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TMI Blog2024 (10) TMI 1642X X X X Extracts X X X X X X X X Extracts X X X X ..... er referred to as CIT (A), erred both in law and in the facts and circumstances of the case to have dismissed the appeal. 2. For that without prejudice to any other ground taken, the Ld. CIT (A) erred both in law and in the facts and circumstances of the case to have shied away and avoided adjudicating on the aspect of correct computation of Total Income even after recording cognizable errors and anomalies within his own order pertaining to the originating order passed by Asst. Director of Income tax, CPC, Bangalore, hereinafter referred to as "AO" u/s 143(3), as well as when the Ld. CIT(A) had cogent grounds and reasons to do the same. 3. For that without prejudice to any other ground taken, the Ld. CIT (A) erred both in law and in the facts and circumstances of the case to not have dealt with and arrived at determination of Total Income, in spite of clear, unambiguous narrative mentioned within the order u/s 143(3) itself as well as the documents and submissions submitted before him on 22/09/2023 and 23/02/2024 and the Assessing Officer, couching his plea on the aspect that since the appellant has already preferred rectification petition u/s 154, "the AO shall be at liberty t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(1) on 22/09/2022 against which both appeal before CIT(A) and rectification u/s 154 before AO were filed and were/are pending disposal before the order u/s 143(3) was passed. 9. For that without prejudice to any other ground taken, the Ld. CIT(A) erred both in law and in the facts and circumstances of the case to not have appropriately dealt with fact in his order, that the AO acted in the manner he has, by simply referring to intimation u/s 143(1) he blatantly added income of Rs 2,26,77,60,000/-, which as per Balance Sheet Note No. 35(a) exhibits list of Contingent Liabilities, which the assessee neither ever claimed deduction nor ever expensed off it in its Accounts and is only shown as a disclosure as per statute and hence the question of it being added back cannot arise at all. 10. For that without prejudice to any other ground taken, the Ld. CIT(A) erred both in law and in the facts and circumstances of the case to have ignored the fact that the AO denied natural justice to the assessee in as much as amongst other issues, the AO never even intimated assessee and/or enquired from the assessee as to the import and impact of contingent liability which, he in his wisdom dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken, the Ld. CIT(A) erred both in law and in the facts and circumstances of the case in not taking appropriate cognizance of the fact that the AO within his order u/s 143(3) in Para 4, NOT APPLICABLE wherein AO is to state details of CASES WHERE VARIATION IS MADE, but strangely in Para 5, Sl 2, AO goes on to state Income as computed u/s 143(1)(a) Rs. 2,23,14,77,950/- and adopts the same as assessed income without any discussion or reference in the assessment order. 17. For that without prejudice to any other ground taken hereinbefore and hereinafter, the Ld. CIT(A) erred both in law and in the facts and circumstances of the case to not have appropriately taken cognizance of the fact that the AO had denied natural justice by not confronting the assessee with AO's intention to add to income an addition made u/s 143(1) which is under appeal before CIT(A) as well as under application for rectification u/s 154 before AO, both pendente lite and without going into the issue of the addition of contingent liability when AO had the full opportunity to do so in the scrutiny proceedings. 18. For that without prejudice to any other ground taken hereinbefore and hereinafter, the Ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 022 declaring total income at 'Nil' as mentioned in the assessment order. However, the assessee contends as per the statement of fact filed before the Ld. CIT(A) that "the Assessee company filed its return for the Assessment Year 2021-22 vide Acknowledgement Number 938675410170122 on 17.01.2022, well within the extended due date for filing of return which stood extended till 15.03.2022, declaring Loss of Rs. 36282050 and carry forward of such loss and claiming refund of Rs. 144150124 arising out of TDS and TCS effected for Rs. 110856751 and Rs. 793373, respectively along with Advance Tax paid for Rs. 32500000. Hence refund of Rs. 144150124 with interest stood payable to the Assessee." The return of the assessee has been processed and income computed u/s 143(1)(a) of the Act on 22.09.2022 at the total income of Rs. 223,14,77,950/- raising a demand of Rs. 81,85,97,786/-. Against this intimation, the assessee filed an appeal before the Ld. CIT(A) on 18.10.2022 and rectification petition u/s 154 of the Act through online grievance before CPC-ITR 27.10.2022 and rectification petition u/s 154 of the Act through online grievance before the Ld. AO NaFAC on 04.11.2012, which are sti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ground No. 1, 2, 3 & 4 1. For that without prejudice to any other ground taken herein below the Ld. Asst. Director of Income tax, CPC, Bangalore, hereinafter referred to as AO erred both in law and in the facts and circumstances of the case to have passed the assessment order us 143(3) of the Income Tax Act, 1961 on 26th December, 2022, determining Total Income at Rs. 2231477950 as against returned loss of Rs. 36282050 and demanding net payment of income tax and interest of Rs. 818597786 whereas refund of Rs. 144150121 is due to the assessee with interest, without conforming to the laws of the land and hence the same ought to be quashed and set aside. 2. For that without prejudice to any other ground taken hereinbefore and hereinafter, the AO erred both in law and in the facts and circumstances of the case to have stated in order u/s 143(3) that the assessee has filed NIL return of income whereas the assessee had filed return of loss for Rs. 36282050 and carry forward of loss for similar amount. 3. For that without prejudice to any other ground taken hereinbefore and hereinafter, the Ld. AO erred both in law and in facts and circumstances of the case to have stated within hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... precede the order of scrutiny but should also merge in that. The income/loss computed in the computation sheet annexed with order u/s 143(3) has already been sought to be subjected to rectification by the appellant assessee by virtue of application u/s 154 before the AO. The appellant assessee has already done that. Since the scrutiny assessment was completed considering the reason for selection of the case, the AO shall be at liberty to consider the adjustments under the various sections of the Act should any discrepancy be found. Ground No. 5,6,7,8,9, & 10 5 For that without prejudice to any other ground taken hereinbefore and hereinafter, the Ld. AO erred both in law and in the facts and circumstances of the case to have denied natural justice by not confronting the assessee with his intention to add to income an addition made u/s 143(1) which is under appeal before CIT(A) as well as under application for rectification u/s 154 before AO, both pendente lite and without going into the issue of the addition of contingent liability when he had the full opportunity to do so in the scrutiny proceedings. 6. For that without prejudice to any other ground taken hereinbefore and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scussed above the AO is directed to verify the claim of the appellant as per law and the same may be allowed if the said expenses and deductions pertains to this relevant year under consideration for which the claims, has been made Ground No. 11 & 12 11. For that without prejudice to any other ground taken hereinbefore and hereinafter, the Ld Assessing Officer erred both in law and in the facts and circumstances of the case in invoking Section 234A, 2348 and Section 234C of the Income Tax Act. 1961 on disputed additions and levying interest of Rs. 19068525 Rs. 133479675 and Rs. 30432052 respectively on the assessee whereas the assessee had filed a return of loss for Rs. 36282050 well within the extended time of filing its return and has a case of refund for Rs. 144150124 12 For that without prejudice to any other ground taken hereinbefore and hereinafter, the Ld. Assessing Officer erred both in law and in the facts and circumstances of the case in not passing order of refund for Rs. 144150124 along with interest Charging of interest u/s 234A, 234B & 234C and issuance of refund is concerned. they are consequential to the addition made and on the income assessed, therefore not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de, the intimation was subsumed in the order under section 143(3) of the Act and the Ld. CIT(A) ought to have decided the issue and granted relief to the assessee. In the case of The South India Club Mandir Marg, Vs. Income Tax Officer Ward Exemption 2(3), New Delhi I.T.A. No. 354/Del/2024 ITAT Delhi Bench 'G' order dated 22.05.2024 relied upon by the assessee, though it is mentioned that the intimation order u/s 143(1) merged with the regular assessment passed u/s 143(3) of the Act but the issue was denial of registration under section 12A of the Act and the order is distinguishable on facts as is extracted below: 10. Considered the rival submissions and material placed on record. We observe that the issue raised by the assessee that the order passed u/s 143(1) of the Act, otherwise called as intimations, in which the CPC has denied the benefit claimed u/s 11 of the Act with the observation that the audit report in form 10B was not filed on time. This is fact on record that the assessee has not filed the form 10B along with the return of income due to the fact that it did not had the registration u/s 12A, and the assessee was claiming the benefits under the concept of mutuality. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiated u/s 143(3) of the Act. Therefore, the admitted fact that the appeal against the intimation is infructuous. The grievance of the assessee is that Ld CIT(A) has not stopped with the findings but gave findings on the merits. After considering the submissions, we are also of the view that the findings on allowability u/s 11 is uncalled. Particularly when the issue under consideration is under challenge before another Appellate Authority. 13. The next issue raised by the Ld AR is, the assessee was granted the 12A registration on 5.1.2021 and the notice u/s 143(2) was issued on 22.09.2019. At the time of grant of registration, the assessment was pending and the same was passed only on 8.2.2021. That is subsequent to grant of registration i.e., on 5.1.2021. He submitted that the assessee is eligible to claim exemption u/s 11 for the impugned assessment year also. This is accepted fact on record that the assessee is eligible to claim exemption after the introduction of first proviso to sec.12A(2) of the Act with the applicable conditions in Finance Act 2018. Since there is no change in the objects and activities in the case of the assessee, there is no doubt that the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 143(3). The order passed under section 143(1)(a) ceased to be operative and merged in the final order. [Para 12] {emphasis supplied} In the case of Hindustan Aeronautics Ltd. v. CIT [2000] 243 ITR 808 / 110 Taxman 311, the Apex Court opined that where the Legislature intended to make a distinction as to where there will be no merger, the Legislature has made express provision therefor. There is no provision in section 143 that notwithstanding an order having been passed under section 143(3), an order passed under section 143(1) shall continue to subsist. [Para 15] Section 154(1A) provides that the rectification has to remain restricted to the matter which has not been considered and decided either in appeal or revision. There is no reason why the same restriction would not apply to a summary assessment and regular assessment particularly when the appropriation to contingency reserve was allowed under section 143(1)(a ) but disallowed under section 143(3). [Para 16] It followed that the effective and operative order was the one under section 143(3) and, therefore, the question of seeking rectification of the order under section 143(1)(a) could never arise. [Para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ger. An order refusing special leave to appeal does not stand substituted in place of the order under challenge. All that it means is that the Court was not inclined to exercise its discretion so as to allow the appeal being filed. (v) If the order refusing leave to appeal is a speaking order, i.e., gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of article 141. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the Court, Tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the Supreme Court being the Apex Court of the country. But, this does not amount to saying that the order of the Court, Tribunal or authority below has merged in the order of the Supreme Court rejecting special leave petition or that the order of the Supreme Court is the only order binding as res judicata in the subsequent proceedings between the parties. (vi) Once leave to appeal has been granted and a ..... 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