What did the Tribunal hold?

The Tribunal held that an intimation under Section 143(1) cannot be used to disallow entire expenses without providing reasons. Such an intimation, not reflecting a mistake apparent from the record, is liable to be quashed.

The assessee's returned income was Rs. 27,05,009/-, but the intimation under Section 143(1) assessed the income at Rs. 4,72,31,705/-, disallowing all expenditure. The assessee contended that no reasons were provided for this adjustment and no email with details was received.

What were the issues?

Whether an intimation under Section 143(1) can disallow all expenditure without providing reasons or a mistake apparent from the record.

K1 Security Services Pvt Ltd… vs DCIT | ITAT Cuttack 2024

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

Before: MANISH AGARWAL

For Appellant: Shri A.K.Padhy, hy, CA

For Respondent: Shri Sanjay Kumar, CIT

Hearing: 11/0Pronounced: 11/0

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 Addl/JCIT(A), JCIT(A), Varanasi Varanasi dated 31.10.2023 in in Appeal Appeal No. No. CIT(A), Bhuabenswar- -1/14928/2019-20 for the assessment year for the assessment year 2013-14.

Shri A.K.Padhy, A.K.Padhy, ld AR appeared for the assessee and Shri the assessee and Shri Sanjay Kumar, CIT DR appeared for the revenue. DR appeared for the revenue.

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It was submitted by ld AR that no reason has been given for making adjustment u/s.143(1) of the Act. The returned income of the assessee is 27,05,009/- but as per the intimation, the income of the assessee is assessed at Rs.4,72,31,705/- i.e. the entire expenditure of the assesse has been disallowed and the total receipts of the assessee for the impugned assessment year has been brought to tax. Page 5 of 15 of the intimation issued u/s.143(1) talks of detailed note having been sent as annexure to the email. Ld AR has placed before us the screen shot of the email account, wherein, there is no mention of any email having been received from the CPC. It was the submission of ld AR that under 143(1), what can be done is only arithmetical errors or mistakes apparent from the record. It was the submission that there was no mistake apparent from record. It was the submission that the intimation passed u/s.143(1) of the Act is liable to be quashed.

In reply, ld CIT DR vehemently supported the order of the AO and ld CIT(A).

We have considered the rival submissions. As it is noticed that the intimation has been issued u/s.143(1) of the Act without mentioning the reasons for denial of the expenses claimed and as the intimation does not satisfy the mistake apparent from the record, the intimation as issued u/s.143(1) assessing the assessee’s income at Rs. .4,72,31,705/- stands quashed. P a g e 2 | 3

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

Order dictated and pronounced in the open court on 11/06/2024.

Sd/- sd/- (Manish Agarwal) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 11/06/2024 B.K.Parida, SPS (OS) Copy of the Order forwarded to : 1. The Appellant : K I Security Services Pvt Ltd., Plot No.268/269, Sarala Nagar, Cuttack Road, Bhubaneswar 2. The Respondent: DCIT, Circle-1(1), Aayakar Bhavan, Bhubaneswar 3. The Addl.JCIT(A), Varanasi 4. Pr.CIT, Bhubaneswar 5. DR, ITAT, 6. Guard file. //True Copy// By order

Sr.Pvt.secretary ITAT, Cuttack

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K1 SECURITY SERVICES PVT LTD,BHUBANESWAR vs. DCIT CIRCLE-1(1), BHUBANESWAR

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