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Facts
The assessee, a public sector undertaking, filed its return of income, which was processed under Section 143(1) of the Income-tax Act, 1961, with certain adjustments. The assessee appealed the intimation to the CIT(A), who dismissed it on the grounds that the intimation merged with a subsequent Section 143(3) assessment. The assessee further appealed to the Tribunal.
Held
The Tribunal found that the Centralised Processing Centre (CPC) failed to issue a mandatory notice, as required by the proviso to Section 143(1), before making the adjustments to the returned income. Consequently, the adjustments were deemed invalid. The matter was set aside to the CPC with a direction to issue the requisite notice and then re-process the return of income according to law.
Key Issues
Whether the adjustments made under Section 143(1) were valid without issuing a prior notice to the assessee as per the proviso to Section 143(1) of the Income-tax Act.
Sections Cited
143(1), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Inturi Rama Rao & Shri Prakash Chand Yadav
Asst.Year 2020-2021 Cochin Shipyard Limited The Deputy Commissioner of Finance Department v. Income-tax, Corp.Cir.1(1) Administrative Building Kochi. Perumanur S.O. Ernakulam – 682 015. PAN : AAACC6905B. (Appellant) (Respondent) Appellant by : Sri.Gopi K, CA Respondent by : Sri.Sanjit Kumar Das Date of Date of Hearing : 27.02.2025 Pronouncement : 24.03.2025 O R D E R
Per Inturi Rama Rao, AM :
This appeal filed by the assessee is directed against the order of the National Faceless Assessment Centre / Commissioner of Income- tax (Appeals) [“CIT(A)” for short] dated 18.03.2024 having DIN & Order No.ITBA/APL/S/250/2023-24/1062839956(1) for the assessment year 2020-2021.
Brief facts of the case are that the assessee is a public sector undertaking engaged in the business of building and repairing of ships, tugs and small crafts. The return of income for the assessment year 2020-2021 was filed on 12th February, 2021 declaring an income of Rs.918,909,76,790. The said return of income was processed u/s.143(1)
. Cochin Shipyard Limited. of the Income-tax Act, 1961 (“the Act” hereinafter) vide intimation dated 20th September, 2021, after making certain adjustments to the returned total income.
Being aggrieved by the said intimation, an appeal was filed before the CIT(A), who vide impugned order dismissed the appeal by holding that since the subsequent processing of return u/s.143(1) scrutiny assessment was completed u/s.143(3) of the Act, the intimation gets merged with the order passed u/s.143(3) of the Act. Therefore, after the merger, the intimation u/s.143(1) dated 20.09.2021 does not survive.
Being aggrieved by the order of the CIT(A), the assessee is in appeal before us in the present appeal. During the course of hearing the learned Counsel for the assessee submits that before making the adjustment u/s.143(1), the CPC have failed to give any notice as envisaged in the proviso to sec.143(1) of the Act, and therefore, the intimation is bad in law.
On the other hand, the learned Sr.DR could not produce any evidence to show that the CPC before making the adjustment had given any notice of the proposed adjustment.
We have heard the rival submissions and perused the material available on record. The provisions of sec.143(1) provides for making adjustment while processing the return. Sec.143(1) also provides that before making such adjustment, an intimation of the proposed adjustment shall be issued to the assessee. Admittedly, in the present case CPC had failed to issue notice of the proposed adjustment to the . Cochin Shipyard Limited. returned income u/s.143(1) of the Act, and therefore, it cannot be said that the adjustment made to the returned income are valid in law. We, therefore, set aside the matter to the file of the CPC to the stage of processing the return of income with a direction to give notice of the proposed adjustment to the assessee and then process the return of income in accordance with law.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes..
Order pronounced on this 24th day of March, 2025.