Belated section 143(1) intimation for AY 2021-22 held time-barred under 5th proviso, adjustment deleted accordingly

ITAT Delhi held that the intimation issued u/s 143(1) for AY 2021-22 was time-barred under the 5th proviso to section 143(1). The assessee had filed the return on 15.03.2022, and the statutory nine-month period for issuing intimation expired on 30.12.2022. Since CPC processed the return and sent the intimation only on 27.02.2023 via email and electronic message, it was beyond the prescribed time limit. The Tribunal held that such a belated intimation is bad in law and consequently deleted the adjustment made therein, allowing the assessee's ground of appeal.

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1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether the intimation issued under section 143(1) was barred by limitation under the fifth proviso to section 143(1) of the Income-tax Act, 1961.

1.2 Consequentially, whether the adjustment made in the impugned intimation under section 143(1) was liable to be deleted as being bad in law.

1.3 Whether the grievance regarding non-grant of prior opportunity before making adjustment under section 143(1)(a) required adjudication when the intimation itself was held time-barred.

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2. ISSUE-WISE DETAILED ANALYSIS

2.1 Limitation for issuance of intimation under section 143(1)

Legal framework

2.1.1 The Court considered the fifth proviso to section 143(1) of the Income-tax Act, 1961, which stipulates that no intimation under sub-section (1) shall be sent after the expiry of nine months from the end of the financial year in which the return is made.

Interpretation and reasoning

2.1.2 It was noted that the assessee filed the return of income for the relevant assessment year on 15.03.2022.

2.1.3 The Court observed that, as per the fifth proviso to section 143(1), the period of nine months from the end of the financial year in which the return was filed expired on 30.12.2022, and no intimation under section 143(1) could lawfully be sent thereafter.

2.1.4 On facts, it was found that the Centralized Processing Centre sent the communication/intimation of processing under section 143(1) by email on 27.02.2023 at 9:33 p.m., followed by an electronic message on the same date and time intimating that the return had been processed and that intimation under section 143(1) had been sent to the registered email ID.

2.1.5 The Court treated the said date (27.02.2023) as the date on which the intimation under section 143(1) was sent/communicated to the assessee for purposes of computing limitation.

2.1.6 Since this date fell beyond the prescribed period of nine months from the end of the financial year in which the return was furnished, the Court held that the impugned intimation under section 143(1) was issued beyond the period of limitation laid down in the fifth proviso to section 143(1).

Conclusions

2.1.7 The Court concluded that the intimation issued under section 143(1) was time-barred and, therefore, bad in law.

2.2 Validity of adjustment made under section 143(1) and effect of time-barred intimation

Interpretation and reasoning

2.2.1 Having held that the intimation under section 143(1) was sent beyond the statutory time limit prescribed by the fifth proviso to section 143(1), the Court proceeded on the footing that such an intimation could not be sustained in law.

2.2.2 As the adjustments made by the Centralized Processing Centre flowed from and were embedded in the impugned, time-barred intimation, the legal foundation for such adjustments stood vitiated.

Conclusions

2.2.3 The Court held that the adjustment made in the intimation under section 143(1) was liable to be deleted, and ordered deletion of the adjustment accordingly.

2.3 Necessity of adjudicating the plea regarding absence of prior opportunity under section 143(1)(a)

Interpretation and reasoning

2.3.1 One of the grounds raised was that the intimation under section 143(1) was bad in law for not providing any prior intimation or opportunity to the assessee, in writing or in electronic mode, regarding the proposed adjustment as contemplated by the first proviso to section 143(1)(a).

2.3.2 The Court noted that, since it had already held the intimation under section 143(1) to be bad in law on the ground of limitation, the adjudication of the separate ground alleging violation of the requirement of prior intimation/opportunity was not necessary for disposal of the appeal.

Conclusions

2.3.3 The Court declined to adjudicate the ground relating to lack of prior opportunity under section 143(1)(a), expressly leaving the issue open, as the appeal was already allowed on the ground that the intimation itself was time-barred.

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