ITAT Deletes Rs. 1,284.66 Crore ICDS Adjustment After HC Quashes 143(1) Intimation
M/s Rallis India Limited, engaged in agro-chemicals and allied agri-services, filed its return for AY 2022–23 declaring income of Rs. 232.26 crore and made a suo motu ICDS adjustment of Rs, 1.15 crore. While processing the return under Section 143(1), the CPC made an ICDS adjustment of Rs. 1,284.66 crore, determining total income at Rs. 1,515.81 crore.
The assessee challenged the adjustment through rectification, appeal, and a writ petition before the High Court. Meanwhile, in assessment under Section 143(3), the Assessing Officer adopted the income as computed in the 143(1) intimation. The High Court quashed the ICDS adjustment made in the 143(1) intimation.
Issue Raised: Whether an ICDS adjustment made under Section 143(1) and adopted in a Section 143(3) assessment can survive after the jurisdictional High Court has quashed the intimation.
Tribunal’s Ruling: The Bench of the ITAT held that once the High Court had quashed the intimation under Section 143(1) insofar as it related to the ICDS adjustment, the same could not be sustained in the assessment framed under Section 143(3).
The Tribunal observed that the Assessing Officer had merely carried forward the income computed in the 143(1) intimation, including the impugned ICDS addition. Since the very foundation was set aside by the jurisdictional High Court, consequential relief had to follow in the assessment order.
Therefore, the Tribunal directed deletion of the ICDS adjustment of Rs. 1,284.66 crore from the income assessed under Section 143(3). The grounds relating to interest were treated as consequential. The appeal was allowed.
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