Intimation u/s 143(1) gets merged with order passed u/s 143(3) and looses its force

With passing of order u/s 143(3) intimation u/s 143(1) got merged with the same and independently lost its force – ITAT 

In a recent judgment, ITAT Delhi has held that when order under Section 143(3) is passed by the AO, the order of intimation under Section 143(1) of the Act naturally got merged with the same and the said order independently lost its force.

ABCAUS Case Law Citation:
ABCAUS 4179 (2024) (07) ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) in dismissing the appeal against intimation u/s 143(1) of the Income Tax Act, 1961 (the Act) passed by the Centralized Processing Centre (CPC) Bengaluru.

The appellant’s case was selected for scrutiny under Section 143(3) of the Act and notice under Section 143(2) was issued. Meantime, CPC issued intimation u/s 143(1) of the Act to the appellant assessee inter alia making adjustment under Section 143(1)(a) for cess amount.

Subsequently, assessment was finalized under Section 143(3) r.w.s. 144B of the Act. The solitary addition in the said assessment order was for variation in respect of cess disallowance as made by CPC in its intimation u/s 143(1) of the Act.

The assessee challenged the intimation u/s 143(1) of the Act before the First Appellate Authority. The assessee submitted that he was under bonafide belief that since the assessment proceeding had already been started, all claims and contentions would be examined during the course of assessment proceeding for the impugned year and thus did not pursue the remedy against the impugned intimation under Section 143(1) of the Act to avoid multiplicity of proceedings.

However, the said appeal was not admitted by the CIT(A) who thought the plea of the assessee was not bonafide and after thought. Moreso, the CIT(A) observed that even after considering the relaxation/grace period granted by the Hon’ble Supreme Court having regard to the Covid-19 pandemic, the appeal was barred by limitation by 135 days. Further he held that, the intimation order under Section 143(1) got merged with the order under Section 143(3) of the Act and thus the said appeal was found not maintainable by the Learned CIT(A).

The Tribunal observed that when the order under Section 143(3) of the Act is passed by the AO, the order of intimation under Section 143(1) of the Act naturally got merged with the same and the said order independently lost its force. Therefore, the appeal preferred by the assessee against the said intimation order under Section 143(1) of the Act was correctly not found maintainable.

The Tribunal held that the order passed by the CIT(A) was just and proper so as not to warrant interference. However, having regard to the principle of fair play the Tribunal granted liberty to the assessee to agitate the issues arising out of the said intimation order under Section 143(1) of the Act before the CIT(A), culminated in the final order of assessment under Section 143(3) of the Act which had been appealed against before the CIT(A).

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