9911796707
TMI Blog2025 (3) TMI 988X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed. CIT(A) had proceeded to grant relief to the Assessee without providing any opportunity to the AO to verify (a) the factual averments made on behalf of the Assessee and (b) the documents filed by the Assessee in support of the same - We do find some merit in the aforesaid contention. The adjustments were initially made u/s 143(1). Admittedly, no submission/documents in relation to the adjustment were filed during the regular assessment proceedings. CIT(A) has proceeded to allow the grounds raised without calling for a remand report. It was contended on behalf of the Assessee that no new evidence was filed by the Assessee during the appellate proceedings before the Tribunal and therefore, the question of calling for a remand report does not arise. Arguendo, even if the aforesaid submission of the Assessee is accepted as correct, we find that the CIT(A) has not recorded any reasoning for accepting the contention of the Assessee. After reproducing the assessment order and the submissions of the Assessee, the CIT(A) has concluded in favour of the Assessee. However, no reasoning has been recorded. The order passed by the CIT(A) is silent as the discrepancy or inadvertent er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal against the Assessment Order, dated 22/09/2022, passed under Section 143(3) read with Section 144B of the Act for the Assessment Year 2020-2021. 3. The Revenue has raised following grounds of appeal : "1. Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified in deleting the addition/adjustment made u/s. 43B of the Act in intimation u/s. 143(1) of the IT Act in the appeal filed against order u/s. 143(3) r.w.s. 144B of the I. T. Act ignoring the fact that the assessee had not challenged the intimation u/s. 143(1) of the Act by filling separate appeal. 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified in deleting the addition/adjustment made u/s. 143(1) of the IT Act in the appeal filed against order u/143(3) r.ws. 144B of the I.T. Act without calling the remand report on the issue of the addition/adjustment made u/s. 143(1) of the IT Act. 3. Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified in directing the AO to give credit of additional TDS of Rs. 27, 40, 247/- reflected in 26AS but not claimed by the assessee in the return of the income. 4. Whether on the facts and circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only referred to addition/adjustment made under Section 43B in Ground No. 1 whereby the Revenue has contended that the CIT(A) erred in deleting the addition/adjustment made under Section 43B of the Act in intimation issued under Section 143(1) of the Act in appeal filed against order passed under Section 143(3) r.w.s. 144B of the Act. Similarly, in Ground No. 2 raised by the Revenue has challenged the action of CIT(A) granting relief to the Assessee without calling for a remand report. Ground No. 3 & 4 are directed against the grant of TDS. While Ground No. 5 seeks setting aside of order passed by the CIT(A). Since all the grounds share overlapping facets the same are taken up together therein after. 6. We have heard both the sides. 7. The first contention of the Revenue is that the CIT(A) has granted relief to the Assessee in respect of adjustments made while processing the return of income under Section 143(1) of the Act in appeal preferred by the Assessee against the assessment order passed under Section 143(3) of the Act. According to the Revenue intimation issued under Section 143(1) of the Act is appealable order and therefore, the Assessee ought to have filed appeal again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. This resulted in avoidable revenue loss. With the objective of reducing the aforesaid revenue loss, it was proposed to substitute the former Section 143(1) of the Act by a new Section 143(1) which provided for computation of total income after making the following adjustments to the returned income (a) adjustment for any arithmetical error in the return and/or (b) adjustment for an incorrect claim, if such incorrect claim is apparent from any information in the return. Further, the expression 'an incorrect claim apparent from any information in the return' was defined to mean such claim on the basis of an entry in the return (i) of an item, which is inconsistent with another entry of the same or some other item in such return; (ii) in respect of which, information required to be furnished to substantiate such entry, has not been furnished under this Act; and (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction. Thus, the scope of newly substituted Section 143(1) was limited to the aforesaid adjustments. On the other hand the scope of regular scrutiny assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive for the Assessee that on passing of the assessment order passed under Section 143(3) of the Act, the intimation issued under Section 143(1) of the Act stands merged with the assessment order. In our view, while the aforesaid contention raised on behalf of the Assessee might have held good for the former Section 143(1) of the Act [effective from 10/06/1999 to 31/03/2008], the same did not hold good in all cases where intimation is issued under Section 143(1) of the Act as substituted by the Finance Act, 2008 [effective from 01/04/2008]. The former Section 143(1) did not provide for any adjustment and the scope of Section 143(1) was limited to checking whether taxes have been correctly paid on the income returned with no provision for prima facie adjustment. Thus, once the order was passed under Section 143(3) of the Act, it can be said that the intimation issued under Section 143(1) of the Act stood merged with Assessment Order passed under Section 143(3) of the Act. However, Section 143(1) of the Act substituted by Finance Act, 2008 provided for specified adjustments. Therefore, after the substitution of 143(1) of the Act by way of Finance Act 2008 the applicability of doctrin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021-22 5. Status Company 6. Residential Status Resident 7. Date of filing of Return of Income 15/03/2022 8. Acknowledgement Number of Return of Income xx xx 9. Date of processing u/s. 143(1)(a) of the Income-tax Act 25/10/2022 10. Income Computed under Section 143(1) of the Act 2, 28, 25, 33, 940 11. Date of service of Notice under Section 143(2) of the Income-tax Act 28/06/2022, ... 12. Date(s) of issue of Notice(s) under section 142(1) of the Income-tax Act 12/10/2022, 01/11/2022 13. Order passed under section 143(3) read with section 144B of the Income tax Act 14. Returned Income Rs.2, 18, 41, 70, 860 15. Date of Order 29/12/2022 16. DIN xx xx 14. From above it can be seen that the Assessing Officer was aware of the fact that return of income was processed under Section 143(1) of the Act on 25/10/2022 i.e., during the pendency of the regular scrutiny assessment proceeding (which were initiated by issuance of notice, dated 28/06/2022, under Section 143(2) of the Act). The Assessing Officer also recorded that vide intimation order, dated 25/10/2022, income of the Assessee has been computed at INR.2, 28, 25, 33, 940/-. Despite the aforesaid, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Accordingly, we accept the contention of the Assessee that in the facts and circumstances of the present case the doctrine of merger would apply. Therefore, we reject the contention of the Revenue that the CIT(A) erred in entertaining and adjudicating the grounds raised by the Assessee in appeal before the CIT(A) challenging the adjustments made while issuing intimation under Section 143(1) of the Act. Accordingly, Ground No. 1 raised by the Revenue is dismissed. 16. This takes us to the second contention of the Revenue. In Ground No. 2 raised by the Revenue is has been contended that the CIT(A) had proceeded to grant relief to the Assessee without providing any opportunity to the Assessing Officer to verify (a) the factual averments made on behalf of the Assessee and (b) the documents filed by the Assessee in support of the same. We do find some merit in the aforesaid contention. The adjustments were initially made under Section 143(1) of the Act. Admittedly, no submission/documents in relation to the adjustment were filed during the regular assessment proceedings. The CIT(A) has proceeded to allow the grounds raised without calling for a remand report. It was contended on beh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granting credit of TDS to the extent of INR.27, 40, 247/- [INR.29, 30, 368/- minus INR.1, 90, 121/-] since the aforesaid TDS was not claimed in the return of income. The Revenue has contended that since the Assessee had not claimed the aforesaid additional credit of TDS of INR.27, 40, 247/- in the return of income, the CIT(A) could not have granted the credit of TDS. In our view, the claim of the Assessee could, at best, be regarded as additional claim made by the Assessee in appellate proceedings before the CIT(A). The aforesaid additional claim has been adjudicated on the basis of the material on record by the CIT(A) without any fresh inquiry into facts. Therefore, we do not find any infirmity in the approach adopted by the CIT(A). It is admitted position that updated Form 26AS reflected aggregate TDS credit of INR.12, 76, 37, 773/- for the Assessment Year 2021-2022. In our view, the Assessee is entitled to claim additional TDS credit provided corresponding income has been offered to tax during the Assessment Tear 2021-2022. Accordingly, we direct the Assessing Officer to allow credit for additional TDS of INR.27, 40, 247/- as reflected in updated Form 26AS after verifying that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid additional TDS was offered for taxation. 5. The appellant prays that the order of the CIT(A) on the grounds be set aside and confirm the order of the AO." 20. During the course of hearing both the sides made submissions identical to those made in relation to grounds raised in appeal for the Assessment Year 2021-2022. Both the sides had agreed that our finding/adjudication on the grounds raised in appeal for the Assessment Year 2021-2022 shall apply mutatis mutandis to grounds raised in appeal for the Assessment Year 2020-2021. 21. For the Assessment Year 2020-2021, Assessee filed its return of income on 15/02/2021. The case of the Assessee was selected for scrutiny and notice, dated 29/06/2021, under Section 143(2) of the Act was issued by the Assessing Officer. Thereafter, intimation under Section 143(1) of the Act was issued 25/12/2021. Appeal was not filed against the aforesaid intimation since the regular assessment proceedings were pending. The regular assessment proceedings culminated into passing of the Assessment Order, dated 22/09/2022, under Section 143(3) read with Section 144B of the Act. In appeal filed against the aforesaid Assessment Order, the Assessee raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eo Conferencing which was duly arranged on 10.08.2022, during the conference the AR of the assessee's company presented the case and explained the issues involved in detail. The argument of the assessee is heard properly and put on record. After considering all the material available on record and video conferencing, the explanation offered by the assessee company and the documentary evidences submitted in support of the return of income and the queries raised in 142(1) and SCNs in connection with the CASS reason and other issues noticed were examined in detail and found to be satisfactory and no adverse inference drawn from the replies of the assessee. Hence, the assessment is completed by making NIL addition. 5. Table of variations: Sl.no Description Amount (in INR) 1. Income as per Return of Income filed Rs. 149, 11, 76, 360/- 2. Income as computed u/s 143(1)(a) - 3. Variation in respect of issue of disallowance u/s 14A - 4. Variation in respect of issue of disallowance-insurance expense claimed u/s 36 - 5. Total Income determined as per the above proposal Rs. 149, 11, 76, 360/- The assessment is made u/s 143(3) read with section 144B of the Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identical ground raised by the Revenue in appeal for the Assessment Year 2021-2022, we direct the Assessing Officer to allow credit for additional TDS of INR.30, 10, 050/- after verifying that (a) the aforesaid TDS credit is reflected in updated Form 26AS and (b) the corresponding income has been offered to tax as income for the Assessment Year 2020-2021. The Assessee is directed to file a statement showing reconciliation statement in support of the contention that the additional TDS credit claimed pertains to income already offered to tax. Accordingly, to his extent the order passed by the CIT(A) is confirmed. In view of the aforesaid, Ground No. 2, 3 and 4 raised by the Revenue are partly allowed. In terms of the aforesaid, Ground No. 5 seeking set-aside of the order passed by the CIT(A) is partly allowed. we confirm the order passed by the CIT(A) to this extent. Accordingly, Ground No. 2 raised by the Revenue is partly allowed, while Ground No. 3 and 4 raised by the Revenue are dismissed. In terms of the aforesaid, Ground No. 5 seeking set-aside of the order passed by the CIT(A) is partly allowed. 26. In result, appeal preferred by the Revenue is partly allowed. ITA No. 4609/M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Source (TDS) as claimed in return of income and reflected in Form 26AS. Being aggrieved, the Revenue has now preferred the present appeal before the Tribunal on the grounds reproduced in paragraph 28 above. 30. During the course of hearing both the sides had agreed that there is no change in the facts and circumstances. Ground No. 1, 2 and 3 raised by the Revenue in the present appeal are identical to Ground No. 1, 2 and 5 raised by the Revenue in appeal pertaining to the Assessment Years 2020-21 and 2021-22, respectively. The Assessing Officer and the CIT(A) had adopted approach identical to the approach adopted for Assessment Years 2020-2021 and 2021-2022. Therefore, our finding and adjudication on grounds raised in appeal for the Assessment Year 2021-2022 shall apply mutatis mutandis to the corresponding grounds raised in appeal for the Assessment Year 2022-2023. Accordingly, on account of parity for facts and adopting the reasoning given while disposing identical grounds raised in appeal for the Assessment Year 2021-2022 in paragraph 7 to 16 above, Ground No.1 raised by the Revenue is dismissed. Ground No.2 raised by the Revenue partly allowed as the order passed by the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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