Case Law Details
Satishchandra Hiralal Berawala Vs DCIT (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT), Ahmedabad, allowed the assessee’s appeal against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for Assessment Year 2020-21.
The assessee had challenged an adjustment of ₹6,50,830 made by the Centralised Processing Centre (CPC), Bengaluru under Section 143(1) of the Income-tax Act, 1961. Among the grounds raised, the assessee contended that the adjustment had been made without issuance and service of the mandatory notice contemplated under Section 143(1)(a) of the Act. The assessee also raised issues relating to the non-speaking nature of the order, exemption under Section 10(10AA)(ii), and relief under Section 89(1).
Before the Tribunal, the assessee specifically argued that no notice had been issued prior to making the adjustment under Section 143(1)(a). The Tribunal examined the proviso to Section 143(1), which stipulates that no such adjustment shall be made unless an intimation regarding the proposed adjustment is given to the assessee either in writing or through electronic mode.
The Tribunal noted that, during earlier hearings, the Revenue authorities had been directed to produce proof demonstrating issuance of the notice to the assessee. However, despite such opportunity, the Revenue failed to furnish any evidence establishing that the mandatory intimation had been issued before making the adjustment.
In view of the statutory requirement and the absence of proof regarding service of notice, the Tribunal held that the assessee’s appeal deserved to be allowed. The Tribunal observed that the provisions of Section 143(1) require prior intimation before any adjustment is carried out.
Accordingly, in the interest of speedy justice, the appeal of the assessee was allowed. At the same time, liberty was granted to the Revenue to approach the Tribunal in the event that proper proof of issuance of the notice could subsequently be located. The appeal was thus allowed by the Tribunal, and the order was pronounced in open court on 27 November 2024.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, vide order dated 29.03.2024 passed for the Assessment Year 2020-21.
2. The Assessee has taken the following grounds of appeal:-
1. The Ld Addl. JCIT A grossly erred on facts and in law in dismissing the appeal without adjudicating the preliminary issue raised regarding the violation of statutory provision of Sec 143(1)(a) of the Income tax Act 1961 the Act in the form of non-issue and service of the notice by the AO u/s 143(1)(a) of the Act before making the adjustment of Rs. 6,50,830/-
2. The Ld Addl. JCIT A grossly erred on facts and in law in dismissing the appeal without adjudicating the ground regarding non speaking order of the Ld AO passed u/s. 143(1)
3. The Ld AddI JCIT A has grossly erred in law and is not justified in confirming the addition made by the Ld AO without deciding the involved question of law and not allowing the exemption exceeding RS 3 lakhs u/s. 10(10AA)(ii) of the Act considering the invalid Gazette Notification No 50588 E dated 31.05.2002 issued by CBDT effective 01.04.1998
4. The Ld AddI JCIT A grossly erred in not adjudicating the raised ground in appeal to the effect that taxed Leave Encashment amount exceeding RS 3 lakhs qualifies for relief u/s. 891 of the Act.
5. Your appellant craves leave to add amend alter any ground of appeal
3. An adjustment of Rs.6,50,830/- has been made by the CPC, Bangalore u/s.143(1) of the Act. The Ld. Counsel for the assessee argued that before making adjustment u/s.143(1)(a) of the Act, no notice has been given to the assessee.
4. We have gone through the provisions of Section 143(1) of the Act which reads as under:
“…
….
Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode…”
5. As per the provisions of the Act, an intimation has to be given to the assessee whether in writing or in electronic mode before making such adjustments. The revenue authorities have been asked in the earlier hearing to submit the proof of issue of notice to the assessee which the revenue authorities failed to produce. Hence, in the interest of speedy justice, the appeal of the assessee is hereby allowed, granting liberty to the Revenue to approach the Tribunal in case the right proof of issue of notice could be found.
6. In the result, the appeal of the assessee is allowed.
This Order pronounced in Open Court on 27.11.2024
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