ICDS adjustment deleted in scrutiny assessment after the original processing intimation was quashed by the High Court.

An ICDS adjustment made while processing the return under section 143(1)(a) could not be retained in the scrutiny assessment under section 143(3) after the jurisdictional High Court had already quashed the foundational intimation. The assessment computation was required to follow that earlier setting aside, so the same addition could not survive in the later order. The appellate authority's jurisdictional objection did not bar consequential relief in the assessment proceedings. The disputed ICDS adjustment was therefore deleted from the computation of total income, and the matter was decided in favour of the assessee.

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Issues: Whether the ICDS adjustment of Rs. 1284.66 crores, made while processing the return under section 143(1)(a), was required to be deleted from the computation of total income in the scrutiny assessment under section 143(3) after the intimation under section 143(1)(a) had been quashed by the High Court.

Analysis: The adjustment had been carried forward into the assessment order under section 143(3), but the earlier intimation under section 143(1)(a) making the disputed ICDS addition had already been quashed by the jurisdictional High Court. Once the foundational intimation was set aside, the same adjustment could not survive in the later computation of income. The appellate authority's jurisdictional objection did not prevent grant of consequential relief in the assessment proceedings.

Conclusion: The ICDS adjustment was directed to be deleted from the assessment computation, and the issue was answered in favour of the assessee.

Final Conclusion: The appeal succeeded to the extent that the disputed ICDS addition was removed from the scrutiny assessment, and the remaining matters were only consequential.

Ratio Decidendi: Where an adjustment made under section 143(1)(a) has been quashed, the same adjustment cannot be retained in the assessment under section 143(3) and consequential deletion must follow.

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