TNQ TECHNOLOGIES PRIVATE LIMITED,CHENNAI vs. CORPORATE WARD 3(1), CHENNAI

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ITA 1426/CHNY/2026Status: DisposedITAT Chennai02 July 2026AY 2020-214 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the assessment order under Section 143(3) supersedes the intimation under Section 143(1) due to the doctrine of merger. The assessee should have appealed against the Section 143(3) order. The appeal against the 143(1) intimation is allowed for the difference in income, and the other issue is remanded.

What were the facts?

The assessee's return was processed under Section 143(1) and an assessment order under Section 143(3) was also passed on the same day. The income assessed under Section 143(3) was lower than that processed under Section 143(1). The assessee appealed against the Section 143(1) intimation, which was dismissed by the CIT(A).

What were the issues?

Whether an appeal against a Section 143(1) intimation is maintainable when a Section 143(3) assessment order has also been passed. The applicability of the doctrine of merger in such cases.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: HONOURABLE GEORGE GEORGE K. & SHRI GAGAN GOYAL

Hearing: 29.06.2026Pronounced: 02.07.2026

PER GAGAN GOYAL, AM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (A), Addl. / JCIT(A)-1, (hereinafter referred as the ‘Ld. CIT(A)’), Nashik dated 16.01.2026 for the assessment year (hereinafter referred as the ‘AY’) 2020-21. GROUNDS OF APPEAL 1) The adjustments are unjustified since the scope of adjustments in proceedings under Section 143(1) is limited to apparent errors or incorrect claims. 2) The variation between the income assessed as per impugned intimation and the returned income is unjustified. 3) The adjustment made in the said impugned intimation is illegal since the proviso to section 143(1) (a) requires that an intimation be given to the assessee of any proposed adjustment. TNQ Technologies Pvt. Ltd. 4) The variation in the impugned intimation is unjustified since on the very same day an assessment u/s 143(3) was made after the scrutiny of the accounts.

5) The Appellant craves leave to adduce additional grounds and to vary the above grounds.

2.

The brief facts of the case are that the assessee company filed its return of income on 12.02.2021 declaring total income at Rs. 48, 51, 53, 200/-. Thereafter, the return of the assessee was processed u/s. 143(1) of the Act vide dated: 20.09.2022 at a figure of Rs. 48, 92, 75, 780/-. It is astonishing that an assessment order u/s. 143(3) r.w.s. 144B of the Act was also passed on the same day, i.e. 20.09.2022 at a figure of Rs. 48,74,24,978/-, i.e. after making addition of Rs. 22, 71,778/- as denial of the deduction claimed under part-B of Chapter-IV of the Act.

3.

Here it is pertinent to mention, in the light of above facts, it is a fact on record that the return of the assessee was dealt with by the Revenue twice i.e. once u/s. 143(1) and then u/s. 143(3) r.w.s. 144B of the Act. It is further noticed that the figure as per the intimation issued u/s. 143(1) of the Act was Rs. 48, 92, 75, 780/- whereas the figure assessed u/s. 143(3) of the Act was Rs. 48,74,24,978/-. Meaning thereby, the income assessed u/s. 143(3) r.w.s. 144B of the Act was lower than the income as processed u/s. 143(1) of the Act by Rs. 18, 50, 800/-. Notwithstanding the above facts, the assessee being aggrieved with the intimation issued u/s. 143(1) of the Act preferred an appeal before the Ld. CIT (A) who in turn dismissed the appeal of the assessee. The assessee being further aggrieved preferred the present appeal before us.

4.

We have gone through the intimation issued u/s. 143(1) of the Act, assessment order u/s. 143(3) r.w.s. 144B of the Act, order of the Ld. CIT (A) and submissions of the assessee along with the grounds taken before us. It is observed that as per the procedure of law once a return is processed u/s. 143(3) r.w.s. 144B of the Act, it will supersede the intimation issued u/s. 143(1) of the Act by virtue of application of doctrine of merger. This essential fact is totally ignored by the assessee while filing the appeal before the Ld. CIT (A) as the assessee was supposed to challenge the order of the AO passed u/s. 143(3) r.w.s. 144B of the Act instead of challenging the intimation passed u/s. 143(1) of the Act. TNQ Technologies Pvt. Ltd.

5.

Albeit, as narrated above, the figure worked out in intimation u/s. 143(1) of the Act vis-à-vis the assessment order u/s. 143(3) r.w.s. 144B of the Act has a difference of Rs. 18, 50, 800/-. Hence, applying the doctrine of merger the assessee automatically got the relief of Rs. 18, 50, 800/-. As far as the balance amount of Rs. 22, 71,778/- as denial of the deduction claimed under part-B of Chapter-IV of the Act is concerned we dismiss the ground taken by the assessee as the appeal filed before us pertains to the intimation u/s. 143(1) of the Act and not the assessment order u/s. 143(3) r.w.s. 144B of the Act. In view of this, as there is a procedural default in the appeal filed by the assessee we decide that relief of Rs. 18, 50, 800/- is already with the assessee and not to be reversed. Whereas, for balance amount of Rs. 22, 71,778/- as denial of the deduction claimed under Part-B of Chapter-IV of the Act is concerned, the assessee may approach the Ld. CIT (A) again against the assessment order u/s. 143(3) r.w.s. 144B of the Act.

6.

The Ld. CIT (A) in view of the above observations, directed to condone the delay in filing of the appeal before him against the assessment order u/s. 143(3) r.w.s. 144B of the Act. In view of the above observations, the grounds taken by the assessee are allowed for statistical purposes.

7.

In the result, the appeal of the assessee is allowed as far as amount of Rs. 18, 50, 800/- is concerned and for second issue amounting to Rs. 22, 71,778/- allowed for statistical purposes in view of our observations above. Order pronounced on the 2nd day of July, 2026, in Chennai. (जॉजज जॉजज के.) (गगन गोयल ) (GAGAN GOYAL) (GEORGE GEORGE K.) लेखा सदस्य/ACCOUNTANT MEMBER उपाध्यक्ष /VICE PRESIDENT चेन्नई/Chennai, ददनाांक/Dated: 2nd July, 2026. आदेश की प्रततललपप अग्रेपषत/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT, Chennai /Madurai/Coimbatore/Salem 4. पवभागीय प्रतततनधि/DR 5. गार्ड फाईल/GF Digitally signed K BABU by K BABU Date: 2026.07.06 14:25:25 +05'30'

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