Case Law Details
Aashirvad Villa Limited Vs ITO (ITAT Kolkata)
Introduction: The case of Aashirvad Villa Limited Vs ITO, adjudicated by the Income Tax Appellate Tribunal (ITAT) Kolkata, revolves around the legality of proceeding upon intimation passed under section 143(1) of the Income Tax Act without granting the assessee a reasonable opportunity of hearing. The analysis of this case sheds light on the intricacies of pre-litigation mediation and its impact on taxpayers’ rights.
Detailed Analysis: The appeal filed by Aashirvad Villa Limited contested the order of the Commissioner of Income Tax (Appeals) dated 08.11.2023, which upheld the action of the Assessing Officer (AO) in assessing the total income of the assessee without allowing certain deductions claimed by the assessee. The crux of the matter lies in the AO’s rejection of the loss claimed by the assessee from house property, amounting to Rs. 87,143, without affording the assessee a reasonable opportunity of hearing.
Section 143(1) of the Income Tax Act mandates that no adjustments shall be made to the returned income of the assessee without providing intimation to the assessee and considering any response received within thirty days. The failure to adhere to this provision renders the intimation invalid, as established by precedents such as the case of Income Tax Officer (Exemption) vs. Camellia Educare Trust.
The Income Tax Appellate Tribunal, Kolkata, echoed the ruling of the Camellia Educare Trust case, emphasizing the importance of affording the assessee a fair opportunity of hearing before making any adjustments to the returned income. In light of this, the intimation passed by the AO under section 143(1) was deemed invalid, and the loss claimed by the assessee was allowed.
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