TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1427
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.... has claimed LTCG on sale of garage i.e. Rs. 20 lakhs and long term capital loss on sale of residential house property situated at B/3505, Oberoi Exquisite, Mumbai of Rs. 82,95,964/-. The assessee has set off a part of the long term capital loss against LTCG of Rs. 20 lakhs and had claimed carry forward of balance loss of Rs. 62,95,964/-. The return was processed by the learned Deputy Commissioner of Income Tax (CPC) wherein he has allowed the set off, of the Long term capital loss with the Long Term Capital Gain as stated above, but has not determined the Long Term Capital Loss in the current year amounting to Rs. 62,95,964/- to be carried forward to subsequent years. 3. Aggrieved by the said intimation, the assessee filed the appeal before the Ld. CIT(A) who has dismissed the appeal vide order dated 24.02.2025 while observing in para no. 7.1 as extracted below:- "7.1 Ground no.01 raised by the appellant that the learned DCIT (CPC), Bengaluru has not determined the long term capital loss in the current year amounting to Rs. 62,95,964/- to be carried forward which is adjudicated on merit of the case, facts, submission filed by the appellant and material available on record, as u....
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.... objected for raising the legal ground first time in the appeal before the Tribunal. On the other hand, Ld. AR submitted that the intimation order dated 04.04.2019 passed u/s 143(1) of the Act by the Assistant Director of Income Tax (CPC) is in violation of section 143(1) of the Act and is bad in law, and therefore it should be quashed. Ld. AR filed written arguments wherein it was argued that the intimation order dated 04.04.2019 which was upheld by Ld. CIT(A) is bad in law because the claim of carry forward of long term capital loss is beyond the scope of adjustments specified under section 143(1)(a) and therefore the order dated 4th April 2019 passed under section 143(1) should be quashed as ab initio void and bad in law. It is also argued that prior to making of such adjustment, no prior intimation was given to the Assessee thus violating the requirement of proviso to section 143(1)(a) and therefore, on this ground also the intimation order passed under section 143(1) should be quashed. The written arguments filed by the assessee are extracted below:- 1. The issue in the captioned appeal relates to the claim for carry forward of Long-term Capital Loss claimed by the Appellant....
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....viso 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 issued w/s 143(1)(a) of the Act suffers from gross violation of rules of natural justice. 4. It is submitted that by way of Ground No. 1 of the Assessee's appeal before Your Honour, the Assessee seeks to challenge the validity of intimation order dated 4th April 2019 passed under section 143(1) of the Act. Though the said ground was not raised before the CIT(A), it is respectfully submitted that the ground raised by the Assessee challenging the validity of intimation order passed under 143(1) of the Act is a pure legal issue and does not require any fresh investigation of facts. In this regard, reliance is placed on the decisi....
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....can be raised first time before the Tribunal. In this regard, Ld. AR relied on the judgment of Hon'ble Supreme Court in the case of the NTPC Ltd (supra) as noted above. Therefore, Ld. AR argued that the claim of long term capital loss cannot be rejected by way of intimation order passed u/s 143(1) and it is purely a legal question and as such should be adjudicated by the Tribunal in favour of the assessee. 7. On merit, Ld. AR argued that all the necessary documents were submitted before the AO with respect to long term capital gain and long term capital loss claimed by the assessee in the ITR which has not been considered by the revenue authorities and submitted that the intimation order dated 04.04.2019 passed u/s 143(1) of the Act be quashed and the appeal of the assessee be allowed by directing the AO to allow the carry forward of long term capital loss of Rs. 62,95,964/-. 8. On the other hand, Ld. DR relied on the order of Ld. CIT(A) and submitted that Ld. CIT(A) has rightly dismissed the appeal of the assessee because the assessee has not furnished the necessary documents before the revenue authorities. With respect to challenging to the validity of the intimation order, Ld.....
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....er the heading "C.-Deductions in respect of certain incomes", if] the return is furnished beyond the due date specified under sub-section (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return: Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode: Provided further that the response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be made: Provided also that no adjustment shall be made under sub-clause (vi) in relation to a return furnished for the assessment year commencing on or after the 1st day of April, 2018;" 11. It is thus clear from the provision of Section 143(1)(a) of the Act as reproduced above that no such adjustment as mentioned in the said section including the disallowance of loss claimed shall be made unless an intimation is given to the assessee of such adjustment either in writing or in electroni....
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....earned 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 issued u/s 143(1)(a) of the Act suffers from gross violation of rules of natural justice." Thus while allowing the appeal, the Delhi Tribunal directed the AO to allow the assessee's claim of carry forward of long term capital loss. 13. It is to be noticed that the legal ground regarding violation of first proviso of section 143(1)(a) of the Act by not sending the intimation, was not raised before the first appellate authority and has been raised first time before the Tribunal, therefore the concerned revenue authorities could not get the opportunity to rebut the same averment of the assessee and was required to ascertain from the assessment record as to whether the intimation order was communicated in compliance of first proviso of section 143(1)(a) of the Act or not. Further, we notice that the ITR with other documents has not been submitted by the assessee before us and in the absence of ITR and other documents, it cannot be ascertained if the long term capital l....