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Facts
The assessee appealed against the CIT(A)'s order dismissing their appeal, which had challenged an intimation under Section 143(1) of the Income Tax Act. The CIT(A) held that the appeal was not maintainable as the Section 143(1) intimation merged with the subsequent assessment order under Section 143(3).
Held
The Tribunal held that if the Assessing Officer merely adopted the income as assessed in the Section 143(1) intimation in the Section 143(3) assessment order without independent discussion or adjudication, the intimation does not merge with the assessment order. Therefore, a separate appeal against the intimation remains maintainable.
Key Issues
Whether an appeal against an intimation under Section 143(1) is maintainable when a regular assessment under Section 143(3) has also been made, and if the former merges with the latter.
Sections Cited
143(1), 143(3), 143(4), 246A, 154
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Income Tax Appellate Tribunal, DELHI BENCH “G” NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI M BALAGANESH
सुनवाईक�तारीख/ Date of hearing: 27.08.2025 12.11.2025 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R PER C.N. PRASAD, J.M.
This appeal is filed by the Assessee against the order of the Ld. Addl./JCIT (Appeals)-2, Bangalore dated 10.01.2025 for the AY 2018- 19 in dismissing the appeal of the assessee holding that the order passed u/s 143(1) is merged with the regular assessment made u/s 143(3) of the Act and therefore the intimation does not have legs to 1 initiated and the appeal against the intimation/order u/s 143(1) of the Act became infructuous.
Ld. Counsel for the assessee submitted that the present appeal arises from the order of the Ld. CIT(A), whereby the appeal filed by the assessee against the intimation passed u/s 143(1) of the Act was dismissed. The CIT(A) has proceeded on the reasoning that once the matter was taken up for scrutiny and a regular assessment order u/s 143(3) has been framed, the intimation passed u/s 143(1) gets merged with the assessment order u/s 143(3), and therefore, no separate appeal against the order u/s 143(1) lies. In doing so, reliance has been placed on the decision of the ITAT Delhi in the case of South India Club vs. ITO.
Ld. Counsel submitted that the said decision is distinguishable on facts and is applicable only in cases where, while framing assessment u/s 143(3), the Assessing Officer has discussed, analyzed, and adjudicated upon the very issues which were the subject matter of adjustment u/s 143(1). However, where the Assessing Officer, while passing the order u/s 143(3), has merely adopted the income as assessed u/s 143(1), without examining or adjudicating upon the adjustment made by CPC in the intimation, then in such a situation, 2 u/s 143(1), and the CIT(A) is duty bound to adjudicate upon those issues.
Ld. Counsel placed reliance on the decision of the ITAT Bangalore Bench in the case of M/s Areca Trust vs.CIT(A) in where a similar issue had arisen. In that case, the assessee had not filed an appeal against the intimation passed u/s 143(1) and instead had raised the issue in the appeal against the regular assessment order passed u/s 143(3). The Tribunal held that since the Assessing Officer, while passing the order u/s 143(3), had not adjudicated upon the adjustments made u/s 143(1), such issues could not be considered in the appeal against the order u/s 143(3).
The assessee was accordingly granted liberty to file a separate appeal, along with a petition for condonation of delay, against the intimation u/s 143(1).
Ld. Counsel submitted that the facts of the present case are identical. From a perusal of the assessment order passed u/s 143(3), it is evident that the Assessing Officer has not discussed, analyzed, or adjudicated upon the adjustments made by CPC in the intimation u/s 143(1). Instead, the Assessing Officer has simply carried forward the figure of income determined u/s 143(1) into the order u/s 143(3), 3 the appeal against the intimation u/s 143(1) was very much maintainable, and the Ld. CIT(A) erred in dismissing the same on the ground of merger.
5.1 Ld. Counsel further submitted that this position also finds support from the provisions of section 143(4) of the Act, which specifically provides that where a regular assessment is made u/s 143(3), the tax, interest, and demand shall be computed in accordance with the adjustments made u/s 143(1). This clearly indicates that the adjustments made in an intimation u/s 143(1) survive even when a regular assessment order is framed u/s 143(3), unless such adjustments are specifically adjudicated upon in the order u/s 143(3). It is submitted that the issue is further covered in favour of the assessee by subsequent decisions, including the decision of ITAT Chennai in the case of Sun Tex Business Solutions Pvt. Ltd. Vs. DCIT, 2025 (8) TMI 436, and the decision of ITAT Bangalore in the case of Ariba Technologies India Pvt. Ltd. vs. DCIT, 2025 (3) TMI 526, both of which have followed the ratio of the Bangalore Bench decision in Areca Trust (supra).
In view of the above Ld. Counsel respectfully submitted that the order of the Ld. CIT(A) dismissing the appeal as not maintainable 4 the file of the CIT(A) with a direction to adjudicate upon all the issues raised by the assessee in the appeal against the intimation passed by CPC u/s 143(1) of the Act.
On the other hand, Ld. DR strongly supported the orders of the authorities below.
Heard rival submissions, perused the orders of the authorities below. We find considerable merit in the submissions of Ld. Counsel for the assessee. On perusal of the assessment order passed u/s 143(3) dated 11.05.2021 which is placed at pages 246 to 255 reveals that the Assessing Officer started the computation of income with the figure of Rs.139,05,73,030/- which is the income determined by the CPC u/s 143(1) of the Act after making the adjustment. In the assessment order passed u/s 143(3) of the Act there is absolutely no discussion on the addition which was already made in the intimation passed u/s 143(1) of the Act. The additions made in the assessment order passed u/s 143(3) are totally different additions and in the circumstances it cannot be said that the intimation passed u/s 143(1) of the Act is merged with the assessment order passed u/s 143(3) of the Act. We find that more or less similar issue came up for consideration before the ITAT, Bangalore in the case of M/s Arika 5 26.07.2023, wherein the Tribunal held as under:
7. We have heard the rival submissions and perused the material on record. On perusal of the impugned Assessment Order passed u/s 143(3) (order dated 12.02.2021), it is clear that AO has assessed the total income at Rs.23,29,62,420/- solely relying on the adjustment made by the AO/CPC in the intimation made u/s 143(1) of the Act. In the impugned Assessment Order passed u/s 143(3) of the Act, there is no independent discussion as regards the income assessed at Rs.23,29,62,420/-. The relevant portion of the assessment completed u/s 143(3) of the Act dated 12.02.2021 reads as follows: “4. In response to the notice, the assessee responded via e-proceedings and submitted the details called for. Details filed are examined and the income is assessed at Rs.23,29,62,420/- as per 143(1)(a) of the Act.
8. Section 246A specifically provides for an appeal as against intimation issued u/s 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 u/s 143(1) of the Act. Therefore, the cause of action for the assessee arises from the intimation issued u/s 143(1) of the Act and appeal ought to have been filed as against the same. The assessment completed u/s 143(3) of the Act merely adopts the assessed figures in the intimation order passed u/s 143(3) of the Act. Therefore, no cause of action arises from the order passed u/s 143(3) of the Act.
9. Section 143(3) of the Act only mentions that on completion of regular assessment u/s 143(3) or 144 of the Act, the tax paid by assessee u/s 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 u/s 143(1) with that of regular assessment u/s 143(3)/144 (unless issue has been discussed and adjudicated in regular assessment u/s 143(3)/144 of the Act). Assessee, against the intimation u/s 143(1) of the Act, has filed a rectification application u/s 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 of the said rectification application dated 16.06.2020. Moreover, if assessee is advised to file an 6 PAWAN HANS LIMITED, NOIDA appeal as against the intimation u/s 143(1) of the Act, a liberal approach may be taken for condonation of delay since assessee’s application for rectification of the intimation u/s 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.”
Therefore, since the Assessing Officer while passing the assessment order u/s 143(3) of the Act has simply adopted the figure which was assessed in the intimation passed u/s 143(1) of the Act there was no cause of action to contest by the assessee the adjustment which was already made in the intimation passed u/s 143(1) and in such circumstances it cannot be said that the intimation passed u/s 143(1) is merged with the assessment order passed u/s 143(3) of the Act. Thus, we set aside the order of the Ld. Addl./JCIT(Appeals) and restore this appeal to the file of the Ld. Addl./JCIT (Appeals) to decide the appeal on merits.
In the result, the appeal of the Assessee is allowed for statistical purpose.
Order pronounced in the open court on 12.11.2025