Prior notice is required before Section 143(1) adjustments; unnotified adjustments are unsustainable and cannot be restored for verification.

Section 143(1) permits summary processing of a return, but the first proviso requires prior notice before making an adjustment. The notes state that an adjustment made without this notice is unsustainable, as occurred with the intimation dated 18 December 2021. They also distinguish Section 143(1) processing from regular assessment under Section 143(3), explaining that verification cannot be undertaken by restoring the matter in an appeal arising solely from an intimation. The adjustment was therefore described as deleted for non-compliance with the statutory notice requirement, with the issue decided in favour of the assessee.

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Issues: Whether the adjustment of Rs. 75,00,000 made while processing the return under Section 143(1) of the Income-tax Act, 1961 was sustainable when no prior notice as required under the first proviso to Section 143(1) was issued, and whether the matter could be restored for verification in proceedings arising from an intimation under Section 143(1).

Analysis: The dispute arose from an intimation under Section 143(1) of the Income-tax Act, 1961 by which an addition was made to the returned income. The legal framework distinguished summary processing under Section 143(1) from regular assessment under Section 143(3). The order records that verification of the issue could be undertaken only in proceedings under Section 143(3), and not by restoring the matter in an appeal arising from a mere processing intimation. It was further noted that the first proviso to Section 143(1) required issuance of a notice to the assessee before making the adjustment. Since the intimation dated 18.12.2021 had been issued without such notice, the statutory requirement was not complied with, rendering the intimation and the consequential adjustment unsustainable.

Conclusion: The adjustment made under Section 143(1) of the Income-tax Act, 1961 was deleted as the intimation was unsustainable for non-compliance with the notice requirement under the first proviso to Section 143(1); the issue was decided in favour of the assessee.

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