SHRUTI CHANDRASHEKHAR ANGOLKAR,DADAR EAST,MUMBAI vs. ADDL-JCIT(A),BENGALURU, INCOME TAX DEPARTMENT,OFFICE OF THE CIT,APPEAL, ADDL/JCIT(A),BENGALURU
Facts
The assessee claimed an exemption of Rs. 8,73,423/- on account of leave encashment. The CPC processed the return under section 143(1) and disallowed Rs. 5,73,420/- of this exemption. The assessee challenged this addition, not on merit, but on the legal ground that no prior intimation or notice was issued.
Held
The Tribunal noted that as per the first proviso to section 143 of the Act, no adjustments under section 143(1)(a) can be made without providing intimation to the assessee. Since the CPC did not follow this mandatory condition, the addition made by the CPC was deleted.
Key Issues
Whether the addition made by the CPC under section 143(1) is valid without issuing prior intimation or notice to the assessee.
Sections Cited
139(1), 143(1), 10(AA), 10A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “J (SMC
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI GAGAN GOYAL
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order
dated 29.06.2024, impugned herein, passed by the Ld. Addl/JCIT(A)-4,
Bengaluru (in short “Ld. Addl./Joint Commissioner”) for the A.Y.
20213-22.
2 ITA No.4409/M/2024 Mrs. Shruti Chandrashekhar Angolkar
In this case, the Assessee by filing return of income for the
assessment year under consideration u/s 139(1) of the Act on 30.12.2021
within the extended due date had claimed the exemption of Rs.8,73,423/-
on account of leave encashment. The return filed by the Assessee was
processed by the CPC vide intimation/order dated 22.03.2022 u/s. 143(1)
of the Act, whereby the addition of Rs.5,73,420/- on account of
disallowance of exemption claimed u/s 10(AA) of the Act was levied.
The Assessee, being aggrieved, challenged the said addition before
the Ld. Commissioner, who by holding affirmed the said addition by
observing and holding as under:
“That earlier the exemption limit on account of leave encashment received by private sector employees was Rs.3,00,000/- which is not increased to Rs.25,00,000/- as per budged 2023-24 and as the Assessee has received Rs.8,73,423/- on account of leave encashment and therefore as per the provisions of section 10(AA) of sub section 10A of the Act, Rs.3,00,000/- can be allowed as exempted. The AO, CPC while processing the return of income of the Assessee, the CPC has rightly disallowed the excess claimed by the Assessee”.
The Assessee, being aggrieved, is in appeal before us.
We have heard the parties and perused the material available on
record. The Assessee has not challenged the addition on merit but in fact
3 ITA No.4409/M/2024 Mrs. Shruti Chandrashekhar Angolkar challenged the same on the legal ground to the effect that the CPC while
processing the return filed by the Assessee or issuing the intimation/order
143(1) of the Act or before making the adjustment u/s 10(AA) of the Act,
has not issued any notice/intimation to the Assessee and therefore the
addition made on adjustment, is liable to be deleted.
The Ld. D.R. refuted the claim of the Assessee, but not the factual
aspect qua not issuing any intimation/notice before making the
adjustment.
Having heard the parties and given thoughtful consideration to the
rival submission of the parties and material available on record, we
observe that admittedly first proviso to section 143 of the Act, mandates
that no adjustments as prescribed in sub clause (a) of section 143(1) of
the Act shall be made, unless an intimation is given to the Assessee of
such adjustments either in writing or in electronic mode. It appears from
record and submission of the parties that in the instant case, the CPC has
not followed such mandatory condition. Hence, we are constrained to
allow the claim of the Assessee by deleting the adjustment/addition of
Rs.5,73,420/-, however subject to verification by the jurisdictional AO
whether any intimation/notice has ever been issued before processing the
return or making the adjustment or issuing the intimation/order u/s
143(1) of the Act or not.
4 ITA No.4409/M/2024 Mrs. Shruti Chandrashekhar Angolkar
In the result, the appeal filed by the Assessee stands allowed in the
direction made above.
Order pronounced in the open court on 30.10.2024.
Sd/- Sd/- (GAGAN GOYAL) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER
* Kishore, Sr. P.S.
Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench
//True Copy//
By Order
Dy/Asstt. Registrar, ITAT, Mumbai.
