CPC cannot continue to rectify and re-rectify the intimation under Section 143(1)(a) repeatedly.
In a recent judgment Delhi High Court has held that CPC cannot continue to rectify and re-rectify the intimation under Section 143(1)(a) repeatedly.
ABCAUS Case Law Citation:
4569 (2025) (05) abcaus.in HC
In the instant case, the Petitioner assessee had challenged the notice issued under Section 154 of the Income Tax Act, 1961 (the Act) along with the order under Section 154 of the Act, passed pursuant to the impugned notice.
The petitioner had filed his return of income for the relevant Assessment Year claiming a refund. The said return was processed by Central Processing Centre (CPC) Bengaluru under Section 143(1)(a) of the Act. An intimation was issued alongwith the intimation of refund which was also credited in the bank account of the assessee.
However, within fifteen months, the Assistant Director of Income Tax, CPC, suo moto rectified the intimation under Section 154 of the Act and enhanced the chargeable income by disallowing certain deductions claimed under Section 36(1)(va) of the Act, without affording the petitioner any opportunity of being heard.
The petitioner challenged the said decision by filing an appeal before the Commissioner of Income Tax (Appeals).
The CIT(A), by an appellate order allowed the appeal and set aside the rectification order on the ground that the said order was passed without issuance of any notice to the petitioner. However, thereafter, the Assistant Commissioner of Income Tax, CPC issued the impugned notice and passed the impugned order under Section 154 of the Act, once again enhancing the income declared by the Assessee by rectifying the earlier intimation issued under Section 143(1)(a) of the Act.
Before the Hon’ble High Court It was the petitioner’s case that the CPC could not proceed with the rectification after the CIT(A) had set aside the said rectification order. The High Court however rejected this argument and opined that the petitioner’s challenge before the CIT(A) was on the ground that the rectification was carried out without issuance of any notice and without affording the petitioner any opportunity to be heard. The impugned order was passed after affording the petitioner an opportunity of being heard, and therefore, the grounds on which the earlier decision had been set aside, stood addressed.
However, the Hon’ble High Court observed that it was also the case of the Petitioner that while his appeal before the CIT(A) was pending, it had also filed a rectification application before the CPC against the intimation enhancing its income. The petitioner succeeded in this application, and, the CPC had passed a rectification order, rectifying the intimation under Section 143(1)(a) by accepting the returned income.
The Hon’ble High Court opined that the CPC cannot continue to rectify and re-rectify the intimation under Section 143(1)(a) repeatedly and this aspect had not been considered by the ACIT while passing the impugned order.
The Revenue submitted that this fact was not brought to the notice of the CPC and, therefore, the matter ought to be remanded to the ACIT, CPC.
In view of the above, the Hon’ble High Court set aside the impugned order and remanded the matter to the ACIT, CPC to consider the matter afresh.
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