KHUSHBOO SHAH,KOLKATA vs. I.T.O., WARD - 33(2),, KOLKATA

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ITA 2643/KOL/2025Status: DisposedITAT Kolkata13 January 2026AY 2020-2021Bench: SHRI GEORGE MATHAN (Judicial Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee did not claim exempt income or loss from the partnership firm in their return. Therefore, the adjustment made by the CPC without such a claim renders the intimation liable to be quashed. Additionally, the intimation u/s.143(1) was issued without providing the mandatory notice to the assessee about proposed adjustments, making it unsustainable.

What were the facts?

The assessee, an individual partner in a partnership firm, did not offer shares of profit or loss from the firm in their income return. The CPC disallowed the loss related to the partnership firm during intimation processing. The assessee contended that the CPC did not issue the required intimation before making the adjustment.

What were the issues?

Whether the CPC's adjustment and subsequent intimation under Section 143(1) are valid when the assessee did not claim any profit or loss from a partnership firm, and if the mandatory proviso to Section 143(1) was followed.

Which sections of the Income-tax Act were involved?

Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA

Before: SHRI GEORGE MATHAN

Hearing: 13/01/2026Pronounced: 13/01/2026

O R D E R This is an appeal filed by the assessee against the order dated 19.09.2025, passed by the ld.Addl/JCIT(A)-4, Mumbai for the assessment year 2020-2021.

2.

It was submitted by the ld.AR that the assessee is an individual, who is a partner in a partnership firm. The assessee when filing his return has not offered his shares of profits or loss from the partnership firm in his return of income. It was the submission that the CPC while processing the intimation u/s.143(1) of the Act has disallowed the loss in relation to the partnership firm. It was the submission that the CPC has also not issued the intimation as required in the first proviso to Section 143(1) of the Act before making the adjustment. Ld.AR drew my attention to page 34 to 36 of the paper book which are the screenshot of the portal to substantiate its

3.

It was the submission that the intimation issued u/s.143(1) of the Act liable to be quashed.

1.

In reply, ld.Sr. DR vehemently supported the orders of the ld. CPC and ld. JCIT(A).

5.

I have considered the rival submissions. A perusal of the copy of the return filed by the assessee clearly shows that the assessee has not claimed the exempt income in respect of the partnership firm nor has the assessee claimed loss in respect of partnership loss. On this ground itself as the CPC has made the adjustment without such claim being there, the intimation is liable to be quashed and I do so.

6.

Even otherwise, as it is noticed that the intimation u/s.143(1) of the Act has been issued on 25.11.2021 and as on the said date, it was required under the first proviso to Section 143(1) of the Act that the intimation is to be issued to the assessee in respect of any adjustment that is being proposed to be done and as the same has not been issued to the assessee, therefore, the intimation issued u/s.143(1) of the Act is found to be unsustainable and on this ground also the same stands quashed.

7.

In the result, appeal filed by the assessee stands allowed. Order dictated and pronounced in the open court on 13/01/2026. Sd/- (जाजज माथन) (GEORGE MATHAN) न्यानयक सदस्य / JUDICIAL MEMBER कोलकाता Kolkata; ददनाांक Dated 13/01/2026 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant- 2. प्रत्यथी / The Respondent- आयकर आयुक्त(अपील) / The CIT(A), 3.

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