TaxTMI 
TaxTMI 
2024 (6) TMI 1495
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....er: "1. The Hon'ble Commissioner of Income Tax (Appeal), Delhi- 42 [the Hon'ble CIT(A)] erred in facts and in law in not allowing carry forward of current year's loss of the Appellant to INR 93,045,891 from the returned loss of INR 414,163,099/- under the Act 2. The Hon'ble CIT (A) erred in facts and in law in giving directions to the Appellant and/or CPC/jurisdictional Assessing Officer to submit a reply issue notice for proposed adjustment, without concluding the matter on merits, which is beyond the powers of the Hon'ble CIT (A) 3. The Hon'ble CIT (A) erred in facts and in law in not holding that the order passed by the Ld. AO under section 154 read with section 143(1) of the Act, is bad....
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.... ('CCDs'), issued by the subsidiary company. In financial year 2021-22, relevant to the assessment year under dispute, the assessee had transferred its investments in equity shares and CCDs held in Indian subsidiary to a third party investor and incurred short term capital loss of Rs. 9,30,45,891/- and long term capital loss of Rs. 32,11,17,208/-. In the return of income filed for the impugned assessment year on 21.11.2022, the assessee declared income of Rs. 20,62,33,580/- and claimed carry forward of short term capital loss of Rs. 9,30,45,891/- and long term capital loss of Rs. 32,11,17,208/-. While processing the return of income filed by the assessee, the Centralized Processing Centre ('CPC'), though allowed car....
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....ssing the return u/s 143(1)(a) of the Act. He further held that since the application u/s 154 of the Act is in respect of an order u/s 143(1)(a) of the Act, for processing of return by the CPC through computerized system, without any human interference, therefore, no speaking order is contemplated in law at this stage. As regards assessee's contention that before making adjustment u/s 143(1)(a) of the Act no show cause notice was issued to the assessee, learned First Appellate Authority accepted it and issued the following directions to the CPC/Assessing Officer: "14.4 The language of proviso makes it clear that the requirement of giving intimation to the appellant before making an adjustment to the returned income/ loss is mandato....
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....s not been provided, he should have quashed the order passed by CPC and allowed assessee's claim or, at least, decided the issue on merits instead of remanding the matter to the CPC/Assessing Officer, as no such power of remand is vested with the First Appellate Authority. In support of his contention, learned counsel relied upon the following decisions: - Arun Kumar Bose v. ITO 158 taxmann.com 282 (Calcutta HC); - Sapphire Land Development (P) Ltd. v. DCIT 147 taxmann.com 50 (Mum Trib.); - ACIT v. Sabarigiri Trust 43 taxmann.com 19 (Cochin Trib.); - Arham Pumps v. DCIT [2022] 140 taxmann.com 204 (Ahmedabad - Trib.); - ITO v. Camellia Educare Trust 152 taxmann.com 304 (Kolkata-Trib.). 6. Learn....
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....ion 143(1)(a) of the Act, no adjustment shall be made u/s 143(1)(a) unless an intimation is given to the assessee of such adjustment either in writing or in electronic mode. The second proviso to Section 143(1)(a) says, the response received by the assessee on the show cause notice shall be considered before making any adjustment. In the facts of the present appeal, admittedly, no show cause notice in terms of first proviso to Section 143(1)(a) of the Act was issued by the CPC before carrying out the adjustment. In fact, learned First Appellate Authority has also accepted the aforesaid factual position. Thus, it is a proven fact on record that the assessee has been deprived of its valuable right of representation, thereby, the intimation is....
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....f the Act. 7.2 The next issue which arises for consideration is, whether the First Appellate Authority is justified in restoring the issue to the CPC/AO with a direction to issue a show cause notice to the assessee and pass a fresh intimation u/s 143(1)(a) of the Act. On going through the provisions of Section 250 of the Act, we are of the view that learned First Appellate Authority could not have issued such direction as section 250 read with section 251 of the Act does not vest any power with the first Appellate Authority to restore/remand the appeal to the AO. Even otherwise also, it is a fact on record that the assessee has claimed set off and carry forward of loss in a return of income filed u/s 139(1) of the Act within due date. Ne....