2024 (4) TMI 920

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....n/order under section 143(1) was issued from the Centralized Processing Centre on 28.03.2019 computing an income of Rs 30,93,07,020/- as against the income of Rs 18,10,42,260/-declared by the assessee thus making an addition of Rs 12,82,64,760/- in the total Income declared by the assessee on account of disallowance under section 36(1)(va) for delay in depositing employee contribution of PF/ESI (Rs 12,82,40,760/-) and on account on income of House property(Rs 24,000/-) 3. That aggrieved by the Intimation/Order under section 143(1), the assessee filed an appeal to the CIT (Appeals) on 24.04.2019. The appeal was subsequently withdrawn as the assessee's case was selected for scrutiny under CASS. Assessment order u/s 143(3) dated 29.12.2019 was passed assessing income of Rs 59,88,23,897/-. The assessee filed appeal against the order u/s 143(3) to the CIT(Appeals) on 13.01.2020. Assessee has claimed that since the assessing officer did not make the addition on the subject of order u/s 143(1) for which the assessee had filed the appeal, so the assessee thought that the subject of 143(1) order has been merged and duly considered by the assessing officer in the assessment u/s 143(3). So....

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.... the head house property by the assessing officer has been already included in other sources income in the ITR filed by the assessee. 8. Assessee has come in appeal raising following grounds ; "1. Because the learned CIT(A) erred in upholding the order of the AO u/s 154 r.w.s 143(3) and 143(1) disallowing a sum of Rs. 12,82,40,760/- being Employees Contribution to PF and ESI, which were deposited before the due date of filing the return of income for the mere reason that appeal filed in regard to section 143(1) was withdrawn by the assessee. The appeal was withdrawn by the assessee against the order of section 143(1) because order u/s 143(1) was practically merged with the assessment u/s 143(3). 2. Because the learned CIT(A) has misunderstood the purpose of withdrawal of Appeal filed against order u/s 143(1). The assessee has withdrawn the appeal filed against order u/s 143(1) because the order u/s 143(1) was merged with assessment u/s 143(3). The learned CIT(A) has misunderstood that the assessee has not disputed the addition /disallowance in order u/s 143(1). 3. Because the learned CIT(A) erred in upholding the order of the AO u/s 154 r.w.s. 143(3) a....

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....nterested in the appeal and not passing the assessment order on merits. 12. Because the learned CIT(A) has erred in disposing the appeal by ignoring the settled law that the act does not postulate multiple assessments by different assessing officers or assessment or part or portion of an income.(Kanjimal & Sons v CIT [1982] 138 ITR 391 (Del)). 13. That the appellant craves, leave to add, alter, amend or .vary and or withdraw any or all of the aforesaid grounds of Appeal or at time of hearing of the above appeal." 9. Heard and perused the record. The grounds indicate composite controversy as to if intimation u/s 143(1) of the Act got merged with assessment order u/s 143(3) of the Act and consequently Ld. AO was not justified to make addition by way of rectification u/s 154 of the Act, on the basis of facts which have been considered during assessment. 10. Having considered the submissions and the record it comes up that in the intimation u/s 143(1) of the Act an adjustment was done in regard to delay in depositing Employees Contribution of PE/ESI and on account of income of house property and thereby the returned income of Rs. 18,10,42,260/- was recomputed at....

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....0,42,260/- Assessed Income u/s 143(1): 30,93,07,020/- Difference:- 12,82,64,760/- (it is required to be added in the assessed income u/s 143(3) Income Assessed u/s 143(3):- 598823900/-+ 12,82,64,760=72,70,88,660 (Revised Total Income)" 12. Thus on appreciating above, what comes up is that while exercising power u/s 154 r.w.s. 143(3) of the Act, Ld. AO has not gone back to reconsider the issues examined u/s 143(3) and make an addition thereupon. It is not a case where rectification power was exercised consequent to any change of law or applying a different proposition of law than one considered while framing assessment u/s 143(3) of the Act. The rectification order as reproduced above makes it apparent that the income determined vide intimation u/s 143(1) was taken as income for making further additions u/s 143(3) assessment. Certainly that was a mistake apparent from record as the intimation u/s 139(1) stood final after withdrawal of the appeal by the assessee. Accordingly, the difference between the returned income Rs. 18,10,42,260/- and the assessed income u/s 143(1) of Rs. 309,307,020/-, was erroneously ignored while passing order u/s 143(3). The....