CPC made a section 143(1)(a) adjustment without first putting the proposed adjustment to me. The department says my reply could not have changed anything. Does that save the intimation?
No. The Bombay High Court held that the first proviso to section 143(1)(a) is mandatory, so no intimation making an adjustment to the return can be passed unless the proposed adjustment is first intimated to the assessee and he is given a chance to respond. The Court rejected the department's argument that giving the intimation would have been an exercise in futility, pointing out that the assessee could, for example, have obtained an order condoning the delay in filing Form 10-IC. The intimation of 1 December 2025 was quashed and set aside, and the department was left free to issue the notice, consider the response and pass a fresh intimation.
Decided by the High Court (High Court of Bombay - B.P. Colabawalla and Firdosh P. Pooniwalla, JJ.) on 2026-02-02, reported as [2026] 183 taxmann.com 395 (Bombay); Writ Petition (L) No. 43004 of 2025. It bears on section 143(1)(a), section 143(1), section 115BAA of the Income Tax Act 1961, in Assessment & Scrutiny matters.
Centralised processing produces adjustments at scale, and the department's standard answer to a complaint about no prior notice is that the outcome was inevitable on the return as filed. This judgment removes that answer. The proviso says no adjustment shall be made unless the intimation of the proposed adjustment is given, and the Court treated that as mandatory language which does not admit of a case-by-case judgment about whether compliance would achieve anything. The illustration the Court used is worth carrying into your own reply: a taxpayer who has filed Form 10-IC late may in the meantime obtain condonation under section 119(2)(b), so the position at the date of the response need not be the position at the date of the return. The relief is a fresh start rather than a windfall - the department can redo the process properly.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner company had opted for the concessional rate of tax under section 115BAA. Form 10-IC, which is the form in which that option is exercised, was not filed by the due date; it was filed belatedly on 28 March 2025 along with the return of income. The return was processed by the Central Processing Centre, which denied the benefit of section 115BAA on the ground that the form was late and passed an intimation under section 143(1)(a) dated 1 December 2025 making the consequent adjustment. No notice of the proposed adjustment was given to the petitioner before that intimation was passed, although the first proviso to section 143(1)(a) requires such an intimation to be given in writing or in electronic mode. The company came to the High Court in a writ petition challenging the intimation. The department's answer was that a prior intimation would have made no difference on these facts, because the form had admittedly been filed late and nothing the company said in reply could have altered the outcome.
The Court quashed and set aside the intimation dated 1 December 2025. It held that the first proviso to section 143(1)(a) is mandatory: it provides that no adjustment shall be made unless an intimation of the proposed adjustment is given to the assessee, in writing or in electronic mode. Once that is a mandatory provision, no intimation order under section 143(1)(a) can be passed making any adjustment in the return filed by the assessee unless the proposed adjustment is first intimated to him and he has been given a chance to respond to it. The Court rejected the plea of futility, observing that there could very well be a case where, after belatedly filing the return, the assessee obtains an order condoning the delay in filing Form 10-IC, so it was incorrect to suggest that the intimation contemplated by the proviso would be an exercise in futility. On that ground alone the intimation was liable to be quashed, and the revenue was left free to issue a notice under the first proviso, consider any response and then pass a fresh intimation.
The Court read the first proviso as a prohibition rather than as a direction about good practice. Its language is that no adjustment shall be made unless an intimation of the proposed adjustment is given to the assessee in writing or in electronic mode, and the Court took the words at their ordinary force: the giving of the intimation is a condition precedent to the making of the adjustment. From that characterisation the rest followed, because a mandatory condition does not lend itself to an inquiry into whether observing it would have made a difference in the particular case. The Court nonetheless answered the department on its own ground, and did so with an example drawn from these facts. The company's difficulty was the late filing of Form 10-IC. Delay in filing that form is capable of being condoned, and an order condoning it could be obtained after the return has gone in. So a taxpayer given the opportunity the proviso requires may be able to place before the processing centre something that did not exist when the return was filed. That being possible, the premise of the futility argument fails: the response is not necessarily empty. The Court was careful about the consequence. It quashed the intimation for want of the notice, not for any view on whether the benefit of section 115BAA was due, and left the department free to start again by issuing the notice the proviso requires.
It is therefore incorrect to suggest that the intimation proposing an adjustment, as contemplated under the first proviso to Section 143(1)(a), would be an exercise in futility.
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Handle my notice → Ask a CA on WhatsAppNo. The Bombay High Court held that the first proviso to section 143(1)(a) is mandatory, so no intimation making an adjustment to the return can be passed unless the proposed adjustment is first intimated to the assessee and he is given a chance to respond. The Court rejected the department's argument that giving the intimation would have been an exercise in futility, pointing out that the assessee could, for example, have obtained an order condoning the delay in filing Form 10-IC. The intimation of 1 December 2025 was quashed and set aside, and the department was left free to issue the notice, consider the response and pass a fresh intimation. This was decided by the High Court (High Court of Bombay - B.P. Colabawalla and Firdosh P. Pooniwalla, JJ.) and bears on section 143(1)(a), section 143(1), section 115BAA of the Income Tax Act 1961. It is reported as [2026] 183 taxmann.com 395 (Bombay); Writ Petition (L) No. 43004 of 2025. Centralised processing produces adjustments at scale, and the department's standard answer to a complaint about no prior notice is that the outcome was inevitable on the return as filed. This judgment removes that answer. The proviso says no adjustment shall be made unless the intimation of the proposed adjustment is given, and the Court treated that as mandatory language which does not admit of a case-by-case judgment about whether compliance would achieve anything. The illustration the Court used is worth carrying into your own reply: a taxpayer who has filed Form 10-IC late may in the meantime obtain condonation under section 119(2)(b), so the position at the date of the response need not be the position at the date of the return. The relief is a fresh start rather than a windfall - the department can redo the process properly. If it applies to you, the first step is this: Check first whether any notice of the proposed adjustment was in fact issued under the first proviso and whether it reached you; the whole point turns on that.
The petitioner company had opted for the concessional rate of tax under section 115BAA. Form 10-IC, which is the form in which that option is exercised, was not filed by the due date; it was filed belatedly on 28 March 2025 along with the return of income. The return was processed by the Central Processing Centre, which denied the benefit of section 115BAA on the ground that the form was late and passed an intimation under section 143(1)(a) dated 1 December 2025 making the consequent adjustment. No notice of the proposed adjustment was given to the petitioner before that intimation was passed, although the first proviso to section 143(1)(a) requires such an intimation to be given in writing or in electronic mode. The company came to the High Court in a writ petition challenging the intimation. The department's answer was that a prior intimation would have made no difference on these facts, because the form had admittedly been filed late and nothing the company said in reply could have altered the outcome. The matter was decided on 2026-02-02 by the High Court (High Court of Bombay - B.P. Colabawalla and Firdosh P. Pooniwalla, JJ.). On those facts the High Court held as follows. The Court quashed and set aside the intimation dated 1 December 2025. It held that the first proviso to section 143(1)(a) is mandatory: it provides that no adjustment shall be made unless an intimation of the proposed adjustment is given to the assessee, in writing or in electronic mode. Once that is a mandatory provision, no intimation order under section 143(1)(a) can be passed making any adjustment in the return filed by the assessee unless the proposed adjustment is first intimated to him and he has been given a chance to respond to it. The Court rejected the plea of futility, observing that there could very well be a case where, after belatedly filing the return, the assessee obtains an order condoning the delay in filing Form 10-IC, so it was incorrect to suggest that the intimation contemplated by the proviso would be an exercise in futility. On that ground alone the intimation was liable to be quashed, and the revenue was left free to issue a notice under the first proviso, consider any response and then pass a fresh intimation.
The Court read the first proviso as a prohibition rather than as a direction about good practice. Its language is that no adjustment shall be made unless an intimation of the proposed adjustment is given to the assessee in writing or in electronic mode, and the Court took the words at their ordinary force: the giving of the intimation is a condition precedent to the making of the adjustment. From that characterisation the rest followed, because a mandatory condition does not lend itself to an inquiry into whether observing it would have made a difference in the particular case. The Court nonetheless answered the department on its own ground, and did so with an example drawn from these facts. The company's difficulty was the late filing of Form 10-IC. Delay in filing that form is capable of being condoned, and an order condoning it could be obtained after the return has gone in. So a taxpayer given the opportunity the proviso requires may be able to place before the processing centre something that did not exist when the return was filed. That being possible, the premise of the futility argument fails: the response is not necessarily empty. The Court was careful about the consequence. It quashed the intimation for want of the notice, not for any view on whether the benefit of section 115BAA was due, and left the department free to start again by issuing the notice the proviso requires. In the words reproduced by the source cited on this page: "It is therefore incorrect to suggest that the intimation proposing an adjustment, as contemplated under the first proviso to Section 143(1)(a), would be an exercise in futility." The decision followed or applied Rallis India Ltd. v. Central Processing Centre [2026] 183 taxmann.com 176 (Bombay).
It was decided by the High Court on 2026-02-02 and is reported as [2026] 183 taxmann.com 395 (Bombay); Writ Petition (L) No. 43004 of 2025. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 143(1)(a), section 143(1), section 115BAA, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Court quashed and set aside the intimation dated 1 December 2025. It held that the first proviso to section 143(1)(a) is mandatory: it provides that no adjustment shall be made unless an intimation of the proposed adjustment is given to the assessee, in writing or in electronic mode. Once that is a mandatory provision, no intimation order under section 143(1)(a) can be passed making any adjustment in the return filed by the assessee unless the proposed adjustment is first intimated to him and he has been given a chance to respond to it. The Court rejected the plea of futility, observing that there could very well be a case where, after belatedly filing the return, the assessee obtains an order condoning the delay in filing Form 10-IC, so it was incorrect to suggest that the intimation contemplated by the proviso would be an exercise in futility. On that ground alone the intimation was liable to be quashed, and the revenue was left free to issue a notice under the first proviso, consider any response and then pass a fresh intimation. It arises in Assessment & Scrutiny matters, on section 143(1)(a), section 143(1), section 115BAA of the Income Tax Act 1961, and was decided by High Court of Bombay - B.P. Colabawalla and Firdosh P. Pooniwalla, JJ.. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Plead the mandatory character of the proviso and ask for the intimation to be set aside on that ground alone, without arguing the merits of the adjustment. Meet the futility argument with something concrete you could have done or said - a condonation application, a rectification, a document - so the Court can see the response would have had content. Expect a fresh notice rather than the end of the matter, and prepare the substantive answer you will give when it comes.
Still good law. No appeal against this judgment, and no later decision considering it, was traced in searches run on 1 September 2026. It is recent - February 2026 - so the absence of later authority carries little weight either way. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The judgment was read on Indian Kanoon; the Bombay High Court's own copy was not reached. The assessment year is not stated in the text read, only the dates of the belated Form 10-IC and return (28 March 2025) and of the impugned intimation (1 December 2025). The Court did not decide whether the section 115BAA benefit was due, and nothing in this record should be read as deciding it. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Court quashed and set aside the intimation dated 1 December 2025. It held that the first proviso to section 143(1)(a) is mandatory: it provides that no adjustment shall be made unless an intimation of the proposed adjustment is given to the assessee, in writing or in electronic mode. Once that is a mandatory provision, no intimation order under section 143(1)(a) can be passed making any adjustment in the return filed by the assessee unless the proposed adjustment is first intimated to him and he has been given a chance to respond to it. The Court rejected the plea of futility, observing that there could very well be a case where, after belatedly filing the return, the assessee obtains an order condoning the delay in filing Form 10-IC, so it was incorrect to suggest that the intimation contemplated by the proviso would be an exercise in futility. On that ground alone the intimation was liable to be quashed, and the revenue was left free to issue a notice under the first proviso, consider any response and then pass a fresh intimation.
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My return was only processed under 143(1). Does that stop the department reopening it later?
I did not tick s.115BAA in the return and filed Form 10-IC late. Can I still get the concessional rate?
My refund is being held back because scrutiny is pending. Can the officer simply sit on it?
I let the 30 days to appeal my 143(1) intimation lapse. Can I still go to the PCIT under s.264?