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Judgment
PER VIKAS AWASTHY, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of Additional/Joint Commissioner of Income Tax (Appeals)-5, Mumbai [in short ‘the CIT(A)’] dated 07.01.2025, for Assessment Year 2018-19.
Shri Salil Kapoor, appearing on behalf of the assessee furnished a chart of dates and events to make his submissions. The same is extracted herein below:
| Date | Events |
| 30.11.2018 | ITR filed by the assessee u/s. 139(1) of the Act declaring gross total income of Rs.71,02,24,459/- |
| 16.10.2019 | Intimation u/s.143(1) of the Act determining gross total income of Rs.79,55,90,384/- |
| 22.09.2019 | Notice u/s. 143(2) of the Act issued |
| 18.11.2019 | Modified ITR filed u/s.92CD of the Act declaring gross total income of Rs.76,13,97,246/- |
| 16.03.2021 | Intimation u/s.143(1) of the Act on modified return determining gross total income of Rs.84,67,63,171/- |
| 12.08.2021 | Informed the AO about mistakes made by the CPC in modified return |
| 23.09.2021 | Assessment order passed u/s.143(2) |
| 07.01.2025 | Order of CIT(A) holding that intimation u/s.143(1) of the Act does not survive as it merges with the assessment order passedu/s.143(3) of the Act, therefore, appeal is not maintainable against intimation u/s.143(1) of the Act. |
The ld. Counsel pointed that in the present case after the AO issued notice u/s.143(2) of the Act on 22.09.2019, the CPC issued intimation u/s.143(1) of the Act on 16.10.2019. The AO while completing scrutiny assessment vide order dated 23.09.2021 took the base of total income as determined u/s.143(1) of the Act to make further additions in scrutiny assessment proceedings u/s.143(1) of the Act. The ld. Counsel for the assessee stated at Bar that the appeal of assessee against the assessment order dated 13.09.2021 is pending before the CIT(A). The assessee in said appeal has inter alia assailed the additions made in assessment order u/s.143(3) of the Act only. The additions/disallowances made by CPC in summary assessment u/s.143(1) of the Act were not challenged in the said appeal as those additions were not subject matter of proceedings u/s.143(2) of the Act.
Against the additions/disallowances made u/s.143(1) of the Act, the assessee filed appeal before the CIT(A). The CIT(A) dismissed appeal of the assessee holding that since the assessment was made in u/s.143(3) of the Act, the order u/s.143(1) of the Act merged with the assessment order passed u/s.143(3) of the Act, therefore, no appeal is maintainable against intimation u/s.143(1) of the Act dated 16.03.2021.
Per contra, Shri Dayainder Singh Sidhu, representing the department vehemently defended findings of the CIT(A) in rejecting appeal of the assessee as not maintainable. The ld. DR submits that once scrutiny assessment order is passed u/s.143(3) of the Act, summary assessment order made u/s.143(1) of the Act merges with the order passed u/s.143(3) of the Act. To support his contention, the ld. DR placed reliance on the decision rendered in the case of CIT vs. Gujarat Electricity Board, 260 ITR 84 (SC).
We have heard the submissions made by rival sides and have examined the orders of authorities below. This is a peculiar case, where CPC makes addition in summary proceedings u/s.143(1) during the pendency of scrutiny assessment proceedings. Undisputedly, notice u/s.143(2) of the Act for complete scrutiny assessment was issued to the assessee on 22.09.2019 and the assessment was completed vide order dated 23.09.2021. Parallelly, the CPC makes summary assessment proceedings u/s.143(1) of the Act vide order dated 16.03.2021. The assessee against the intimation u/s.143(1) of the Act dated 16.03.2021 filed appeal before the CIT(A) which was dismissed by the First Appellate Authority holding that the appeal is not maintainable as the summary assessment proceedings u/s.143(1) of the Act merges with scrutiny assessment order passed u/s.143(3) of the Act dated 23.09.2021. To come to such a conclusion, the CIT(A) relied on the decision of Hon’ble Apex Court in the case of CIT vs. Gujarat Electricity Board (supra). Before proceeding further, it would be apt to refer to the said decision of Hon’ble Apex Court. The relevant excerpts from the said decision are reproduced herein under:-
“5.Even otherwise, the view taken by the Gujarat High Court seems to be correct on principle. There is no dispute that section 143(1)(a) of the Act enacts a summary procedure for quick collection of tax and quick refunds. Under the scheme if there is a serious objection to any of the orders made by the Assessing Officer determining the income, it is open to the assessee to ask for rectification under section 154. Apart therefrom, the provisions of section 143(1)(a)( i) indicate that the intimation sent under section 143(1)(a) shall be without prejudice to the provisions of sub-section (2). The Legislature, therefore, intended that, where the summary procedure under sub-section (1) has been adopted, there should be scope available for the revenue, either suo motu or at the instance of the assessee to make a regular assessment under sub-section (2) of section143. The converse is not available; a regular assessment proceeding having been commenced under section143(2), there is no need for a summary proceeding under section 143(1)(a).”
[Emphasized by us]
From plain reading of the above decision of Hon’ble Apex Court it would be evident that where summary proceedings u/s.143(1) of the Act are invoked, the option is available to the department for making regular assessment u/s.143(3) of the Act. Where the regular assessment proceedings have been initiated by the department by issuance of notice u/s.143(2) of the Act, there is no requirement for summary proceedings u/s.143(1) of the Act. The said decision in fact supports the case of assessee. In the instant case, the CPC makes summary assessment u/s.143(1) of the Act during the pendency of scrutiny assessment proceedings. The AO had issued notice u/s.143(2) of the Act on 22.09.2019 and thereafter the CPC concludes summary proceedings u/s.143(1) of the Act on 16.03.2021. We find substance in submissions made by ld. Counsel for the assessee with respect to maintainability of appeal against summary assessment made u/s.143(1) of the Act, in the present facts of the case. Without commenting on merits of the additions, we deem it appropriate to restore this appeal back to the file of CIT(A) for denovo adjudication, after affording reasonable opportunity of making submissions to the assessee, in accordance with law.
Liberty is granted to the assessee to raise all legal/jurisdictional grounds before the First Appellate Authority. The CIT(A) shall decide the appeal of assessee including legal/jurisdictional grounds, if any by passing a speaking order.
In the result, impugned order is set aside and appeal of the assessee is allowed for statistical purpose.