COFORGE LIMITED,NEW DELHI vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4(2), DELHI, NEW DELHI

These cross appeals are filed by the assessee and Revenue against the order of ld. Addl/JCIT, Madurai [“ld. JCIT(A)”, for short] dated 06.08.2024 for Assessment Year 2021-22. 2. Since the issues are common and the appeals are connected, hence the same are heard together and being disposed off by this common order. 3. Brief facts of the case are, assessee is a public sector limited listed company engaged in the business of offering global IT solutions. Assessee filed its return of income for AY 2021-22 declaring an income of Rs.99,75,29,520/- under normal provisions and claimed a refund of Rs.9,40,68,840/-. A notice dated 04.07.2022 was issued to the assessee proposing adjustment in terms of First Proviso to section 143(1)(a) of the Income-tax Act, 1961 (for short ‘the Act’) and the assessee filed its response. The intimation order passed u/s 143(1) dated 17.10.2022 was passed by making an adjustment relating to disallowance u/s 80M and addition of GST refund on account of mis-match reported in the tax audit report. 4. Aggrieved with the above order, assessee preferred an appeal before the ld. Addl/JCIT(A), Madurai and separate grounds were raised as well as detailed submissions were submitted in the form of written submissions which are reproduced at pages 5 to 16 of the appellate order. After considering the detailed submissions of the assessee, ld. CIT (A) not adjudicated the issue raised by the assessee on intimation passed u/s 143(1) of the Act which is bad in law and void ab initio for the reason that additions made by the Assessing Officer are debatable. However, he proceeded to give partial relief on the issue of GST mis-match. 5. Aggrieved with the above order, both assessee as well as Revenue are in appeal before us. 6. At the time of hearing, ld. AR of the assessee raised the issue of juri iction that the additions proposed by the Assessing Officer u/s 143(1) is beyond its juri iction and also computed the assessment without considering the objections made by the assessee on the provisions of section 143(1)(a) of the Act. 7. First let us deal with the issue raised by the assessee on the provisions of section 143(1) of the Act. At the time of hearing, ld. AR submitted that the scope of adjustments permissible under section 143(1) of the Act, it is respectfully submitted, is restricted only to processing of the return to determine the total income/ loss after making certain "adjustments" as specified in sub-clauses (i) to (vi) thereto. He submitted that in the present case, the adjustments under dispute, being (i) disallowance of deduction claimed under section 80M; and (ii) addition of GST refund on account of mis-match in ITR vis-a-vis TAR, it is respectfully submitted, do not fall within any of the sub-clause/permissible adjustments specified under section 143(1)(a) of the Act as demonstrated under:

Ld. AR further submitted that it will thus be appreciated that both the adjustments under consideration in the present appeal do not fall within the scope of adjustments permissible under section 143(1)(a) of the Act. and in view of the aforesaid and without anything further, the intimation dated 17.10.20 2 seeking to make adjustments to the income of the appellant, being beyond the scope of permissible adjustments, is illegal and bad-in-law and calls for the quashed. He further submitted that strictly without prejudice to for the following reasons: (a) The adjustment under section 80M of the Act has been made without assigning any reason! specifying the rationale behind making such adjustment, let alone specifying the clause under which such adjustment has been made;

He submitted that for the reasons cumulatively discussed supra, the impugned intimation dated 17.10.2022 issued under section 143(1) of the Act is without juri iction, having been passed in blatant violation of principles of natural justice and calls for being quashed as illegal. 10. On the other hand, ld. DR of the Revenue submitted that the issue raised by the assessee relating to intimation passed u/s 143(1), submitted that the regular assessment was completed u/s 143(3) and assessee should have raised this issue before the Assessing Officer. He submitted that ld. JCIT (A) has rightly dismissed this ground. Further he submitted that ld. CIT (A) has given relief to the assessee without collecting the information from the lower authorities, therefore, these issues cannot be raised against the order passed u/s 143(1) particularly when regular assessment u/s 143(3) was already completed. He relied on the order passed u/s 143(3) of the Act. 11. Considered the rival submissions and material placed on record. We observe that intimation u/s 143(1) was passed by proposing two disallowances relating to claim of deduction u/s 80M and mis-match of refund of GST as reported in tax audit report. We observe that assessee has already filed an objection against the above proposed disallowances. However, AO has not considered the same nor given any opportunity to the assessee before passing the above intimation order. Further we observe that the proposed additions are not falling in any of the clauses mentioned u/s 143(1)(a) of the Act. Therefore, proposing any addition which is outside the provisions of section 143(1)(a) is bad in law and outside the juri iction of provisions of section 143(1)(a) of the Act. It is settled position of law under section 143(1) of the Act that it is restricted to arithmetical errors or an incorrect claim apparent from the record and not otherwise. The debatable issues are outside the purview of section 143(1)(a) of the Act. We observe that similar issue was considered by Hon’ble Delhi High Court in the case of Easter Industries Ltd. vs. UOI (supra) wherein it is held as under :- “ The Assessing Officer under section 143(1)(1) of the Income-tax Act, 1961, in the assessee’s return of income for the assessment year 1989-90, made three adjustments in respect of scientific research expenses of Rs.82,310, club payments Rs.2,577 and under section 43B Rs.16,69,470, totaling Rs.17,54,357. On a writ petition challenging the three adjustments :

Respectfully following the above decision, we are inclined to allow Ground No.1 raised by the assessee that the impugned intimation dated 17.10.2022 passed u/s 143(1) of the Act is without juri iction. Accordingly, the same is quashed and the appeal filed by the assessee is allowed. 13. In the result, the appeal filed by the assessee being ITA No.4333/Del/2024 is allowed. 14. Since we have already quashed the intimation passed u/s 143(1) of the Act, the appeal filed by the Revenue being ITA No.4659/Del/2024 also deserves to be dismissed. 15. To sup up : the appeal filed by the assessee is allowed and the appeal filed by the Revenue is dismissed. Order pronounced in the open court on this 30th day of September, 2025. (SATBEER SINGH GODARA) ACCOUNTANT MEMBER