Tribunal Dismisses Revenue's Appeal on ICDS-III Adjustment; Deems It Beyond Scope of Section 143(1) of Income-tax Act.

The Tribunal dismissed the Revenue's appeal against the CIT(A) at NFAC concerning an adjustment made under section 143(1) of the Income-tax Act, 1961. This adjustment, related to ICDS-III, was deemed beyond the scope of section 143(1). Since a similar adjustment was already addressed in an assessment order under section 143(3), the appeal was considered infructuous. The Tribunal pronounced the dismissal on 9th June 2023.

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Issues involved: Appeal against order of Ld. CIT(A) at National Faceless Appeal Centre (NFAC) challenging addition made u/s 143(1) of the Income-tax Act, 1961 regarding adjustment under ICDS-III, and the justification of the CIT(A) in not considering the scrutiny assessment order u/s 143(3) before passing order u/s 250 of the Act.

Summary:
The appeal filed by the Revenue was against the order of Ld. CIT(A) at NFAC regarding an addition made under section 143(1) of the Income-tax Act, 1961 by the Central Processing Centre. The adjustment was related to Income Computation and Disclosure Standard (ICDS-III) concerning the value of a contract in progress. The CIT(A) held that the adjustment made in processing the return was beyond the scope of prima facie adjustment under section 143(1) of the Act. It was noted that a similar addition was made in the assessment order u/s 143(3) by the National e-assessment Centre, Delhi, for the same amount towards contract revenue recognition. The appeal against this assessment order was pending before the Ld. CIT(A) at NFAC.

Once an assessment order is passed u/s 143(3), the intimation u/s 143(1) merges into the assessment order and loses its standalone existence. The chronology of events showed that the intimation u/s 143(1) was followed by the assessment order u/s 143(3), and subsequently, the CIT(A) order against the 143(1) intimation was issued. However, the CIT(A) order against the 143(3) order was still pending. Considering these facts, the appeal against the intimation u/s 143(1) challenging the adjustment made, which had already been considered in the assessment completed u/s 143(3), was deemed infructuous. Therefore, the appeal of the revenue was dismissed as infructuous.

In conclusion, the Tribunal dismissed the appeal of the revenue, pronouncing the order in the open Court on 9th June, 2023.

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