Case Law Details
Add More Real Estate Developers LLP Vs Asst. Director of Income-tax (ITAT Mumbai)
In the case of Add More Real Estate Developers LLP Vs Asst. Director of Income-tax, the ITAT Mumbai addressed the issue of an improper addition made by the Assessing Officer (AO) amounting to ₹1,83,17,026/-, which the assessee claimed was exempt under Section 10(2A) of the Income Tax Act. The addition stemmed from the profits received from various partnership firms, which are typically exempt from tax under the cited section. The controversy arose because the AO issued an intimation and subsequently passed a final order under Section 143(1) of the Act within a mere two days, thereby violating the second proviso of Section 143(1). This proviso mandates that any adjustments proposed by the AO should be communicated to the assessee, allowing them thirty days to respond before finalizing the order. Section 143(1) outlines the procedure for processing returns, including adjustments for arithmetical errors or incorrect claims apparent from the return’s information, and stipulates that the assessee must be notified and given an opportunity to respond to any such adjustments. The ITAT found that the AO acted beyond their jurisdiction by not adhering to this procedural requirement. Consequently, the ITAT quashed the AO’s order and deleted the addition of ₹1,83,17,026/-, emphasizing the necessity of following statutory provisions to ensure fair assessment practices. This case highlights the importance of procedural compliance by tax authorities and reinforces the protection of taxpayer rights under the law.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
Instant appeal of the assessee is preferred against the order of the Learned Commissioner of Income-tax Addl / JCIT(A)-1, Hyderabad [for brevity, ‘Ld. CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2020-21, passed on dated16.03.2024.The impugned order was emanated from the order of the CPC, Bengaluru (in short, ‘the A.O.’), passed under section 143(1)of the Act, date of order24/12/2021.
2.The assessee has taken the following grounds of appeal:-
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