TTP Technologies Private Limited Vs DCIT (ITAT Bangalore)
Bengaluru ITAT: Additions Made in Intimation U/s 143(1) Cannot Be Challenged in Appeal Against Scrutiny Assessment U/s 143(3)
The Bengaluru Bench of the ITAT has held that additions made in an intimation issued under section 143(1) do not automatically merge with a subsequent scrutiny assessment under section 143(3). Consequently, an assessee cannot challenge such additions in an appeal arising from the assessment order under section 143(3) when those issues were never examined or adjudicated during the scrutiny proceedings.
In the present case, the CPC, while processing the return under section 143(1), had made disallowances under section 14A and in respect of MSME interest. Subsequently, the case was selected for scrutiny, but the Assessing Officer examined only the issue of alleged bogus purchases. After verifying the suppliers through notices under section 133(6) and finding the purchases genuine, the AO made no addition in the assessment under section 143(3).
The assessee nevertheless sought to challenge the earlier section 14A and MSME interest disallowances in the appeal against the scrutiny assessment. The Tribunal upheld the CIT(A)’s order rejecting the appeal, observing that these additions arose solely from the intimation under section 143(1) and did not emanate from the assessment order passed under section 143(3). Since the scrutiny assessment had dealt only with the issue of bogus purchases, there was no merger of the 143(1) intimation with the scrutiny assessment on the unrelated issues.
Accordingly, the Tribunal dismissed the appeal and reaffirmed that where an issue is not the subject matter of scrutiny assessment, the intimation under section 143(1) continues to operate independently on that issue, and any challenge must be directed against the 143(1) intimation itself, not the subsequent assessment order.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
