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Facts
The assessee, Veer Mehra Trust, filed an appeal against an order passed under Section 250 of the Income Tax Act. The Ld. CIT(A) had dismissed the assessee's appeal due to a 190-day delay, which the assessee attributed to pursuing a rectification application under Section 154 against an intimation issued under Section 143(1). The assessee contended that the Section 143(1) intimation was issued without a show cause notice and impermissibly changed its status to an AOP.
Held
The Tribunal condoned the delay in filing the appeal, recognizing the rectification application as a reasonable cause. It held that the issuance of a show cause notice is a condition precedent for an intimation under Section 143(1), and changing the assessee's status without one is not permissible. Consequently, the intimation issued under Section 143(1) was quashed.
Key Issues
Whether the delay in filing an appeal should be condoned when an alternate remedy was pursued, and whether an intimation under Section 143(1) is valid if issued without a show cause notice and results in a change of the assessee's status.
Sections Cited
250, 143(1), 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
PER BENCH: The captioned appeal by the assessee is against the order of the Ld. Addl/JCIT(A)-Jodhpur [hereinafter referred to as the ‘Ld. CIT(A)’] vide order dated 17.12.2024 passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2023-24. I.T.A. No.: 2627/KOL/2024 Assessment Year: 2023-24 Veer Mehra Trust.
Shri Akkal Dudhwewala, FCA represented on behalf of the assessee and Smt. Ruchika Sharma, Addl. CIT (DR) appeared on behalf of the Revenue.
It was submitted by the Ld. AR that the Trust has only one minor beneficiary. It was submitted that the return filed by the assessee came to be processed and an intimation came to be issued u/s 143(1) of the Act without a show cause notice assessing the income of the assessee as an AOP. It was further submitted that the Ld. CIT(A) dismissed the appeal of the assessee on account of delay of 190 days. It was the submission that the delay was on account of the fact that the assessee had filed an application u/s 154 of the Act and immediately when the 154 order was disposed off, the assessee had filed the appeal against the intimation order. It was further submitted that the delay may be condoned in respect of the delay before the Ld. CIT(A) and the appeal disposed off as the appeal itself is having limited issue.
In reply, the Ld. Sr. DR vehemently supported the order of the Ld. CIT(A) and the Ld. AO and submitted that the assessee should have filed the appeal within time.
We have considered the rival submissions. The facts in the present case show that the delay in filing the appeal is on account of the assessee attempting at an alternate remedy of the rectification application. This is a reasonable cause. This being so, the delay in filing the appeal before the Ld. CIT(A) stands condoned. A perusal of the facts of the present case clearly shows that no show cause notice had been issued to the assessee before the intimation has been issued u/s 143(1) of the Act. Issuance of a show cause notice is a condition precedent as per the provision of section u/s 143(1) of the Act. On account of the I.T.A. No.: 2627/KOL/2024 Assessment Year: 2023-24 Veer Mehra Trust. failure to issue the show cause notice as also on account of the fact that the status of the assessee has been changed in the intimation and this itself is not permissible, the intimation issued u/s 143(1) of the Act is quashed.
In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 29th April, 2025. [Rakesh Mishra] [George Mathan] Accountant Member Judicial Member Dated: 29.04.2025 Bidhan (P.S.) I.T.A. No.: 2627/KOL/2024 Assessment Year: 2023-24 Veer Mehra Trust. Copy of the order forwarded to:
Veer Mehra Trust, P-22, CIT Road, Entally, Kolkata, West Bengal, 700014. 2. ITO, Ward-1(2), Exempt, Kolkata.
Addl/JCIT(A)-Jodhpur.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order