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Facts
The assessee filed his return for AY 2022-23, which was processed under Section 143(1) of the Income Tax Act, 1961. An addition of Rs. 10,25,170 was made without issuing a notice or providing an opportunity to the assessee. The CIT(A) dismissed the appeal.
Held
The Tribunal held that the principles of natural justice were violated as the assessee was not given an opportunity to be heard before the adjustments were made under Section 143(1). The order of the CIT(A) was set aside.
Key Issues
Whether the adjustment made under Section 143(1) without providing a show-cause notice and opportunity to the assessee violates principles of natural justice and statutory provisions.
Sections Cited
143(1), 143(1A), 10(10AA)(ii)
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Income Tax Appellate Tribunal, “ B ” BENCH, AHMEDABAD
Before: Shri Sanjay Garg & Smt. Annapurna Gupta
"ी संजय गग", "ाियक सद" एवं "ीमित अ"पूण" गु"ा, लेखा सद" के सम&। ] ] Before Shri Sanjay Garg, Judicial Member And Smt. Annapurna Gupta, Accountant Member आयकर अपील सं / Year : 2022-23 Ravindra Jagannath Saindane Asst./Dy. CIT बनाम/ B2/8/13 Circle-2(1)(1) v/s. Sector-16 Vadodara Vashi Navi Mumbai – 400 703 "थायी लेखा सं./PAN: AHFPS 2405 R (अपीलाथ)/ Appellant) (*+ यथ)/ Respondent) Assessee by : Shri Bhupendra C. Mehta, Advocate Revenue by : Shri Sanjay Jain, Sr.DR सुनवाई की तारीख/Date of Hearing : 29/04/2025 घोषणा की तारीख /Date of Pronouncement: 30/04/2025 आदेश/O R D E R
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax, National Faceless Appeal Centre, Delhi [hereinafter referred to as ‘CIT(A)’], dated 12/12/2024 passed for the Assessment Year (AY) 2022-23.
The assessee, in this appeal, has taken following grounds of appeal:
1. The Ld Addl JCIT A grossly erred on facts and in law in dismissing the appeal without adjudicating the preliminary issue raised regarding the violation of statutory provision of Sec 143 1 1 a of the Income tax Act 1961 the Act in the form of non issue and service of the notice by the Ld AO us 143 1 a of the Act before making the adjustment of Rs. 1025170. Ravindra Jagannath Saindane vs.Asst.Dy.CIT Cir-2(1)(1), Vadodara Asst. Year : 2022-23
2. The Ld Addl JCIT A grossly erred on facts and in law in not considering and adjudicating the raised ground in the appeal that the addition made by the Ld AO is without jurisdiction and authority of law.
3. The Ld Addl JCIT A has grossly erred in law and is not justified in confirming the addition made by the Ld AO without deciding the involved question of law and not allowing the exemption exceeding Rs 3 lakhs u s 10 10 AA ii of the Act considering the invalid Gazette Notification No 50588 E dated 31 05 2002 issued by CBDT effective 01 04 1998.
4. On merit also, the exemption claimed by the appellant exceeding Rs.3 lakhs is allowable.
5. Your appellant craves leave to add amend alter any ground of appeal.”
3. The brief facts of the case are that the assessee filed his return of income for the Financial Year (FY) relevant to the Assessment Year (AY) 2022-23 which came to be processed under the provisions of section 143(1) of the income Tax Act, 1961 (hereinafter referred to as ‘the Act’). The said return came to be processed and summarily assessed under the provisions of section 143(1A) of the Income Tax Act, 1961 by making addition of Rs.10,25,170/- under the provisions of section 10(10AA) (ii) of the Act.”
Being aggrieved by the said order of the CPC, the assessee preferred appeal before the Ld.CIT(A), however could not succeed.
The Ld.Counsel for the assessee has submitted that while processing the return of income of the assessee u/s.143(1) of the Act, the CPC has not followed the prescribed procedure. The CPC has not given opportunity to the assessee to furnish the reply and defend his case. He has further submitted that as per the relevant provisions of section 143(1) of the Act, the Ravindra Jagannath Saindane vs.Asst.Dy.CIT Cir-2(1)(1), Vadodara Asst. Year : 2022-23 3 CPC/Assessing Officer (AO) was supposed to give intimation to the assessee in respect of any proposed adjustments while processing the return of income of the assessee and was also supposed to consider the response, if any, given by the assessee.
The Ld.DR, however, has relied upon the findings of the lower authorities.
We have considered the rival contentions and gone through the record. We find that, in this case, the principles of natural justice has been violated as the assessee has not been given any opportunity before making the impugned adjustments to the income of the assessee while processing the return u/s.143(1) of the Act. This act of the CPC/AO is against statutory provisions of section 143(1) of the Act. We, therefore, set aside the impugned order of the CIT(A) and restore the matter to the file of CPC/AO with direction to intimate/show-cause the assessee in respect of the impugned adjustments, consider the reply/explanation, if any, furnished by the assessee in this regard and, therefore, to pass a fresh intimation u/s.143(1) of the Act.