ACULIFE HEALTHCARE PVT. LTD.,AHMEDABAD V. THE ACIT, CIRCLE-1(1)(1), AHMEDABAD

ITA 1997/AHD/2024

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Aculife Healthcare Pvt. Ltd. filed appeals against the rectification orders passed under section 154 of the Income Tax Act, 1961, for the Assessment Years 2020-21 and 2021-22. The rectification orders had disallowed certain claims and adjusted the refunds due to the assessee. The primary contention in the appeals was the non-service of the initial intimation under section 143(1), which was crucial for the validity of the subsequent rectification orders. The Tribunal examined the procedural compliance in issuing the intimation and found discrepancies, leading to the decision in favor of the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 102446 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2021-2022
• Other Referred Cases: Checkmate Services Pvt. Ltd. vs. CIT [2022] 143 taxmann.com 178 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Revised return; Depreciation; Rectification of order
• Section: 154; 143(1); 22

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Shri T.R. Senthil Kumar, Judicial Member And Shri Makarand Vasant Mahadeokar, Accountant Member Aculife Healthcare Pvt. Ltd. B-505, Commerce House-V, Prahladnagar Corporate Road, Ahmedabad-380051 PAN: AAMCA8542Q (Appellant) Vs Asst. Commissioner of Income Tax, Circle-1(1)(1), Ahmedabad (Respondent) Assessee Represented: Shri Hemanshu Shah, A.R. Revenue Represented: Shri Santosh Kumar, Sr. D.R. Date of hearing : 09-04-2025 Date of pronouncement : 17-04-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- These two appeals are filed by the Assessee as against two separate appellate orders both dated 30.09.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the rectification orders passed under section 154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Years 2020-21 & 2021-22. Since common issue is ITA Nos: 1996 & 1997/Ahd/2024 Assessment Years: 2020-21 & 2021-22 I.T.A Nos. 1996 & 1997/Ahd/2024 A.Ys. 2020-21 & 2021-22 Page No Aculife Healthcare Pvt. Ltd. vs. ACIT 2 involved in both the cases for the sake of convenience the same are disposed of by this common order. ITA No. 1996/Ahd/2024: 2. Brief facts of the case is that the assessee filed a Revised Return of Income for the Asst. Year 2020-21 on 31-03-2024 declaring total income Nil and claiming refund of Rs.53,57,317/-. The CPC computed the refund at Rs.52,96,280/-. Subsequently a rectification order was passed u/s. 154 of Act on 15-12-2022 assessing the total income at Rs.2,25,24,390/- thereby disallowing depreciation of Rs.2,20,85,844/- and late payment of Provident Fund of Rs.2,38,540/-. 3. Aggrieved against the same, assessee filed an appeal before Ld. CIT(A) who allowed the claim of depreciation but confirmed the disallowance on late payment of provident fund following Hon’ble Supreme Court Judgment in the case of Checkmate Services Pvt. Ltd. vs. CIT [2022] 143 taxmann.com 178 (SC). 4. Aggrieved against the rectification order, the assessee is in appeal before us that the Ld. CIT(A) erred in confirming the disallowance of late payment of Provident Fund. At the time of hearing, the Ld. Counsel Mr. Hemanshu Shah appearing for the assessee fairly conceded that this issue is covered against the assessee by the Hon’ble Supreme Court judgment in the case of Checkmate Services Pvt. Ltd. rendered on 12-10-2022. I.T.A Nos. 1996 & 1997/Ahd/2024 A.Ys. 2020-21 & 2021-22 Page No Aculife Healthcare Pvt. Ltd. vs. ACIT 3 5. Recording the same, the appeal filed by the Assessee in ITA No. 1996/Ahd/2024 is hereby dismissed. ITA No. 1997/Ahd/2024 for A.Y. 2021-22. 6. Brief facts of the case is that the assessee filed its original Return of Income for the Asst. Year 2011-12 on 25-02-2022 declaring total income Nil and claiming refund of Rs.45,76,848/-. The assessee filed Revised Return of Income on 29-03-2022. The CPC vide communication dated 14-04-2022 informed the assessee that there is inconsistency in the amount of profit of Rs.1,07,54,026/- chargeable to tax u/s. 41 of the Act. In response, vide email dated 15-04-2022 the assessee clarified the amount of profit chargeable to tax u/s. 41 of the Act of Rs.1,07,54,026/- as per Para 25 of Tax Audit Report is derived of “Other Income”. Note 29 in the Profit & Loss account for A.Y. 2020-21, the income of Rs.1,07,54,026/- is not excluded from business income. Thus income of Rs.1,07,54,026/- is offered to tax in the return filed for A.Y. 2021-22. Hence, there is no inconsistency. Thereafter the assessee was not served with any intimation u/s. 143(1) but rectification order u/s. 154 of the Act dated 08-11-2022 was passed reducing the refund claim to Rs.11,07,620/- as against the claim of Rs.45,76,850/- by making disallowance: (a) Business income u/s. 41 of the Act Rs. 1,07,54,026/- (b) Diallowance u/s. 36(1)(va) Rs. 33,25,771/-. 7. Aggrieved against the rectification order, assessee filed an appeal before Ld. CIT(A) who was partly allowed the appeal by deleting the I.T.A Nos. 1996 & 1997/Ahd/2024 A.Ys. 2020-21 & 2021-22 Page No Aculife Healthcare Pvt. Ltd. vs. ACIT 4 disallowance made u/s. 41 of the Act, however confirmed the addition on late payment of Provident Fund of Rs.33,25,771/-. 8. Aggrieved against the same, the assessee in appeal before us raising the following Grounds of Appeal: 1. In law and in facts and circumstances of the Appellant’s case, the Learned Commissioner of Income-tax (Appeals) has grossly erred in points of law and facts. 2. In law and in facts and circumstances of the Appellant’s case, the Learned Commissioner of Income-tax (Appeals) has grossly erred in confirming the disallowance of employee’s contribution towards Provident Fund amounting to Rs.2,38,540/-. 3. Your appellant reserves the right to add, alter, amend all or any of the above grounds of appeal as may be advised from time to time. 9. Ld. Counsel for the assessee submitted that the assessee was not served with the intimation order u/s. 143(1) so called dated 26- 07-2022 but passed the rectification order u/s. 154 of the Act dated 08-11-2022 reducing the refund to Rs.11,07,620/-. During the course of hearing, the Revenue was requested to verify and report the service of 143(1) order dated 26-07-2022 by the CPC, Bangalore 10. The Ld. Sr. D.R. replied by his letter dated 01-04-2025 as follows: “3 Further, the DDIT, CPC, Bengaluru in e-mail has mentioned that: \"Please find enclosed her with intimation u/s 143(1)/154 which are available as per CPC portal in aforesaid case for AY 2020-21 & 2021-22 Due to migration of CPC 1.0 to CPC 2.0 intimation u/s 143(1) for AY. 2021 22 could not be obtained. Once the same is made available by technical team of CPC, it will be forwarded to the AO\" I.T.A Nos. 1996 & 1997/Ahd/2024 A.Ys. 2020-21 & 2021-22 Page No Aculife Healthcare Pvt. Ltd. vs. ACIT 5 11. We have perused the rectification order dated 08-11-2022 in that there is a column “details of previous order to be rectified” wherein it is mentioned as “143(1) dated 26-07-2022” but it is without DIN number. This makes it very clear since there is no DIN allotted to the 143(1) intimation, the same to be treated as not passed and therefore not served on the assessee. 11.1. As per 2nd proviso to Section 143(1) of the Act no intimation under sub-section shall be sent after the expiry of nine months from the end of the financial year in which the return was filed. Further as per 1st proviso to Section 143(1) of the Act, the intimation shall be sent to the assessee declaring the loss assessed/adjusted but no tax, interest or fee payable or no refund due to the assessee. Since the intimation made u/s. 143(1) of the Act was not served on the assessee, therefore, there cannot be adjustment or rectification u/s.154 of the Act, consequently the additions made by CPC are liable to be deleted and the refund claimed by the assessee is to be allowed. 12. In the result, the appeal filed by the assessee is hereby allowed. Order pronounced in the open court on 17 -04-2025 Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 17/04/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue I.T.A Nos. 1996 & 1997/Ahd/2024 A.Ys. 2020-21 & 2021-22 Page No Aculife Healthcare Pvt. Ltd. vs. ACIT 6 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद "