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Facts
The assessee filed an appeal against the order of the NFAC/CIT(A) which upheld the assessment order. The assessment order was based on an intimation under section 143(1) of the Income Tax Act, not a regular assessment order under section 143(3). The assessee had also filed a rectification application under section 154 regarding the intimation, which was pending.
Held
The Tribunal held that the cause of action for the appeal arises from the intimation under section 143(1) and not from the assessment order under section 143(3) which merely adopted the figures from the intimation. The appeal should have been filed against the 143(1) intimation.
Key Issues
Whether the appeal filed against the assessment order under section 143(3) is maintainable when the cause of action arises from the intimation under section 143(1).
Sections Cited
143(1), 143(3), 154, 246A
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Income Tax Appellate Tribunal, JODHPUR BENCH (Virtual
Before: SHRI LALIET KUMAR, HONBLE & DR. MITHA LAL MEENA, HONBLE
The Captioned appeal is filed by the assessee against the order of the Ld. National Faceless Appeal Centre [Hereinafter referred to as the "NFAC/CIT (A)"], dated 19/08/2024 with respect of Assessment Year: 2022-23 which emanated from the assessment order passed u/s 143(3) dated 28/02/2024 by AO, Assessment Unit, NFAC.
The appellant has raised the following grounds:
That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in upholding the legality & validity of order passed by the Ld AO.
That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in not appreciating the apparent & real facts of the case in right perspective and judicious manner and recorded arbitrary & factually contrary observations while deciding the appeal of assessee.
That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in denying to consider the technical or arithmetical mistake committed by the Ld AO while giving effect of assessment order passed u/s 143(3) in computation of income.
That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in upholding the action of Ld AO for not allowing set off of brought forward capital loss of Rs. 13,01,585/- in the computation sheet.
That on the facts and in the circumstances of the case the Ld CIT(A) ought to have allowed the set off benefit of brought forward loss particularly the same has been accepted as genuine in the assessment order passed by the Ld AO.
That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in upholding the rejection of TDS credit of Rs. 46664/- claimed by the assessee and also allowable as per law.
That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in recording the findings which are contrary to material record and also against the principle of natural justice. The grounds raised by the appellant are inter-linked to each other where it has challenged the confirmation of disallowance of brought forward capital loss of Rs. 13,01,585/- and TDS Credit of Rs. 46,662/- in the computation of income.
We have heard both the sides and perused material on record. From the impugned order, it is seen that the learned JCIT (A) rejected the appeal qua the assessee by observing vide para5, as under:
Decision: I have carefully considered the appellate documents, submissions filed, and order passed by the Ld.AO-NaFAC. For the appellate year under consideration, ROI was selected for scrutiny under CASS on the issue of 'Large short term capital gains declared u/s 11 IA and First Year of Deduction claimed u/s 801A/801AB/801AC/801BA'. Ld.AO-NaFAC reached following finding after verification of the issue-
4 Reasons for inference drawn that no variation is required on this issue- On perusal of the details/explanation /submission and documents alongwith details of expenses given made by the assessee, the issues are found explained by the assessee and reply of the assessee is found acceptable and no adverse inference may be drawn on this issue. Accordingly, Return income of the assessee shown in [TR for A. Y. 2022- 23 is accepted. It is seen from the perusal of the return filed that the total income has been returned at Rs. 8,64,92,520/- similarly in order passed under section 143 rws 143(3A) & 143(3B) of ITA 1961 after due verification at his end, total income of Rs.8,64,92,520 under 143(1)(a) has been accepted by the Ld.AO-NaFAC. It is seen from the perusal of the assessment order that there is no independent discussion on the issues raised by the appellant. Order just has relied on the adjustment made and demand raised by the CPC. The cause of action lies against the order passed under section 143(1) of ITA 1961. A similar issue came up before the Hon'ble ITAT Bengaluru Bench in the case of M/s. Areca Trust vs CIT(A) NFAC in ITA No 433/Bang/2023 dated 26/07/2023. The relevant extract is reproduced as follows for ready reference- '
Section 246A specifically provides for an appeal as against intimation issued under section 143(1) of the Act. In the instant case, total income has been assessed at Rs.23,29, 62,420/- as per the intimation passed under section 143(1) of the Act. Therefore, the cause of action for the assessee arises from the intimation issued under section 143(1) of the Act and appeal ought to have been filed as against the same. The assessment completed under section 143(3) of the Act merely adopts the assessed figures in the intimation order passed under section 143(3) of the Act. Therefore, no cause of action arises from the order passed under section 143(3) of the Act.
Section 143(4) of the Act only mentions that on completion of regular assessment under section 143(3) dr 144 of the Act, the tax paid by assessee under section 143(1) of the Act shall be deemed to have been paid toward such regular assessment. That by itself does not mean there is merger of intimation under section 143(1) with that of regular assessment under section 143(3) / 144 (unless issue has been discussed and adjudicated in regular assessment under section 143(3) / 144 of the Act). Assessee, against the intimation under section 143(1) of the Act, has filed a rectification application under section 154 of the Act (vide application dated 16.06.2020) and the same is pending disposal. The CIT(A) in the impugned order has directed the AO to dispose off the said rectification application dated 16.06.2020. Moreover, if assessee is advised to file an appeal as against the intimation under section 143(1) of the Act, a liberal approach may be taken for condonation of delay since assessee's application for rectification of the intimation under section 143(1) of the Act has been filed within time and same is pending disposal. With the above said observation, the grounds of the assessee are rejected. '
On perusal of the return filed by the assessee, it is evident that the total income has been returned at Rs. 8,64,92,520/- and similarly in order passed under section 143 rws 143(3A) & 143(3B) of ITA 1961, the AO/NFAC after due verification at his end, accepted the total income of Rs.8,64,92,520 under 143(1)(a) of the act. It is noted that in the assessment order u/s 143(3), the AO has just relied on the adjustment made and demand raised by the CPC. Meaning thereby that the cause of action lies against the order passed under section 143(1) of IT Act 1961. The Ld. CIT(A)/NFAC has rightly followed the decision given on similar issue by the Hon'ble ITAT Bengaluru Bench in the case of M/s. Areca Trust vs CIT(A) NFAC in ITA No 433/Bang/2023 dated 26/07/2023. 6. Since in the assessment completed under section 143(3) of the Act, the AO has merely adopted the assessed figures in the intimation order passed under section 143(1) of the Act. Therefore, no cause of action arises from the order passed under section 143(3) of the Act. Therefore, the Ld. NFAC/CIT (A) has been justified in observing that the cause of action for the assessee arises from the intimation issued under section 143(1) of the Act and appeal ought to have been filed as against the same.
It is also noted that the Assessee has filed a rectification application under section 154 of the Act, vide application dated 16.06.2020, against the intimation under section 143(1) of the Act, and the same is pending disposal and the Ld. CIT(A) in the impugned order has already directed the AO to dispose off the said rectification application and the assessee is advised to file an appeal as against the intimation under section 143(1) of the Act, with a liberal approach to condone delay since assessee's application for rectification of the intimation under section 143(1) of the Act has been filed within time and same is pending disposal. We do not find any merit and substance in the ground of the appeal raised by the assessee because the issue are neither arising out of the impugned order or the assessment order passed u/s 143(3) of the Act. We appreciate the detailed and a judicious order passed by the Ld. CIT(A). Thus, all the grounds are rejected.
Thus, we find no infirmity or perversity in the impugned order and according, we uphold the decision of the Ld. CIT (A)/NFAC.
In the result, the appeal of the assessee is dismissed. Order pronounced on...30/.../...../2025 in the open court. - (LALIET KUMAR) JUDICIAL MEMBER Doc* Dated: 3.0/10/2025 Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File (DR. MITHA LAL MEENA) ACCOUNTANT MEMBER By Oder