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Facts
The assessee filed its return of income in ITR-7 instead of ITR-5, as it lacked registration under Section 12AA of the Income Tax Act, 1961. The return was processed under Section 143(1) of the Act, denying the application of income. The initial appeal before the CIT(A) was dismissed due to a six-year delay.
Held
The Tribunal noted that while a wrong return was filed, the intimation under Section 143(1) made adjustments not permissible under the Act. The CPC disallowed the expenditure claimed, which is not an allowed adjustment under Section 143(1). Therefore, the intimation was deemed unsubstantive.
Key Issues
Whether the intimation issued under Section 143(1) of the Act making adjustments not permissible under the said section is valid, especially when the assessee filed a wrong return but the CPC accepted the assessee's status.
Sections Cited
12AA, 143(1), 144
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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI MADHUSUDAN SAWDIA
Assessee represented by Shri Mohit Sheth, A.R. Department represented by Shri Sanjib Banerjee, Sr.DR Date of hearing 24/02/2026 Date of pronouncement 24/02/2026 O R D E R PER: BENCH 1. This is an appeal filed by the assessee against the order of the ld. Addl./JCIT(A), Panchkula in Appeal No. NFAC/2013-14/10117794 dated 26/03/2024 for the A.Y. 2014-15.
Shri Mohit Sheth, ld. A.R. appeared on behalf of the assessee and Shri Sanjib Banerjee, Sr.DR represented on behalf of the revenue.
It was submitted by the ld. AR that the assessee for the A.Y. 2014-15 had filed its return of income in ITR-7 on 31/03/2016. It was the submission that the assessee did not have registration under Section 12AA of the Income Tax Act, 1961 (in short, the Act) and the assessee was liable to file its return of income in ITR-5. It was the submission that the return filed by the assessee was processed as an intimation Shree Shirdi Saibaba Seva Charitable Trust Vs ITO under Section 143(1) of the Act came to be issued on 22/10/2016 wherein the application of the income of the assessee has been denied. It was the submission that this is not an adjustment which is permissible in the intimation under Section 143(1) of the Act. It was the prayer that the intimation as issued may be quashed.
In reply, the ld. Sr.DR for the revenue submitted that the appeal before the ld. Addl./JCIT(A) was dismissed on account of six years delay in filing appeal. It was the submission that the order of the ld. Addl./JCIT(A) dismissing the appeal of the assessee on account of delay is liable to be upheld.
We have considered the rival submissions. It is trite law that when substantial justice is pitted against technicality such as limitation, it is always better to follow the principles of adjudicating in respect of the substantial justice. The facts in the present case clearly shows that the intimation has been issued by making adjustment which has not permissible in the provisions of Section 143(1) of the Act. Admittedly, a wrong return has been filed by the assessee. The return under which the assessee ought to have filed his ITR. Perusal of the intimation also shows that the CPC has accepted the status of the assessee. The CPC has only disallowed the expenditure claimed. This admittedly, is not an adjustment which is permissible under the provisions of Section 143(1) of the Act. This being so, the intimation as issued by the CPC under Section 144 of the Act is found to be un-substantive and consequently, stands quashed.