Loading judgment…
Facts
The assessee, Tara Maa Gold, filed an appeal against the order of the Ld. CIT(A) which confirmed the disallowance of partners' remuneration made by the Assessing Officer (CPC) while computing total income under Section 143(1) of the Income Tax Act for AY 2020-21.
Held
The Tribunal held that the intimation issued under Section 143(1) was unsustainable because no show cause notice had been issued to the assessee as required by the first proviso to Section 143. The addition made under Section 143(1) was therefore deleted, and it was clarified that verification could only be done under Section 143(3).
Key Issues
Whether an addition made under Section 143(1) without issuing a show cause notice as per the first proviso to Section 143 is valid, and if issues in a Section 143(1) intimation can be subject to verification meant for Section 143(3).
Sections Cited
250, 143(1), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
Present for: Appellant by : Shri Debayan Patra, FCA Respondent by : Sm. Ruchika Sharma, Sr. DR Date of Hearing : 28.04.2025 Date of Pronouncement : 28.04.2025 O R D E R Per Bench : This is an appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi [hereinafter referred to as “the Ld. CIT(A)”] vide order no. ITBA/NFAC/S/250/2024- 25/1069963854(1) dated 25.10.2024 passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2020-21.
Shri Debayan Patra, FCA appeared on behalf of the assessee and Smt. Ruchika Sharma, Sr. DR appeared on behalf of the revenue.
It was submitted by the Ld. AR that the Ld. CIT(A) erred in confirming the disallowance on account of partners’ remuneration as disallowed by the Assessing Officer, CPC while computing the total income under the
In reply, the Ld. Sr. DR vehemently supported the orders of the Assessing Officer and the Ld. CIT(A). It was the submission that the issue can be restored to the file of the Assessing Officer for further verification.
We have considered the rival submissions. Obviously, the appeal is against the order passed u/s. 143(1). Consequently, the issues cannot be sent back to the Assessing Officer for verification in so far as the verification can be done in an order u/s. 143(3) of the Act only. Further, a perusal of the intimation issued u/s. 143(1) dated 15.02.2021 shows that no show cause notice has been issued to the assessee as per the requirement of the 1st proviso to section 143 of the Act. This having not been done, we are of the view that the intimation issued u/s. 143(1) is unsustainable and consequently, the addition made u/s. 143(1) of the Act is deleted.
In the result, the appeal of the assessee stands allowed.