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2024 (7) TMI 1136 - AT - Income TaxValidity of adjustments made in the intimation u/s 143(1) - period of limitation - Addition of payment of employees contribution to PF and ESIC beyond the due date - only objection of the assessee is that the decision of the Apex Court Checkmate Services Private Limited. 2022 (10) TMI 617 - SUPREME COURT was applicable only in the case of scrutiny assessment and that no adjustment can be made on the basis of this decision while processing the return of income u/s 143(1) HELD THAT - There is no dispute to the fact that return of the assessee for A.Y. 201920 was made with a refund claim. Thus, the extended time limit till 31.01.2024 was squarely applicable for processing the return of the assessee for this year. The return of the assessee was, in fact, processed on 31.03.2021, which was within the original extended time limit. Considering the fact that the CBDT had subsequently extended the time limit for processing the return till 31.01.2024; the intimation dated 31.03.2021, even though it was digitally signed and communicated on 01.04.2021, cannot be held as barred by limitation. Therefore, the legal ground raised by the assessee in this regard is rejected. Type of adjustment, as stipulated in the clauses (i) to (vi) of Section 143(1) - There is no dispute to the fact that any incorrect claim, if it was apparent from any information in the return, was liable for adjustment while processing the return. From the intimation sheet as sent by the CPC, it is found that the adjustment was categorically indicated. In fact, this annexure contains details of all the claims made by the assessee in the return of income and the computation as made by the CPC under Section 143(1) of the Act and the variance if any, is also indicated in respect of each item. Thus, the nature of adjustment as made by the CPC was very much reflected in the intimation. Further, the nature/type of adjust was also mentioned in the prior intimation sent to the assessee by the CPC, which is reproduced later in the order. In view of these facts, the ground as taken by the assessee is dismissed. No prior intimation given to the assessee before making the adjustment - There cannot be any doubt that the email ID account [email protected] on which this communication was sent belonged to the assessee and that the assessee was duly communicated about the adjustments before the processing of the return. In fact, the intimation dated 31.03.2021, which is subject matter of this appeal, was also sent on the same email ID [email protected] . Therefore the contention of the assessee that the email [email protected] was an unrelated email ID is not found correct. CPC had all along made all communication with the assessee on this email ID only. Hence, the contention that the prior intimation sent on this email was not legally valid can t be accepted. The intimation u/s 143(1) sent to the assessee on this email ID was well received by the assessee. So the earlier communication regarding proposed adjustments u/s 143(1)(a) of the Act before processing of the return of income for the A.Y. 2019-20 sent on this email ID was legally valid intimation. In fact the assessee has not come clean before us and has tried to misrepresent the facts. Decided against assessee.
Issues Involved:
1. Timeliness of the intimation under Section 143(1). 2. Validity of adjustments made without specifying the limb of Section 143(1)(a). 3. Compliance with mandatory procedures and principles of natural justice. 4. Applicability of Supreme Court decision in Checkmate Services Pvt Ltd vs. CIT. 5. Treatment of employees' contribution to PF & ESI under Section 36(1)(va) and Section 37. 6. Disallowance under Section 43B. Detailed Analysis: 1. Timeliness of the Intimation: The appellant contended that the intimation issued under Section 143(1) was time-barred as it was digitally signed and emailed on 01.04.2021, beyond the statutory time limit of 31.03.2021. The Tribunal found that the intimation was dated 31.03.2021 and was computer-generated without a signature. The digital signature on 01.04.2021 was for email communication, not the actual date of intimation. The Tribunal also noted that the CBDT extended the time limit for processing returns for AY 2019-20 till 31.01.2024, making the intimation within the permissible period. Therefore, the ground of being time-barred was rejected. 2. Validity of Adjustments Without Specifying the Limb of Section 143(1)(a): The appellant argued that the intimation did not specify the type of adjustment under Section 143(1)(a) clauses (i) to (vi), making it defective. The Tribunal found that the adjustments were clearly indicated in the intimation's annexure and prior communication. Thus, the nature of the adjustment was sufficiently detailed, and this ground was dismissed. 3. Compliance with Mandatory Procedures and Principles of Natural Justice: The appellant claimed that no prior intimation or show cause notice was given before making adjustments, violating Section 143(1) provisos and principles of natural justice. The Tribunal examined the "Dashboard: User Profile Administration" and found that a communication was sent to the appellant on 30.12.2020, indicating proposed adjustments. The Tribunal determined that the email used was valid and belonged to the appellant. Therefore, the claim of no prior intimation was found incorrect, and this ground was dismissed. 4. Applicability of Supreme Court Decision in Checkmate Services Pvt Ltd vs. CIT: The appellant contended that the Supreme Court decision in Checkmate Services Pvt Ltd vs. CIT, applicable to assessments under Section 143(3), should not apply to adjustments under Section 143(1). The Tribunal rejected this argument, stating that the Supreme Court's declaration of law applies to all proceedings, including processing under Section 143(1). Therefore, the objection was without merit, and the adjustment was upheld. 5. Treatment of Employees' Contribution to PF & ESI Under Section 36(1)(va) and Section 37: The appellant argued that late deposits of employees' contributions to PF & ESI should be allowed as business expenditure under Section 37 due to "business and commercial expediency." The Tribunal noted that the adjustment was based on the Tax Auditor's report, which indicated late payments. The Tribunal found no merit in the appellant's claim as it was not certified by the Auditor, and no such claim was made in the return. Therefore, this ground was rejected. 6. Disallowance Under Section 43B: The appellant claimed a disallowance of Rs. 43,00,440 under Section 43B due to an inadvertent omission by the Tax Auditor. The Tribunal did not specifically address this issue in the detailed analysis, implying that it was not a primary focus of the appeal. Conclusion: The Tribunal dismissed the appeal, upholding the adjustments made under Section 143(1) and confirming that the intimation was within the permissible time limit and complied with mandatory procedures. The grounds raised by the appellant were found to be without merit, and the appeal was dismissed.
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