DY. COMMISSIONER OF INCOME TAX-5(2)(1), MUMBAI, MUMBAI vs. ADITYA BIRLA HOUSING FINANCE LIMITED, MUMBAI

Facts

The Revenue appealed against the CIT(A)'s orders for three assessment years (2020-21, 2021-22, 2022-23) which had allowed the assessee's challenges against adjustments made in Section 143(1) intimation orders. These adjustments pertained to disallowances under Section 43B (leave encashment, bonus/commission), Income Computation and Disclosure Standards (ICDS) adjustments, and grant of additional TDS credit, which were subsequently incorporated into Section 143(3) assessment orders.

Held

The Tribunal held that the doctrine of merger applied, allowing the assessee to challenge Section 143(1) intimation adjustments in an appeal against a Section 143(3) order if there was common subject matter. It remanded the issues related to Section 43B disallowances and ICDS adjustments back to the Assessing Officer for fresh consideration after granting the assessee a reasonable opportunity of being heard. The grant of additional TDS credit by the CIT(A) was upheld, subject to the Assessee verifying that the corresponding income had been offered for tax.

Key Issues

Whether adjustments made in an intimation under Section 143(1) can be challenged in an appeal against an assessment order under Section 143(3) under the doctrine of merger; and whether the CIT(A) was justified in deleting disallowances under Section 43B and ICDS adjustments, and granting additional TDS credit without a remand report from the AO.