What did the High Court hold?

The High Court set aside the intimation under Section 143(1) because no notice regarding adjustments was issued to the assessee. The matter was remitted to the respondent to redo the proceedings concerning adjustments.

The petitioner sought to quash an intimation under Section 143(1) of the IT Act. The petitioner claimed entitlement to deductions under Section 43(A) and argued that no prior notice was given for adjustments made in the intimation.

What were the issues?

Whether adjustments can be made under Section 143(1) without providing prior intimation to the assessee, and whether deductions under Section 43(A) were correctly considered.

Bhadra Paper Mills Limited vs Assistant Director of Income Tax | Karnataka High Court 2022

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 9TH DAY OF FEBRUARY, 2022

BEFORE

THE HON'BLE MR. JUSTICE S. SUNIL DUTT YADAV

WRIT PETITION NO.1844 OF 2022 (T - IT)

BETWEEN:

Bhadra Paper Mills Limited, No.23/14, Jala Shambhavai Complex, I main Road, Bangalore North, Bangalore-560009. Rep. by its Managing Director, Sri. Madesh Lakshman. … Petitioner (By Sri.M.V.Sheshachala, Senior Advocate for Sri. Aravind V Chavan, Adv. for petitioner)

AND:

Assistant Director of Income Tax,

Central Processing Centre,

Queens Road,

Bangalore-560001.

Principal Director of Income Tax,

Central Processing Centre,

Queens Road,

Bangalore-560001.

...Respondents (By Sri.K.V.Aravind, Advocate)

2 ***** This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the intimation under section 143(1) of the IT Act dated 06.08.2021 Annexure-D passed by the R-1 for AY 2020-21 and etc.

This Writ Petition coming on for Orders, this day, the Court made the following:

O R D E R

The petitioner has sought for issuance of writ of certiorari to quash the intimation under Section 143(1) of the Income Tax Act dated 06.08.2021 at Annexure-D passed by respondent No.1 for the Assessment Year 2020-21.

Learned Senior Counsel appearing for the petitioner would contend that petitioner is entitled for addition / deduction as regards to the payments made in terms of 1st proviso to Section 43(A). It is further submitted that under 1st proviso to Section 143(1), adjustments are not to be made unless an intimation given to the assessee

3 for such adjustments and that no such notice regarding the addition has been made.

It is further submitted that once any intimation is made under 1st proviso to Section 143(1), petitioner would put forth his responses, which shall be considered while making adjustments in terms of 2nd proviso.

Learned Senior Counsel for the petitioner submits that time for filing the return has been extended from 30.10.2020 to 28.02.2021, which aspect also needs to be taken note of while considering the deductions that the petitioner is entitled to under 1st proviso of Section 43(A).

Without entering into the merits of the matter, in light of the I proviso to Section 143(1), as it is the assertion of the petitioner that no notice regarding adjustments has been issued under Section 143(1), the intimation at Annexure-D is set aside. Matter is remitted to the respondent No.1 to redo the proceedings insofar as

4 adjustments is concerned in light of 1st proviso to Section 143(1).

Accordingly, the petition is disposed off.

Sd/- JUDGE

BHADRA PAPER MILLS LIMITED vs. ASSISTANT DIRECTOR OF INCOME TAX

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