BANDO INDIA PVT LTD ,GURGAON VS. ADDL JCIT A-9, MUMBAI , MUMBAI, ITA 4855/DEL/2024
In a recent judgment dated 18 February 2025, the Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘A’ addressed a key procedural issue: whether an assessee’s appeal against an intimation under Section 143(1) remains maintainable once a regular assessment under Section 143(3) is completed.
In ITA No. 4855/Del/2024, the Tribunal ruled in favour of the assessee, Bando India Pvt. Ltd., holding that if a particular issue is not discussed or adjudicated in the 143(3) assessment, it does not merge with the earlier 143(1) intimation, and a separate appeal against the intimation is maintainable.
Background of the Case
- Assessee: Bando India Pvt. Ltd.
- Year: A.Y. 2018–19
- Issue: Incorrect adjustment made in the Intimation under Section 143(1).
- The assessee filed a rectification application under Section 154, which remained undecided.
- Later, a limited scrutiny assessment under Section 143(3) was completed, but the issue in the rectification application was not addressed.
- The assessee filed an appeal against the 143(1) intimation, which was dismissed by JCIT(A) citing delay of 1014 days and non-maintainability due to a subsequent 143(3) order.
Key Arguments & Tribunal Findings
1. Condonation of Delay (1014 Days)
- The Tribunal condoned the delay, holding that since the assessee was pursuing an alternate remedy through rectification (which remained undecided), the delay was justified and unintentional.
- ITAT emphasized that litigants should not suffer for administrative inaction and cited principles of substantial justice over technicality.
2. Maintainability of Appeal Against Section 143(1)
- The JCIT(A) had held that once an order under Section 143(3) is passed, the 143(1) intimation merges with it.
- However, ITAT noted that the 143(3) order did not adjudicate the issue raised in the intimation and rectification petition.
- It was observed that mere adoption of figures from 143(1) in the 143(3) order does not amount to merger, unless the issue is specifically addressed.
Key Legal Precedents Cited
- Areca Trust v. CIT(A), NFAC [(2024) 117 ITR (Trib) 264 (Bangalore ITAT)]:
Held that merger doctrine does not apply where the 143(3) order does not discuss the 143(1) issue. - Orient Craft Ltd. v. DCIT [158 Taxmann.com 1124 (Delhi ITAT)]:
Reaffirmed that issues not adjudicated in the 143(3) order remain open for separate appeal.
Conclusion & Implications
This decision is a big relief for taxpayers, especially those facing similar procedural dilemmas in rectification delays or technical defaults. The ITAT reaffirms that:
- Delays caused by pending rectification can be a valid reason for condonation.
- A limited scrutiny assessment does not mean blanket coverage of all earlier issues.
- Non-discussed issues in 143(3) don’t merge and can still be challenged under 143(1) appeal.