What did the Tribunal hold?

The Tribunal held that issuing a show cause notice is compulsory before making any adjustment under Section 143(1). Since no such notice was issued, the intimation is liable to be quashed.

The assessee filed an appeal against an intimation issued under Section 143(1) of the Income Tax Act. The assessee contended that no show cause notice was issued before the adjustment was made. The CPC admitted that a technical issue prevented the trigger of the prima facie adjustment notice.

What were the issues?

Whether a show cause notice is mandatory before making adjustments in an intimation under Section 143(1) of the Income Tax Act.

Sikshya Bharati Trust, Banki vs ITO | ITAT Cuttack 2023

Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,

For Appellant: Shri K.K.Bal, Adv

For Respondent: Shri S.C.Mohanty, Shri S.C.Mohanty, Sr DR

Hearing: 21/09Pronounced: 21/0

O R D E R This is an appeal filed by the assessee against the order of the ld This is an appeal filed by the assessee against the order of the ld This is an appeal filed by the assessee against the order of the ld CIT(A) ,NFAC, Delhi ,NFAC, Delhi dated 10.5.2023 in Appeal No.ITB ITBA/NFAC/S/250/2023- 24/1052730744 24/1052730744(1) for the assessment year 2017-18.

Shri K.K.Bal, ld AR appeared for the assessee and Shri S.C.Mohanty, Shri K.K.Bal, ld AR appeared for the assessee and Shri S.C.Mohanty, Shri K.K.Bal, ld AR appeared for the assessee and Shri S.C.Mohanty, ld Sr DR appeared for the ld Sr DR appeared for the revenue.

It was submitted by ld AR that thi It was submitted by ld AR that this is an appeal against the s is an appeal against the order u/s.143(1) of the Act issued by the CPC. u/s.143(1) of the Act issued by the CPC. It was the submission that as per was the submission that as per the provisions of section 143(1), before making any adjustment, a show the provisions of section 143(1), before making any adjustment, a show the provisions of section 143(1), before making any adjustment, a show cause notice has to be iss cause notice has to be issued to the assessee. It was the submission that ued to the assessee. It was the submission that P a g e 1 | 3 no show cause notice has been issued to the assessee, therefore, the intimation issued u/s.143(1) is liable to be quashed.

In reply, ld Sr DR placed before me a letter from the Centralised Processing Centre, Bengaluru dated 21.9.2023 mentioning as follows:

“Please refer to the trailing mail. I am directed by Director of Income tax, CPC, Bengaluru to communicate as under:- “Since all legal matters ae handled by Unit-4 at CPC, mails are being sent from this unit and not from cit.cpc.bangalore mail. In all the mails sent earlier, pdf of entire intimation u/s.143(1) as downloaded from the portal have been duly sent. Even in the present case i.e. Sikhya Bharati Trust, the pdf of intimation u/s.143(1) issued to the assessee from CPC for A.Y. 2017-18 is forwarded as annexure alongwith screen shot of mail id to which intimation u/s.143(1) is issued. If the complete page nos. are not appearing in intimation u/s.143(1), same cannot be inserted by CPC now.

2. In this case, deprecation of Rs.127,831/- was disallowed while processing the return u/s.143(1) but due to technical issue notice under proviso to section 143(1) i.e. prima facie adjustment notice was not triggered to the assessee. Thus, all other details called for vide trailing mail does not arise in this case.”

It was the submission that not in all cases, show cause notice in respect of intimation u/s.143(1) is required to be issued.

I have considered the rival submissions. A perusal of provisions of section 143(1) of the Act shows that it is compulsory for the revenue to issue show cause notice before making any adjustment in the intimation u/s.143(1) of the Act. The letter received from CPC, Bengaluru also clearly admits that no show cause notice has been issued to the assessee. This being so, as no show cause notice under the provisions of section 143(1)

P a g e 2 | 3 has been issued before making adjustment, the intimation issued u/s.143(1) stands quashed.

In the result, appeal filed by the assessee stand allowed.

Order dictated and pronounced in the open court on 21/09/2023.

SIKSHYA BHARATI TRUST,BANKI vs. ITO (EXEMPTION), CUTTACK

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