Challenge to intimation passed u/s 143(1) calls for independent adjudication in terms of statutory dictate of Section 246A(1)(a) of the Income Tax Act – ITAT
In a recent judgment, ITAT has held that CIT(A) erred in non adjudicating challenge to intimation u/s 143(1) making substantial adjustment and challenge to intimation passed u/s 143(1) calls for independent adjudication in terms of statutory dictate of Section 246A(1)(a) of the Income Tax Act.
ABCAUS Case Law Citation:
ABCAUS 4004 (2024) (05) ITAT
Important Case Laws relied upon:
M/s. Areca Trust vs. CIT(A)
In the instant case, the assessee had challenged the order passed by the CIT(A) of National Faceless Appeal Centre (NFAC) in dismissing the appeal against the intimation u/s 143(1) passed by CPC Bangalore making adjustments to the retuned income.
Before the Tribunal the assessee submitted that CIT(A) had declined to adjudicate issues arising from the intimation issued under Section 143(1) of the Act on the ground that the impugned issues arising from the intimation shall be adjudicated based on the merits of the case while deciding the appeal against the regular assessment framed under Section 143(3) of the Act which is also subject matter to appeal.
The assessee referred to the decision rendered by the Co-ordinate Bench to submit that Section 246A specifically provides for an appeal against intimation issued under Section 143(1) of the Act and assessment completed under Section 143(3) of the Act merely adopts the assessed figure in the intimation order passed under Section 143(3) of the Act. Therefore, a clear cause of action is available to the assessee against the order of the CIT(A).
It was submitted that the view taken by the CIT(A) holding the appellate proceedings against the intimation under Section 143(1) making substantial adjustments, is infructuous, was contrary to the present scheme of the Act.
It was urged that the order of the CIT(A) be set aside and restore the matter back to the file of the CIT(A) for adjudication of the grounds raised on merits in accordance with law.
The Tribunal observed that CIT(A) had not examined the grievances raised in the first appeal on merits and dismissed the appeal summarily as infructuous. The Tribunal opined that the approach adopted by the CIT(A) was totally incomprehensible and was clearly opposed to the provisions of the Act.
The Tribunal further observed that while processing the ROI under Section 143(1), the CPC arm of Revenue is competent to make adjustment to the total income on points enumerated in 143(1)(a) of the Act subject to reasonable opportunity to assessee. Hence, as per the process ordained by law, the intimation comprising of adjustments of the nature specified in Section 143(1)(a) carried out after opportunity to assessee acquires the character of assessment on such points.
The Tribunal said that the grievances arising from the intimation passed under Section 143(1) of the Act calls for independent adjudication in terms of statutory dictate of Section 246A(1)(a) of the Act. The Co-ordinate Bench also echoed the similar view.
The Tribunal held that the CIT(A) had misdirected himself in law in dismissing the appeal of the assessee in limine as infructuous.
Accordingly, the impugned order of the CIT(A)-NFAC was thus set aside and the appeal filed by the assessee was restored for fresh adjudication by CIT(A) in accordance with law after giving reasonable opportunity to the assessee.
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