TERMOPLAST POLLYPACKS ITALY INDIA PVT. LTD.,TIRUVALLUR vs. THE DCIT, CC-3(1),, CHENNAI

आदेश / O R D E R

PER AMITABH SHUKLA, A.M :

2.0 Brief factual matrix of the case is that the assesse had filed a return of income on 29.03.2019 declaring an income of Rs.9,18,28,516/- Order u/s 143(1) dated 09.11.2020 was passed by the CPC determining the total income of the assesse at Rs. 14,73,70,007/- In the impugned order the CPC made an addition of Rs.2,77,64,495/- as income from other sources as well as denied claim of exemption of even amount.

According to the assesse the CPC has wrongly added the said amount.

It is the case of the assesse that, even though the impugned amount of Rs.2,77,64,495/- was dividend income from foreign company, it had shown it under schedule-EI of the return as exempted income. The assesse admits that the said dividend was uploaded in the EI schedule when actually it had offered under the other sources. Thus according to assesse it was doubly taxed. It has also been brought to the notice that the impugned amount of foreign dividend has been wrongly levied a tax at the rate of 22.5% as against 15% prescribed u/s 115BBD. The AO passed order u/s 143(3) without making any addition. The AO however proceeded to adopt the income of Rs. 14,73,70,007/- as determined u/s 143(1) supra. The assesse is in appeal against the total demand raised consequent to order u/s 143(3) of Rs.2,23,98,723/-. In appeal , the first appellate authority dismissed the appeal by concluding “…it is seen that the appellant has agreed by the order u/s 143(1) dated 09.11.2020 of the Central Processing Centre, wherein CTC has computed total income at Rs.14,73,70,007/- against Rs.9,18,28,516/- returned by the appellant for the AY-2018-19. However, in case of instant appeal, on perusal of Form No.35 dated 09.03.2021, it is seen that the appeal is filed against order u/s 143(3) dated 09.02.2021 wherein no additions have been made by the AO. Hence, it is seen that the grounds of appeal to be adjudicated upon filed in the instant appeal are not emanating from the order u/s 143(3) dated 09.02.2021…”

3.0 Before us the Ld.AR has argued that as per the principles of doctrine of merger the order u/s 143(1) dated 29.03.2019 has merged with the assessment order u/s 143(3) dated 09.02.2021 of the AO and consequently Ld.CIT(A) ought to have adjudicated the grounds contested before it qua order u/s 143(3). It was argued that when the returned income was accepted there was no case for making any addition.

Accordingly, the Ld.AR requested that the order of the Ld.AO demanding tax of Rs.2,23,98,723/- be deleted or else Ld.CIT(A) be directed to readjudicate the matter.

4.0 The Ld.Sr.DR argued that the assesse appeal is non- maintenable in as much as no injury has been caused to the assesse qua order u/s 143(3) dated 09.02.2021 in which no addition has been made.

It was informed that the assesse has itself committed mistake having furnished wrong facts in its return. It was further argued that within the meaning of section 246(1)(a) of the Act order u/s 143(1) is an appealable order and hence the assesse ought to have contested the same which is primarily responsible for generation of the impugned demand.

5.0 We have heard rival submissions in the light of facts of the case and material brought on records. It is an undisputed fact of the case that the assesse itself had committed the mistake of showing the amount of Rs.2,77,64,495/- being dividend income from foreign company, under schedule-EI of the return as exempted income. It is also an undisputed fact of the case that the impugned interference to the assessee’s returned income and the corresponding generation of demand of Rs.2,23,98,723/- has arisen from u/s 143(1) dated 09.11.2020. Section 246 of the income tax act provides that an assesse aggrieved by orders passed by Income Tax Authorities under various sections are entitled to file appeal before the Ld.CIT(A). Section 143(1) is one such section included in section 246(1)(a) and reads as under:..

section (2), any assesse aggrieved by any of the following orders of an Assessing Officer (other than the Deputy Commissioner) may appeal to the Deputy Commissioner (Appeals) 3[before the 1st day of June,

2000] against such order—

(a) an order against the assesse, where the assesse denies his liability to be assessed under this Act 4[or an intimation under sub-section (1) or sub-section (1B) of section 143, where the assesse objects to the making of adjustments,] or any order of assessment under sub- section (3) of section 143 or section 144, where the assesse objects to the amount of income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed.

6.0 Facts of the case discussed above indicates that the assesse was aggrieved by the order u/s 143(1) and hence was eligible to file an appeal against the same before the first appellate authority. The action of the CPC in alleged double taxation and incorrect application of tax rates etc. squarely constituted an event to cause grievance to the assesse. In view of the clear statutory position of section 246(1)(a) above, the hypothesis of doctrine of merger do not arise in this case. We find that the first appellate authority has rightly dismissed the assessee’s appeal as it was not aggrieved by any action of the AO qua order u/s 143(3). The assesse in the right scheme of things should have contested the order u/s 143(1) passed by the CPC on 29.03.2019. We also hold the view that the Tribunal comes to rescue of an assesse only when there is an error in the order of the first appellate authority. The Ld.CIT(A) has rightly concluded that there is no error in the order of the AO and that the grounds of appeal raised before him are not emanating order u/s 143(3). In the instant case no such facts are available on records. Accordingly, all the grounds of appeal raised by the assesse are dismissed. 8.0 In the result the appeal of the assesse is dismissed. Order pronounced on 12th July, 2024 at Chennai.