Passing Intimation u/s 143 without Reasonable Opportunity to Taxpayer Deemed Unlawful: ITAT against AO [Read Order]

The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that passing intimation under Section 143 of the Income Tax Act, 1961 without affording the taxpayer a reasonable opportunity is deemed unlawful, opposing the action of the Assessing Officer (AO).

 The assessee filed its return of income electronically under section 139(1) of the Income Tax Act on 15.02.2021. The assessee adjusted the loss during the year in house property amounting to Rs.87,143/-, which was set off with the long-term capital gain and the business loss of Rs.6,578/- which was also adjusted with the long-term capital gain.

During the processing of the return under Section 143(1), the  Assessing Officer assessed the total income of the assessee at Rs.2,77,370/- by not allowing loss from house property to be set off against capital gains without giving any intimation to the assessee and rejected the loss from house property amounting to Rs.87,143/-

Mrs.  Puja Somani, argued that the assessee claimed the loss amounting to Rs.87, 143/- in the return of income, which was reflected in page 73 of the paper book. During the year, the intra-head adjustment of the loss in respect of house property and the business loss was duly adjusted with the capital gain, which was permitted under Section 71(2) of the Income Tax Act.

Further argued that the Revenue has contravened the provision to Section 143(1) of the Income Tax Act and without giving reasonable opportunity to the assessee rejected the loss claimed in the return of income.

Mr. P.P. Barman, on the other hand, representing the revenue vehemently argued by relying on the orders of revenue authorities and prayed that the order of CIT(Appeals) be upheld.

The two member bench of the tribunal comprising Rajesh Kumar ( Accountant member) and Anikesh Banerjee ( Judicial member) observed that the assessee has claimed this loss in the return of income, which was rejected by the Assessing Officer without giving reasonable opportunity to the assessee and issued intimation under Section 143(1) of the Income Tax Act, 1961

Accordingly, the ITAT relied on the order of this Tribunal in the case of Camellia Educare Trust (supra) and treated the intimation, passed by the Assessing Officer under Section 143(1) as bad in law. Accordingly, the loss claimed by the assessee amounting to Rs.87,143/- was liable to be allowed, and the appeal filed by the assessee was allowed.

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