2026 (2) TMI 704

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....raised multiple grounds, however, the core issue arising in appeal relates to addition of an amount of Rs. 1284.66 crores on account of adjustments under Income Computation and Disclosure Standards ('ICDS' for short). 3. Relevant facts necessary for deciding this issue are, the assessee is a resident corporate entity stated to be engaged in the business of manufacturing and trading of agro chemicals-pesticides and plant nutrients, manufacturing and trading in seeds and soil conditioners and providing agri services. For the assessment year under dispute, the assessee filed its return of income on 25.11.2022, declaring total income of Rs. 232,26,45,090/-. While computing the total income, the assessee suo motu added back an amount of Rs. 8....

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....e total income, maintained the income as computed u/s. 143(1)(a) of the Act which included ICDS adjustment of Rs. 1284.66 crores made by the CPC. 5. Against the assessment order so passed u/s. 143(3) of the Act, the assessee preferred an appeal before ld. First appellate authority. In course of first appellate proceedings, the assessee again furnished a written submissions pointing out the mistake committed by CPC while making the adjustment in dispute and submitted that mistake so committed by CPC should have been rectified by A.O. while completing the assessment u/s. 143(3) of the Act. 6. Ld. First appellate authority, however, did not find the contentions of the assessee acceptable, observing as under: 8. Ground nos. 2 to ....

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....herwise also the adjustment made by the CPC on account of ICDS is under a factual misconception, hence, should have been rectified. He submitted, in course of scrutiny assessment proceedings u/s. 143(3) of the Act, though, the issue relating to such mistake was brought to the notice of the A.O., however, he totally ignored the submissions of the assessee. He submitted, even the first appellate authority committed gross error in rejecting assessee's contention on the reasoning that the adjustment made in an intimation u/s. 143(1)(a) of the Act could not be dealt in an appeal arising out of the assessment order passed u/s. 143(3) of the Act. He submitted, since upon initiation of proceedings u/s. 143(3) of the Act, the intimation issued u/s. ....

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..... Undisputedly, while processing the return of income u/s. 143(1)(a) of the Act, the CPC had made an adjustment of Rs. 1284,66,97,880/- on account of ICDS effect, as against the suo motu adjustment of Rs. 1,15,08,630/- made by the assessee. Undisputedly, while computing the income of the assessee in the assessment order passed u/s. 143(3) of the Act, the A.O. had incorporated the income computed by the CPC in the intimation issued u/s. 143(1)(a) of the Act which included the ICDS adjustment in dispute. Fact remains, in a Writ Petition filed in the Hon'ble Jurisdictional High Court, the assessee had challenged the intimation issued u/s. 143(1)(a) of the Act by CPC making ICDS adjustment in dispute. While disposing of the Writ Petition re....