TaxTMI 
TaxTMI 
2023 (1) TMI 1551
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....9, the assessee has filed this appeal on following grounds: "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals), NFAC has erred in treating the appeal as infructuous by holding that grounds of appeal do not emanate from the order u/s 143(3) but from the order u/s 143(1). Ld. CIT ought to have appreciated that as per settled judicial position, once regular assessment u/s 143(2) is commenced, summary proceedings u/s 143(1) is no longer valid. 2. On the facts and in the circumstances of the case and in law, Ld. CIT (A) erred in not appreciating that assessment order had been passed without considering the submissions made by the assessee and in the assessment order disallowance of Rs 7,94,51....
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....s 44AB. In Form No. 3CD, the auditors of assessee reported a disallowance on account of gratuity provision of Rs. 7,94,516/- at two places, one u/s 40A(7) and other u/s 43B since the same disallowance is clutched in both sections of Income-tax Act. While filing return of income, the assessee voluntarily made and declared disallowance u/s 43B. The case of assessee was selected for limited-scrutiny through notice u/s 143(2) dated 22.09.2019 to examine the claim of "Disallowance u/s40A(7)-Gratuity provision". While the scrutiny-proceeding was going on, the CPC, Bangalore issued intimation of summary-assessment u/s 143(1) dated 04.11.2019. In this intimation, the CPC, Bangalore retained a disallowance of Rs. 7,94,516/- u/s 43B already made by a....
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....,823/- u/s Chapter VI-A instead of the correct deduction of Rs. 2,56,323/- claimed by the assessee in the return of income [and even allowed by CPC in the intimation u/s 143(1)] and that too without speaking a single word in the body of assessment order. This way, there were two mistakes in the assessment-order passed u/s 143(3) i.e. (i) double disallowance of gratuity provision of Rs. 7,94,516/- and (ii) non-speaking disallowance of the deduction under Chapter VI-A by Rs. 1,37,500/- (2,56,323 -1,18,823) which caused serious grievance to the assessee. 4. Being aggrieved, the assessee filed appeal to Ld. CIT(A). The Ld. CIT(A) decided first-appeal vide order dated 06.05.2022 but did not grant relief to assessee. Now being aggrieved by ord....
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....instance of the assessee to make a regular assessment under Sub-section (2) of Section 143. The converse is not available; a regular assessment proceeding having been commenced under Section 143(2), there is no need for a summary proceeding under Section 143(1)(a) " [Emphasis added] (ii) Secondly, the Ld. AO has passed assessment-order dated 01.01.2021 u/s 143(3) just by upholding the intimation u/s 143(1) and thereby retaining the double disallowance of Rs. 7,94,516/-. Further, the Ld. AO has also committed a grave mistake of reducing deduction under Chapter VIA by Rs. 1,37,500/- without speaking a single word in the body of assessment-order. Ld. AR submits that the scrutiny assessment is a comprehensive-assessment and the Ld. ....
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....s but, however, could not contradict the submissions of Ld. AR. 7. We have perused the documents and observed that the Ld. CIT(A) has passed order of first-appeal on 06.05.2022 which is before the hearing-dates of 17.5.2022/19.05.2022 fixed by him. Ordinarily we have set aside the order of Ld. CIT(A) in such a situation and remanded the case to him for passing appeal-order afresh after hearing the assessee. But in the present case, the Ld. AO has passed a scrutiny-assessment order u/s 143(3), which is a comprehensive assessment as compared to summary-assessment u/s 143(1) and there are grave mistakes in the form of twin-additions viz. (i) retaining the double disallowance and (ii) reducing deduction under Chapter VI-A by a non-speaking o....