Unserved section 143(1) intimation cannot reduce returned loss once regular assessment under section 143(2) has begun.

A final assessment cannot validly reduce a returned loss on the basis of an intimation under section 143(1) that was never served on the assessee, particularly where notice under section 143(2) had already been issued and regular assessment proceedings had begun. On the facts stated, the unserved 143(1) adjustment was treated as ineffective, so the assessment was directed to follow the returned loss. The separate TDS grievance was not examined on merits because it did not arise from the final assessment order, leaving that ground unadjudicated.

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Issues: Whether the loss declared in the return could be reduced in the final assessment on the basis of an unserved intimation under section 143(1) after notice under section 143(2) had been issued, and whether the resultant assessment had to follow the returned loss.

Analysis: The intimation under section 143(1) was not served on the assessee despite repeated requests and grievance petitions, and it was communicated only much later. The assessment proceedings had already moved forward with issue of notice under section 143(2), after which an intimation under section 143(1) could not validly be acted upon. On that basis, the adjustment made through the unserved intimation was treated as invalid, and the final assessment could not rest on a non-existing 143(1) intimation. The challenge relating to non-adjudication of the TDS ground was not examined on merits because it did not arise from the final assessment order.

Conclusion: The reduction of loss based on the unserved intimation was set aside, and the final assessment was directed to follow the returned loss. The assessee succeeded on the main grounds.

Final Conclusion: The appeal succeeded on the substantive assessment dispute concerning the loss computation, while the separate TDS ground was left unadjudicated, resulting in a partly allowed appeal.

Ratio Decidendi: A final assessment cannot validly rely on an unserved and ineffective intimation under section 143(1) once regular assessment proceedings have progressed under section 143(2).

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