GAI PROJECTS PVT. LTD.,KOLKATA vs. ITO, WARD-12(1), KOLKATA

The only issue raised by the assessee in the various grounds of appeal is against the order of Ld. CIT(A) upholding the order passed u/s. 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) by AO, CPC wherein an addition of Rs.98,37,659/- was made without giving notice/opportunity to the assessee before making the addition.

Brief facts of the case are that the assessee filed return of income on 19.11.2020 declaring nil income with book profit under MAT of Rs.24,07,286/-. Thereafter, the assessee filed revised return on 18.12.2020. The AO, CPC processed the return and issued intimation u/s. 143(1) of the Act making an addition of Rs.95,37,659/- under the head income from business and profession without giving any notice to the assessee of such addition.

The aggrieved assessee filed an appeal before the Ld. CIT(A) and the Ld. CIT(A) dismissed the appeal by holding that the assessee has filed rectification petition before AO, CPC besides, filing appeal before Ld. CIT(A) against the intimation u/s. 143(1) of the Act. Ld. CIT(A) noted that rectification u/s. 154 of the Act was passed by AO, CPC rejecting the contention of the assessee vide order dated 14.12.2021 and, therefore, the intimation issued

After hearing the rival contentions and perusing the material available on record, we find that the Ld. CIT(A) has dismissed the appeal of the assessee on technicalities without going into the merit of the case but as a matter of fact, we observe that while processing the return of the assessee and passing order u/s. 143(1) of the Act, the assessee was not given any opportunity or notice of hearing qua the addition before passing the said order u/s. 143(1) of the Act. In our opinion, it is mandatory requirement failing which the addition of Rs.95,37,659/- cannot be sustained. Ld. CIT(A) has dismissed the appeal merely on the ground that assessee has moved petition u/s. 154 of the Act against the intimation u/s. 143(1) besides filing of appeal before the Ld. CIT(A). Ld. CIT(A) noted that in the meantime order u/s. 154 of the Act was passed on 24.12.2021 which was assailable before the Ld. CIT(A) and not the intimation issued u/s. 143(1) which stands merged with the order passed u/s. 154 of the Act. The said reasoning given by Ld. CIT(A) is not cogent and convincing. Accordingly, we set aside the order of Ld. CIT(A) and direct the AO to delete the addition. Appeal of the assessee is allowed.

In the result, the appeal of the assessee is allowed.