No Section 143(1) Adjustment Without Prior Intimation to Assessee

Case Details: Bax India Ventures (P.) Ltd. vs. Central Processing Centre - [2026] 183 taxmann.com 395 (Bombay)

Judiciary and Counsel Details

B.P. Colabawalla & Firdosh P. Pooniwalla, JJ.
P.J. Pardiwalla, Sr. Adv. & Jeet Kamdar, Adv. for the Petitioner.
Vikas T. Khanchandani, Adv. for the Respondent.

Facts of the Case

The assessee filed its return of income and claimed the benefit of section 115BAA. To avail the benefits of this section, it was mandatory for the assessee to file Form 10-IC by the due date of filing the return of income under section 139(1). Admittedly, the return was filed by the assessee belatedly under section 139(8A), along with Form 10-IC.

Since Form 10-IC was not filed by the due date as contemplated under section 139(1), the adjustment was made by the CPC under section 143(1)(a). The assessee filed an instant writ petition seeking to quash the intimation issued under section 143(1)(a) on the ground that no such intimation was given prior to making the adjustment.

High Court Held

The Bombay High Court held that before any adjustment is made under section 143(1)(a), an intimation is to be given to the assessee of such adjustment, either in writing or in electronic mode. This is clearly stipulated by the first proviso to section 143(1)(a). The second proviso to section 143(1)(a) further stipulates that the response received from the assessee, if any, to any intimation issued under the first proviso, has to be considered before making any adjustment. If no response is received from the assessee within 30 days, the department may make the adjustment.

In the present case, admittedly, no intimation was given to the assessee as contemplated in the first proviso to section 143(1)(a). The first proviso is clearly mandatory in nature, as it clearly stipulates that no adjustment ‘shall be made’ unless an intimation is given to the assessee of such adjustment either in writing or in electronic mode. Once this is a mandatory provision, no intimation order under section 143(1)(a) can be passed, making any adjustment in the return of income filed by the assessee, unless such proposed adjustment is first intimated to the assessee and he has been given a chance to respond thereto.

Since no intimation as contemplated under the first proviso to section 143(1)(a) was ever issued to the assessee, the intimation was to be quashed.