ITO Vs United Provinces Sugar Company Pvt. Ltd. (ITAT Kolkata)
In this case, CPC passed intimation u/s 143(1) while processing return and disallowed carry forward of business loss ₹22.62 Cr and unabsorbed depreciation ₹31.68 Cr without issuing mandatory notice u/s 143(1)(a). CIT(A) allowed assessee’s appeal holding adjustment void ab initio, which was affirmed by ITAT.
The assessee had filed return for AY 2024-25 claiming refund after set-off of brought forward losses, and such losses were consistently accepted in earlier years’ intimations. However, CPC made adjustment without giving any show-cause opportunity or reasons in intimation order. ITAT observed that first proviso to sec.143(1)(a) mandates notice before any adjustment and absence of such notice renders action invalid.
Tribunal further noted that brought forward losses were accepted in past assessment years and no new material existed to deny carry forward during processing stage. Since AO lacked power to disallow carry forward loss through 143(1) without due process, CIT(A)’s direction to allow set-off and permit carry forward of balance loss & depreciation was upheld.
Result:
Revenue appeal dismissed; CIT(A) order sustained allowing carry forward of business loss & unabsorbed depreciation.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This appeal filed by the revenue is directed against the order dated 28.03.2025 of the Addl/JCIT(A)-9, Delhi (hereinafter referred to as the “CIT(A)”) passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2024–25.
