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Facts
The assessee's return for AY 2018-19 was processed by CPC under Section 143(1) with adjustments, followed by a Section 143(2) notice and Section 143(3) assessment. The assessee appealed the 143(1) adjustments to the CIT(A), who dismissed the appeal as infructuous, holding that the 143(1) intimation would not survive the 143(2) notice, without considering merits.
Held
The Tribunal clarified that, as per Section 143(1D) proviso, for AY 2017-18 onwards, processing under Section 143(1) can be done despite a Section 143(2) notice. Thus, the CIT(A) erred in dismissing the appeal and should have decided it on merits. The Tribunal set aside the CIT(A)'s order and remitted the case back for adjudication on merits.
Key Issues
Whether the processing of a return under Section 143(1) becomes infructuous upon the issuance of a notice under Section 143(2) for assessment years commencing from 2017-18 onwards, as per the provisions of Section 143(1D).
Sections Cited
143(1), 143(1D), 143(2), 143(3)
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Income Tax Appellate Tribunal, “C” BENCH, CHENNAI
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI MANU KUMAR GIRI, JM
(िनधा(रण वष( / Assessment Year: 2018-19) M/s. Tagros Chemicals India Pvt. Ltd. ITO बनाम 72, Raja Annamalai Building, Corporate Circle-3(1), Marshals Road, Egmore, Chennai. / Vs. Chennai-600 008. �थायीलेखासं./जीआइआरसं./PAN/TAN No. AAACT-2952-K (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Shri Abhishek Murali (CA) – Ld.AR ��थ�कीओरसे/Respondent by : Shri R.Clement Ramesh Kumar (CIT) -Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 31-12-2024 घोषणाकीतारीख /Date of Pronouncement : 01-01-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)
Aforesaid appeal by assessee for Assessment Year (AY) 2018-19 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 16-08-2024 in the matter of an intimation issued by CPC u/s 143(1) of the Act on 02-11-2019.
From the facts it emerges that the assessee’s return of income was processed u/s 143(1) by CPC on 02-11-2019 making certain adjustments / disallowances. In the meanwhile, the case was subjected to regular scrutiny and notice u/s 143(2) was issued on 23-09-2019 and an assessment was framed u/s 143(3) subsequently. The starting point of income computation by Ld. AO was income as determined by CPC.
Aggrieved by initial adjustment / disallowance as made by CPC on 02-11-2019, the assessee preferred further appeal before Ld. CIT(A). However, Ld. CIT(A) held that intimation issued u/s 143(1) subsequent to the issue of notice u/s 143(2) would not survive. Accordingly, the appeal was dismissed as infructuous without going into the merits. Aggrieved, the assessee is in further appeal before us.
We find that the provision of sub-section (1D) of Sec. 143(1) has been given a sunset clause. As per sub-section (1D), the processing of return of income shall not be necessary where a notice has been issued to the assessee u/s 143(2). However, proviso provides that the provisions of this sub-section shall not apply to any return furnished for assessment year commencing on or after the 1st day of April, 2017. In other words, from AY 2017-18 onwards, the processing u/s 143(1) could be done despite the issuance of notice u/s 143(2). In such a case, Ld. CIT(A) should have decided the appeal on merits. Accordingly, we set aside the impugned order and remit the appeal back to the file of Ld. CIT(A) for adjudication on merits. The assessee is directed to substantiate its case.