Satyagrah Chhavni Co-op. Housing Society Limited Vs ITO (ITAT Ahmedabad)
The ITAT, Ahmedabad Bench held that any adjustment while processing return u/s 143(1) is invalid if no prior intimation is given to the assessee, as mandated by the proviso to s.143(1). In this case (AY 2020-21), the assessee—a co-operative housing society—filed its return declaring NIL income, claiming maintenance income of ₹97.29 lakh as deductible u/s 80P.
While processing the return, CPC disallowed the deduction and added ₹97.29 lakh as business income, without issuing any prior notice/intimation. On a factual query by the Tribunal, the Revenue itself admitted that no such intimation was issued and no record existed on ITBA.
The Tribunal held that the statutory safeguard in the proviso to s.143(1) is mandatory, and no adjustment—whether correct or incorrect—can be made behind the assessee’s back. Since the foundational requirement of prior intimation was breached, the adjustment was void ab initio, irrespective of merits of the 80P claim.
Accordingly, the 143(1) intimation was held bad in law, the adjustment was deleted, and the assessee’s appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the assessee against the order dated 10.10.2025 passed by the Ld. Addl/JCIT (A)-13, Mumbai (‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (‘the Act’ in short) for Assessment Year 2020-21.
