Loading judgment…
Facts
The assessee filed a return of income which was processed under section 143(1) with certain adjustments. Subsequently, a scrutiny assessment under section 143(3) was completed. The assessee appealed against the section 143(3) order, challenging the adjustments made in the section 143(1) intimation, but the CIT(A) dismissed the appeal as infructuous. The assessee contended that the section 143(1) intimation merges with the section 143(3) assessment order.
Held
The Tribunal held that the CIT(A) rightly dismissed the grounds of appeal as infructuous because the additions disputed in the grounds did not emanate from the assessment order under section 143(3) that was challenged. The facts of the case relied upon by the assessee were not applicable.
Key Issues
Whether the CIT(A) was correct in dismissing the assessee's appeal as infructuous when the appeal challenged adjustments made in the section 143(1) intimation order, and whether the section 143(1) intimation merges with the subsequent section 143(3) assessment order.
Sections Cited
43B, 143(1), 143(3), 246, 246A, 11
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
This appeal has been preferred by the assessee against order dated 09.07.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2018-19, raising following grounds:
The learned Commissioner of Income Tax erred dismissing all the grounds in appeal as infructuous.
IMA PD India Pvt. Ltd. 2 ITA No. 4063/MUM/2024
The learned Commissioner of Income Tax erred in confirming in The learned Commissioner of Income Tax erred in confirming in The learned Commissioner of Income Tax erred in confirming in action of the Assessing Officer not granting deduction of Rs. of the Assessing Officer not granting deduction of Rs. of the Assessing Officer not granting deduction of Rs. 1,98,57,246/ 1,98,57,246/- under sec. 43B of the Act even though under sec. 43B of the Act even though disallowed in the past assessment period. disallowed in the past assessment period.
3. The learned Commissioner of Income Tax erred in confirming in The learned Commissioner of Income Tax erred in confirming in The learned Commissioner of Income Tax erred in confirming in action of the Assessing Officer in taxing th action of the Assessing Officer in taxing the income of Rs. e income of Rs. 7,43,211/ 7,43,211/- under the head business profits even though under the head business profits even though offered to tax under other heads offered to tax under other heads 4. The learned Commissioner of Income Tax erred in confirming in The learned Commissioner of Income Tax erred in confirming in The learned Commissioner of Income Tax erred in confirming in action of the Assessing Officer in taxing exempt income of Rs. action of the Assessing Officer in taxing exempt income of Rs. action of the Assessing Officer in taxing exempt income of Rs. 1,69,944/ 1,69,944/- credited to profit and loss account. 2. Briefly stated, facts of the case are that the assessee filed Briefly stated, facts of the case are that the assessee filed Briefly stated, facts of the case are that the assessee filed return of income on 28.11.2018 declaring total income at return of income on 28.11.2018 declaring total income at return of income on 28.11.2018 declaring total income at Rs.15,69,25,560/- which was further revised to Rs.14,83,15,740/ which was further revised to Rs.14,83,15,740/ which was further revised to Rs.14,83,15,740/- on 30.03.2019. The return of income filed by the assessee was on 30.03.2019. The return of income filed by the on 30.03.2019. The return of income filed by the processed and intimation u/s 143(1) of the Income processed and intimation u/s 143(1) of the Income-tax Act, 1961 (in tax Act, 1961 (in short ‘the Act’) was issued issued wherein certain adjustment wherein certain adjustments were made. Subsequently, the return of income filed by the assessee was Subsequently, the return of income filed by the assessee was Subsequently, the return of income filed by the assessee was selected for scrutiny and assessment u/s 143(3 selected for scrutiny and assessment u/s 143(3) of the Act was ) of the Act was completed wherein the Assessing Officer noted that the assessee did completed wherein the Assessing Officer noted that the assessee did completed wherein the Assessing Officer noted that the assessee did not furnish any suo moto suo moto submission with regard to adjustment submission with regard to adjustment made by the Central Processing Centre (CPC) in the intimation u/s made by the Central Processing Centre (CPC) in the intimation u/s made by the Central Processing Centre (CPC) in the intimation u/s 143(1) of the Act and therefore, same was not altered and for the 143(1) of the Act and therefore, same was not altered and for the 143(1) of the Act and therefore, same was not altered and for the purpose of the computation the income purpose of the computation the income, the income , the income which was assessed u/s 143(1) of the assessed u/s 143(1) of the Act, was taken in place of the income was taken in place of the income filed in the return of income. The assessee did not prefer any appeal filed in the return of income. The assessee did not prefer any appeal filed in the return of income. The assessee did not prefer any appeal against the order u/s 143(1) of the Act and filed appeal against the against the order u/s 143(1) of the Act and filed appeal against the against the order u/s 143(1) of the Act and filed appeal against the order u/s 143(3) of the Act before the Ld. CIT(A) and challenged the order u/s 143(3) of the Act before the Ld. CIT(A) and challenged the order u/s 143(3) of the Act before the Ld. CIT(A) and challenged the adjustment which were made u/s 143(1) of the Act. The Ld. CIT(A) t which were made u/s 143(1) of the Act. The Ld. CIT(A) t which were made u/s 143(1) of the Act. The Ld. CIT(A) however rejected the grounds raised by the assessee and dismissed however rejected the grounds raised by the assessee and dismissed however rejected the grounds raised by the assessee and dismissed
IMA PD India Pvt. Ltd. 3 the appeal as infructuous holding that the addition does not the appeal as infructuous holding that the addition does not the appeal as infructuous holding that the addition does not emanate from the impugned from the impugned assessment order passed u/s 143(3) of assessment order passed u/s 143(3) of the Act.
Before us, the Ld. counsel for the assessee submitted that Before us, the Ld. counsel for the assessee submitted that Before us, the Ld. counsel for the assessee submitted that when regular assessment was completed the relevant intimation when regular assessment was completed the relevant intimation when regular assessment was completed the relevant intimation issued u/s 143(1) of the Act got automatically merged with the issued u/s 143(1) of the Act got automatically merged with the issued u/s 143(1) of the Act got automatically merged with the assessment order passed u/s 143(3) of the Act and therefore, the assessment order passed u/s 143(3) of the Act and therefore, the assessment order passed u/s 143(3) of the Act and therefore, the intimation looses it is relevance once the regular assessment is imation looses it is relevance once the regular assessment is imation looses it is relevance once the regular assessment is processed as the intimation processed as the intimation is merely towards the accuracy of the of accuracy of the of the information submitted by the assessee. The Ld. counsel the information submitted by the assessee. The Ld. counsel the information submitted by the assessee. The Ld. counsel submitted that validity of the intimation issued u/s 143(1) of the submitted that validity of the intimation issued u/s 143(1) of the submitted that validity of the intimation issued u/s 143(1) of the of arithmetic accuracy of claims Act is limited to correctness correctness of arithmetic accuracy of claims declared in the return of income and accuracy based on the declared in the return of income and accuracy based on the declared in the return of income and accuracy based on the information submitted along with return of income and it does not information submitted along with return of income and it does not information submitted along with return of income and it does not carry the legitimacy of an assessment. The Ld. counsel relied on the carry the legitimacy of an assessment. The Ld. counsel relied on th carry the legitimacy of an assessment. The Ld. counsel relied on th decision of the Co-ordinate Bench of the Tribunal in the case of The ordinate Bench of the Tribunal in the case of The ordinate Bench of the Tribunal in the case of The South India Club v. ITO Ward Exemption (2)(3), New Delhi in ITA South India Club v. ITO Ward Exemption (2)(3), New Delhi in ITA South India Club v. ITO Ward Exemption (2)(3), New Delhi in pronounced on 22.05.2024. The Ld. counsel also No. 354/Del/2024 pronounced on 22.05.2024. The Ld. counsel also No. 354/Del/2024 pronounced on 22.05.2024. The Ld. counsel also alternatively submitted that if the assessee is advised to file an alternatively submitted that if the assessee is advised t alternatively submitted that if the assessee is advised t appeal against the intimation u/s 143(1) of the Act, then any appeal against the intimation u/s 143(1) of the Act appeal against the intimation u/s 143(1) of the Act condonation for delay in filing appeal against said order might be condonation for delay in filing appeal against said or condonation for delay in filing appeal against said or liberally allowed, as the assessee was s the assessee was under bona fide believe that bona fide believe that appeal did not lie against the order passed u/s 1 appeal did not lie against the order passed u/s 143(1) of the Act 43(1) of the Act, particularly, when the order u/s 143(3) of the Act is passed after when the order u/s 143(3) of the Act is passed after when the order u/s 143(3) of the Act is passed after
IMA PD India Pvt. Ltd. 4 making appropriate inquiry and after due discussion and making appropriate inquiry and after due discussion and making appropriate inquiry and after due discussion and adjudication of the issue of in the assessment proceedings. adjudication of the issue of in the assessment proceedings. adjudication of the issue of in the assessment proceedings.
We have heard rival submission of the parties and p We have heard rival submission of the parties and p We have heard rival submission of the parties and perused the relevant material on record. In the case of the assessee the relevant material on record. In the case of the assessee the relevant material on record. In the case of the assessee the Assessing Officer has made adjustment to the returned income in Assessing Officer has made adjustment to the returned income in Assessing Officer has made adjustment to the returned income in the order u/s 143(1) of the Act which is appealable before the Ld. the order u/s 143(1) of the Act which is appealable before the Ld. the order u/s 143(1) of the Act which is appealable before the Ld. /246A during relevant First Appellate Authority as per section First Appellate Authority as per section 246/246A dur period, but the assessee did not prefer any appeal against said but the assessee did not prefer any appeal against said but the assessee did not prefer any appeal against said intimation order. Subsequently, the return was selected for scrutiny intimation order. Subsequently, the return was selected for scrutiny intimation order. Subsequently, the return was selected for scrutiny and assessment u/s 143(3) of the Act was completed. The assessee and assessment u/s 143(3) of the Act was completed. The assessee and assessment u/s 143(3) of the Act was completed. The assessee preferred appeal against order u/s 143(3) of preferred appeal against order u/s 143(3) of the Act and challenged the Act and challenged which were made in the order u/s 143(1) of the the adjustments, which were made in the order u/s 143(1) of the which were made in the order u/s 143(1) of the Act. Before us, the Ld. counsel for the assessee has relied on the Act. Before us, the Ld. counsel for the assessee has relied on the Act. Before us, the Ld. counsel for the assessee has relied on the decision of the Co-ordinate Bench of the Tribunal in the case ordinate Bench of the Tribunal in the case ordinate Bench of the Tribunal in the case of South India Club (supra) South India Club (supra). In the said case under the intimation d case under the intimation u/s 143(1) of the Act exemption was disallowed for non filing of u/s 143(1) of the Act exemption was disallowed for u/s 143(1) of the Act exemption was disallowed for information in prescribed form. The return of income was prescribed form. The return of income was prescribed form. The return of income was subsequently selected for scrutiny subsequently selected for scrutiny and the claim of exemption u/s and the claim of exemption u/s 11 was examined on merit and thereafter 11 was examined on merit and thereafter same was disallowed. In same was disallowed. In the said case, the appeal against intimation was held to be the said case, the appeal against intimation was held to be the said case, the appeal against intimation was held to be infructuous as the issue of exemption was examined under the infructuous as the issue of exemption was examined under the infructuous as the issue of exemption was examined under the scrutiny proceedings and disallowed on merit. In our opinion facts scrutiny proceedings and disallowed on merit. In our opinion facts scrutiny proceedings and disallowed on merit. In our opinion facts of the said case are not applicable in the c of the said case are not applicable in the case of the assessee as in ase of the assessee as in the case the adjustment made u/s 143(1) of the Act have not been the case the adjustment made u/s 143(1) of the Act have not been the case the adjustment made u/s 143(1) of the Act have not been IMA PD India Pvt. Ltd. 5 examined during the scrutiny proceedings u/s 143(3) of the Act by examined during the scrutiny proceedings u/s 143(3) of the Act by examined during the scrutiny proceedings u/s 143(3) of the Act by the Assessing Officer and therefore, the Ld. CIT(A) has rightly the Assessing Officer and therefore, the Ld. CIT(A) has rightly the Assessing Officer and therefore, the Ld. CIT(A) has rightly dismissed the grounds of appeal of dismissed the grounds of appeal of the assessee holding that the the assessee holding that the addition disputed in the grounds raised are not emanating from the addition disputed in the grounds raised are not emanating from the addition disputed in the grounds raised are not emanating from the assessment order whic assessment order which was challenged before him. Thu h was challenged before him. Thus, ground of appeal of the assessee is accordingly dismissed. of appeal of the assessee is accordingly dismissed.
file an appeal against the 4.1 However, the assessee is it liberty to However, the assessee is it liberty to file an appeal against the order u/s 143(1) of the Act before the Ld. First Appellate Authority. order u/s 143(1) of the Act before the Ld. First Appellate Authority. order u/s 143(1) of the Act before the Ld. First Appellate Authority. As far as the issue of the condonation for delay is concerned, the As far as the issue of the condonation for delay is concerned, the As far as the issue of the condonation for delay is concerned, the assessee may file its explanation for the delay in filing appeal, assessee may file its explanation for the delay in filing appeal assessee may file its explanation for the delay in filing appeal which may be considered by which may be considered by the Ld. First Appellate Authority in the Ld. First Appellate Authority in accordance with law. accordance with law.
In the result, the appeal of the assessee is dismissed. In the result, the appeal of the assessee is dismissed. In the result, the appeal of the assessee is dismissed.