2024 (3) TMI 707 - AT - Income Tax

Appeal against scrutiny assessment dismissed when it merely adopted intimation figures without independent discussion under section 143

M/s. Areca Trust Versus The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi.

M/s. Areca Trust Versus The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. - [2024] 117 ITR (Trib) 264 (ITAT [Bang]) Issues Involved:The appeal challenges the CIT(A)'s order under section 250 of the Income Tax Act, 1961 for the Assessment Year 2018-19.Issue 1: Validity of Appellate OrderThe appellant contended that the CIT(A)'s order was bad in law, void ab initio, and contrary to the facts and circumstances of the case. The appeal raised concerns about the addition made in the intimation under section 143(1) of the Act and the subsequent assessment under section 143(3) of the Act. The appellant argued that the CIT(A) erred in not adjudicating on certain grounds raised before him.Issue 2: Treatment of IncomeThe appellant, a Trust, declared total income at Nil for the Assessment Year 2018-19. However, the AO/CPC processed the return and considered an amount as income chargeable to tax. The assessment under section 143(3) of the Act assessed the total income at a different amount, leading to a discrepancy in the treatment of income. The CIT(A) directed the AO to tax the income at a specific rate, partly allowing the appellant's appeal.Issue 3: Merger of IntimationsThe Tribunal examined the assessment order passed under section 143(3) of the Act and noted that it solely relied on the adjustment made in the intimation under section 143(1) of the Act. The Tribunal emphasized that the cause of action for the appeal arose from the intimation under section 143(1) and not the assessment under section 143(3). It clarified that the tax paid under section 143(1) is deemed to have been paid towards regular assessment, but this does not imply a merger unless discussed and adjudicated in the regular assessment. The Tribunal rejected the appellant's grounds, emphasizing the need for a liberal approach for condonation of delay in filing appeals against intimation orders.Conclusion:The Tribunal dismissed the appeal, stating that the cause of action for the appeal was based on the intimation under section 143(1) of the Act rather than the assessment under section 143(3). It highlighted the importance of addressing discrepancies in the treatment of income and the need for a liberal approach in condoning delays in filing appeals against intimation orders.