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2023 (6) TMI 1382 - AT - Income TaxDoctrine of merger - Validity of intimation passed u/s. 143(1)(a) for adjustment already been taken into consideration for the purpose of addition in the assessment completed u/s. 143(3) - processing of return by Centralised Processing Centre (CPC) - adjustment has been made in respect of claim under Income and Computation Disclosure Standard (ICDS)-III towards value of contract in progress at net realisable value - CIT(A) has given relief by holding that the adjustment made in processing of return is beyond the scope of prima facie adjustment prescribed u/s. 143(1) - HELD THAT - We note that once an assessment order has been passed u/s. 143(3), the intimation u/s. 143(1) merges into the said assessment order and looses its standalone existence The present appeal being against intimation u/s. 143(1) challenging the adjustment made which has already been taken into consideration for the purpose of addition in the assessment completed u/s. 143(3) of the Act, is rendered as infructuous. Accordingly, we dismiss the present appeal as infructuous. Appeal of the revenue is dismissed.
Issues involved: Appeal against order of Ld. CIT(A) at National Faceless Appeal Centre (NFAC) challenging addition made u/s 143(1) of the Income-tax Act, 1961 regarding adjustment under ICDS-III, and the justification of the CIT(A) in not considering the scrutiny assessment order u/s 143(3) before passing order u/s 250 of the Act.
Summary: The appeal filed by the Revenue was against the order of Ld. CIT(A) at NFAC regarding an addition made under section 143(1) of the Income-tax Act, 1961 by the Central Processing Centre. The adjustment was related to Income Computation and Disclosure Standard (ICDS-III) concerning the value of a contract in progress. The CIT(A) held that the adjustment made in processing the return was beyond the scope of prima facie adjustment under section 143(1) of the Act. It was noted that a similar addition was made in the assessment order u/s 143(3) by the National e-assessment Centre, Delhi, for the same amount towards contract revenue recognition. The appeal against this assessment order was pending before the Ld. CIT(A) at NFAC. Once an assessment order is passed u/s 143(3), the intimation u/s 143(1) merges into the assessment order and loses its standalone existence. The chronology of events showed that the intimation u/s 143(1) was followed by the assessment order u/s 143(3), and subsequently, the CIT(A) order against the 143(1) intimation was issued. However, the CIT(A) order against the 143(3) order was still pending. Considering these facts, the appeal against the intimation u/s 143(1) challenging the adjustment made, which had already been considered in the assessment completed u/s 143(3), was deemed infructuous. Therefore, the appeal of the revenue was dismissed as infructuous. In conclusion, the Tribunal dismissed the appeal of the revenue, pronouncing the order in the open Court on 9th June, 2023.
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