouncement : 18-11-2021 आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This assessee’s appeal for A.Y. 2006-07, arises from order of the CIT(A)-2, Ahmedabad dated 29-06-2018, in proceedings under section 154 of the Income Tax Act, 1961; in short “the Act”. 2. The assessee has raised following grounds of appeal:- “1) The learned CIT(A) has erred in confirming the rejection of application u/s. 154 made by A.O. on the ground of time barring. In as much the intimation u/s. 143(1) was received on 28/06/2016 and the application u/s. 154 was in time. 2) The learned CIT(A) has erred in confirming the disallowance made by A.O. in respect to not allowing set off of b/f business loss of Rs. 1,57,785 i.e. A.Y. 1999-2000 Rs.36,878, A.Y.2000- 2001 Rs. 75,406, A.Y.2001-2002 Rs. 45,501, against business income in A.Y. 2006-07”
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The brief facts of the case are that the assessee filed return of income for assessment year 2006-07 on 29th December, 2016. Thereafter, the assessee has received notice dated 7th December, 2016 for payment of outstanding demand from the Assessing Officer on 15th Jan, 2016. In response to the above referred notice of demand, the assessee has brought to the notice of the Assessing Officer vide letter dated 21st June, 2016 that it had not received any intimidation u/s. 143(1) for the assessment year 2006- 07 on the basis of which outstanding demand of Rs. 53,147/- was reported in the notice. Thereafter, the Assessing Officer has issued letter dated 24th June, and provided copy of intimation for assessment year 2006-07 and requested the assessee to make payment of demand pertaining to the ay2007- 08. The assessee has informed the Assessing Officer vide letter dated 11th July, 2016 that it has just received the intimation u/s. 143(1) on 28-06-2016 and brought to his notice that credit of brought forward losses and credit of unabsorbed depreciation was not given. The assessee has requested the Assessing Officer to rectify the same. However, the Assessing Officer vide letter dated 22nd August, 2016 rejected the application dated 11th July, 2016 on the ground that limitation for passing of order u/s. 154 of the I.T. Act had already been expired on 31st March, 2012.
Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee reiterating the finding of the Assessing Officer.
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During the course of appellate proceedings before us, the assessee has filed paper book comprising the details and copies of documents filed before the lower authorities in support of his claim that it has not received any intimation u/s. 143(1) of the act, therefore, the ld. counsel has submitted that ld. CIT(A) is not justified in dismissing the appeal of the assessee on technical ground in spite of the fact that no intimation u/s. 143(1) has been issued to the assessee. On the other hand, the ld. Departmental Representative supported the order of lower authorities.
Heard both the sides and perused the material on record. As per the material on record, assessee has filed return of income for assessment year 2006-07 on 29th December, 2016. It has received recovery notice dated 07- 06-2016 from the Assessing Officer for payment of outstanding demand of Rs. 53,147/-. In response, the assessee has reported that it has not received any intimation u/s. 143(1) of the act till date. Thereafter, vide letter 24th June, 2016 the Assessing Officer had supplied the copy of intimation u/s. 143(1) of the act. After perusal of the intimation received from the Assessing Officer on 26th June, 2016 the assessee has noticed that in the intimation set off of brought forward losses were not allowed because of which assessee was asked to pay the demand of Rs. 53,150/-. Since it was mistake apparent on record, the assessee has applied for rectification u/s. 154 vide dated 11th July, 2016. The Assessing Officer had rejected the application u/s. 154 on the ground that application of rectification of the assessee was time barred. In this regard, we observed that ld. CIT(A) has not considered the aforesaid material facts reported by the assessee in the form no. 35 that no intimation u/s. 143(1) was received till 26th June, 2016.
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The ld. CIT(A) has not given his finding on the aforesaid issue in accordance with the provision of section 250(6) of the act which has provided that in the decision, first appellate authority is to state the point arising in appeal and the reason for such decision. It is also noticed that Assessing Officer has also not brought on record that any intimation u/s. 143(1) was issued to the assessee for the year under consideration to controvert the claim of the assessee. Section 154(7) of the act state that no amendment under this section shall be made after the expiry of four years from the end of financial year in which the order sought to be amended was passed. But in the case of the assessee as per the material on record no intimation was served within the period of 4 years, therefore, it was not in the knowledge of the assessee that some adjustment on account of not allowing set off of carry forward business loss has been made which resulted in arising demand. In the case of (2013) taxman.com 31 (Delhi) Court on Its Own Motion Vs. CIT, we have perused the decision of Hon’ble High Court of Delhi. In response to the public litigation regarding difficulties faced by the assessee wherein regarding un-communicated intimation u/s. 143(1), the Hon’ble High Court has held as under:- “33. The second grievance of the assessee is with regard to the uncommunicated intimiations under Section 143(1) which remained on paper/file or the computer of the Assessing Officer. This is serious challenge and a matter of grave concern. The law requires intimation under Section 143(1) should be communicated to the assessee, if there is an adjustment made in the return resulting either in demand or reduction in refund. The uncommunicated orders/intimations cannot be enforced and are not valid. Respondents in the counter affidavit have not dealt with this problem on the assumption that the Assessing Officer who had manually processed the returns and passed the order/intimations under Section 143(1) would have necessarily followed the statute and communicated the said orders/intimations. In case the said orders/intimations under Section 143(1) were communicated or dispatched to the assessees, the directions given by us below would not be a cause for any grievance and will not be a matter of concern for the Revenue. We also accept the contention of the Revenue that where an order under Section 143(1) was sent and communicated to the assessee but could not be served due to non-availability/change of address or other valid reasons, should not be treated at par with cases where there is no communication or no attempt is made to serve the order whatsoever. But when there is failure to dispatch or send communication/intimation to the assessee consequences must follow. Such intimation/order prior
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to 31st March, 2010, will be treated as non est or invalid for want of communication/service within a reasonable time. This exercise, it is desirable should be undertaken expeditiously by the Assessing Officers. CBDT will issue instructions to the Assessing Officers. 34. The onus to show that the order was communicated and was served on the assessee is on the Revenue and not upon the assessee. We may note in case an order under Section 143(1) is not communicated or served on the assessee, the return as declared/filed is treated as deemed intimation and an order under Section 143(1). Therefore, if an assessee does not receive or is not communicated an order under Section 143(1), he will never know that some adjustments on account of rejection of TDS or tax paid has been made. While deciding applications under Section 154, or passing an order under Section 245, the Assessing Officers are required to know and follow the said principle. Of course, while deciding application under Section 154 or 245 or otherwise, if the Assessing Officer comes to the conclusion and records a finding that TDS or tax credit had been fraudulently claimed he will be entitled to take action as per law and deny the fraudulent claim of TDS etc. The Assessing Officer, therefore, has to make a distinction between fraudulent claims and claims which have been rejected on ground of technicalities but there is no communication to the assessee of the order/intimation under Section 143(1). In the later cases, the Assessing Officer cannot turn around and enforce the demand created by uncommunicated order/intimation under Section 143(1). This is the fifth mandamus which we have issued.”
After perusal of the finding of the Hon’ble High Court as per law it is required that intimation u/s. 143(1) should be communicated to the assessee, if there is an adjustment made in the return resulting either in demand or reducing in refund. The un-communication orders/intimations cannot be enforced and are not valid. The onus to show that the order was communicated and served on the assessee is on the revenue and not upon the assessee. Here in the case of the assessee the lower authority has not demonstrated from any material that the intimation u/s. 143(1) for the assessment year 2006-07 was served within the four years of passing the intimation. It is mentioned in the finding of the Hon’ble High Court that while deciding application u/s. 154, the Assessing Officer is required to know and follow the aforesaid principle laid down in the finding of the Hon’ble High Court. Since the Assessing Officer has not communicated the intimation u/s. 143(1) to the assessee as elaborated supra, therefore, in the light of the finding of the Hon’ble High Court as supra, we direct to consider the case of the assessee on merit after examination of the claim of the
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assessee. In the result, this ground of appeal of the assessee is allowed for statistical purposes.
The assessee has filed additional ground of appeal as follows:- “1. The Learned CIT(A) has erred both in law and facts by holding intimation u/s 143(1)(a) as order under the provision of section 154(7) of Income Tax Act, 1961 ignoring provisions of section 154(1)(a) of Income Tax Act, according to which restriction of amendment u/s 154 within 4 years is applicable only to order and not to an intimation u/s 143(1)(a) of income tax Act, 1961.”
We do not find any merit in the additional ground of appeal of the assessee because section 154(1)(b) is clearly applicable to intimation u/s. 143(1), therefore, this ground of appeal is dismissed.
In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 18-11-2021
Sd/- Sd/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 18/11/2021 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद