ITAT Cuttack: Intimation U/S 143(1) Not Logical for Defective ITR

The Income Tax Appellate Tribunal (ITAT), Cuttack Bench, has ruled in an appeal that an income tax return submitted with an error and subsequent notification u/s.143(1) is invalid.

ITAT made the mentioned observation when an appeal was filed before it through the taxpayer, as against the order of the CIT(A), National Faceless Appeal Centre (NFAC), Delhi, passed in DIN & Order No.ITBA/NFAC/S/250/2022-23/1043436040(1), on 14.06.2022, for the assessment year 2014-2015.

On the behalf of the taxpayer AR Shri Nihar Ranjan Biswal, CA has furnished its income return dated 14.01.2015, informing the assessee that the return it submitted was faulty and that, if the defect was not fixed, the return would be deemed invalid, and that the assessee had been served with the communication on August 21, 2015, he stated the taxpayer had not complied with the notice issued u/s.139(9) of the Income Tax Act, on 21.08.2015.

The AR further argued that the assessee was later served with an intimation under Section 143(1) of the Income Tax Act on March 14, 2016, indicating that some adjustments had been made and that because the assessee’s return was incomplete under Section 139(9) of the Income Tax Act and the taxpayer had not made the necessary corrections.

The return submitted by the taxpayer is therefore subject to being deemed invalid in light of the requirements of Section 139(9) of the Income Tax Act, and an intimation according to Section 143(1) of the Income Tax Act cannot be given on such a return.

Moreover, he argued that the intimation issued under Section 143(1) of the Income Tax Act on March 14, 2016, has to be revoked because CIT(A) affirmed it without taking the assessee’s viewpoint into account.

In his opposing reply, Shri M.K.Gautam, the CIT-DR, passionately supported the judgment of the Commissioner of Income Tax (Appeals), arguing that because the intimation was given under section 143(1) of the Income Tax Act, the taxpayer should be required to pay the demand as stated and that the assessee’s appeal is frivolous.

The ITAT Bench, composed of Arun Khodpia, the Accountant Member, and George Mathan, the Judicial Member, noted: We have evaluated the opposing arguments after listening to the opposing claims of both sides and studying the documents on record.

A review of the letter dated August 21, 2015, sent to the assessee makes it abundantly evident that the CPC had informed the assessee of the return’s flaws in accordance with Section 139(9) of the Act.

Read also: Pune ITAT: Benefit Will Not Be Permitted Due to Non-deposit of TDS U/S 143(1)

If the faults are not fixed, the assessee’s return would be deemed invalid, according to the notification, which was made quite clear in that regard.

It is true that the assessee has not fixed the problems. As a result, the return submitted by the assessee may be deemed void. ITAT Bench made a remark.

As a result of accepting the assessee’s appeal, the Cuttack ITAT determined that the intimation given under Section 143(1) of the IT Act on the same return on March 14, 2016, was also illegal and, as a result, was quashed.