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Facts
The assessee, a private discretionary trust, filed its return for AY 2022-23 showing a total income of Rs.19,27,73,730/-. The return was processed under Section 143(1) making an adjustment of Rs.52,20,899/- by disallowing the set-off of brought forward capital loss from an earlier year.
Held
The Tribunal held that the order of the Ld. Addl./JCIT(A) was a non-speaking order on merits, violating Section 250(6) of the Act, as it dismissed the appeal on a technical ground without adjudicating the substantive issue raised by the assessee.
Key Issues
Whether the Ld. Addl./JCIT(A) erred in dismissing the appeal on a technical ground without addressing the merits of the adjustment made under Section 143(1) regarding set-off of brought forward capital loss.
Sections Cited
143(1), 143(3), 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 30.01.2025 of the Ld. Additional/Joint Commissioner of Income Tax (Appeals)-1, Siliguri [“Addl./JCIT(A)”] pertaining to Assessment Year (“AY”) 2022-23.
The assessee has raised the following grounds of appeal : “In the fact and the circumstances of the case, and in law, the learned Add/Joint Commissioner of Income-tax (Appeal)-(A) 1 Siliguri, erred
1. In not directing to delete the adjustment of Rs. 52.20,899/- made in the intimation u/s 143(1) in respect of set-off of brought forward capital loss from earlier year.
2. In not appreciating that there were two separate grounds of appeal before CIT(A) viz. (i) in respect of not giving notice/intimation as required by the first proviso to clause (a) of section 143(1) and (1) not allowing set-off of brought forward capital loss from earlier year in the final computation of total income.
3. In not appreciating that the main ground of appeal was regarding correction of apparent arithmetical error in the intimation u/s 143(1) wherein even though the amount of brought forward loses to be set off is same sunder the columns "Amount as provided by the tax payer" and "Amount as computed u/s 143[1]", the same remained to be adjusted in computation of gross total income in the intimation u/s 143(1).
4. In not appreciating that the response was submitted in respect of the prior intimation u/s 143(1)(a) as "disagree" as no details were allowed to be submitted while giving the said response.
In not appreciating that the nature of adjustment proposed to be made while processing the return u/s 143[1] was not clear from the description under the column "Error Description" provided in the prior intimation u/s 143(1)(a).
6. The Appellant craves leave to add to, withdraw or modify any of the grounds of appeal at the time of hearing.”
Briefly stated, the facts of the case are that the assessee is a private discretionary trust. For AY 2022-23, the assessee e-filed its return of income on 19.07.2022 declaring total income of Rs.19,27,73,730/- and claiming refund of Rs.969/- which was subsequently revised by filing a revised return of income on 26.12.2022 without there being any change in the total income earlier declared by the assessee. The return was processed u/s 143(1) of the Income Tax Act, 1961 (the “Act”) making an adjustment of Rs.52,20,899/- in respect of set off of brought forward capital loss from earlier year by disallowing the same. Aggrieved by such order of the CPC, the assessee preferred an appeal before the Ld. Addl./JCIT(A), inter alia, raising the following grounds of appeal relating to the said disallowance:
1. In the facts and circumstances of the case and law, the CPC erred in making adjustment of Rs.52,20,899/- to the total income without issuing a notice/intimation as required by the first proviso to clause (a) of section 143(1).
2. In the facts and circumstance of the case and in law, the CPC erred in not considering the amount of Rs. 52,20,899/- representing the brought forward loss set-off against the long term capital gains in the current year while processing the return u/s 143(1).”
3.1 The Ld. Addl./JCIT(A) dismissed these grounds of appeal by observing as under. “The ground no. 1 & 2 relates to the adjustment of Rs. 52,20,899/- on account of set-off of brought forward loss not considered. As per the appellant, he has not received any notice/intimation in terms of the first proviso to clause (a) of section 143(1) before making the said adjustment to total income. In this regard, the appellant claim was verified from ITBA, CPC- BO portal which reveals that CPC has issued a notice on the same issue vide
DIN. CPC/2223/T12/321166754 dated 27 May 2023. Communication in this regard is affixed below: ………………………………… ………………………………….. The above screenshot clearly reveals that the appellant has been informed about the proposed adjustment but he has chosen to be non-compliant. As regards the first ground of appeal, the appellant has alleged about non- issuing of any notice/intimation before making the proposed adjustment which related to rejection of set-off of loss pertaining to earlier year. In order to find out the background facts, CPC2.0 was examined and copy of the intimation issued before making any such adjustment is affixed in complete negation of the stand taken by the appellant. Thus, the appellant has tried to mislead this office by stating that he has not got any notice about the proposed adjustment u/s 143(1)(a)(ii) by CPC. In this regard, it is imperative to make reference to section 246(1)(a) of Income Tax Act, 1961 which states as under: "Any assessee aggrieved by any of the following orders of an Assessing Officer(below the rank of Joint Commissioner) may appeal to the Joint Commissioner(Appeals) against- a) an order being an intimation under sub-section (1) of section 143, where the assessee objects to the making of adjustments, or any order of assessment under sub-section (3) of section 143 or section 144, where the assessee objects to the amount of income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed;" It is evident that the ground raised by the appellant is not correct and accordingly, the same is liable to be rejected as contrary to the claim made in grounds of appeal, no online response could be submitted against the said adjustment proposed by the CPC. Therefore, ground no. 01 and 02 of this appeal are hereby rejected.”
Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
5. At the outset, the Ld. Counsel for the assessee submitted that the Ld. Addl./JCIT(A) has not decided the impugned issue on merits which is raised by way of ground No. 2 before him reproduced above. The Ld. Addl./JCIT(A) has dismissed the appeal of the assessee merely on technical ground (Ground No. 1) raised by the assessee without considering the merits of the case. He, therefore, prayed that the matter may be set aside to the file of the Ld. Addl./JCIT(A) to adjudicate the issue on merits.
The Ld. DR had no objection to the above request of the Ld. AR.
We have heard the Ld. Representatives of the parties, perused the material on record and the paper book filed by the Ld. AR on behalf of the assessee. The facts of the case are not in dispute. Before Ld. Addl./JCIT(A), the assessee raised a technical ground in ground No. 1 reproduced in the preceding paragraph alleging that no notice/intimation before making adjustment of Rs.52,20,899/- on account of set off of brought forward loss to the total income, has been issued by the CPC in terms of the first proviso to clause (a) of section 143(1). In its second ground, the assessee challenged the impugned issue on merits alleging that the CPC failed to consider the amount of Rs. 52,20,899/- representing the brought forward loss set-off against the long term capital gains in the current year while processing the return u/s 143(1). Perusal of the Ld. Addl./JCIT(A)’s order reveals that he has dismissed the appeal of the assessee only by adjudicating the technical ground (ground No. 1) by the assessee for the reasons reproduced in the preceding paragraph. His appellate order is completely silent on the merits of the case challenged by the assessee by way of ground No. 2 raised before him. The impugned order passed by the Ld. Addl./JCIT(A) is a non-speaking order on merits of the case. Therefore, in our view, the impugned order passed by the Ld. Addl./JCIT(A) is in violation of the provisions of section 250(6) of the Act. The Ld. Addl./JCIT(A) has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereof and the reasons for the decision in respect of each of the grounds of appeal raised before him.
Considering the totality of the facts and in the circumstances of the case enumerated above, we deem it fit and proper, in the interest of justice and fair play, to set aside the order of the Ld. Addl./JCIT(A) and restore the matter back to his file for adjudication afresh on merits and pass speaking order on merits as per facts and law, after allowing reasonable opportunity of being heard to the parties. Needless to say, the assessee shall provide the requisite support in terms of filing the relevant submissions and supporting documents/evidence as may be required/called upon, without seeking adjournment under any pretext unless required for sufficient cause, failing with the Ld. Addl./JCIT(A) shall be at liberty to pass an appropriate order as per law. We direct and order accordingly. The grounds of appeal raised by the assessee are therefore allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 27th June, 2025.