Debatable deduction computation cannot be adjusted under prima facie processing; the issue must go to regular assessment.

A debatable issue on computation of deduction under section 80HHC could not be adjusted as a prima facie correction under section 143(1)(a) of the Income-tax Act, 1961. Because the treatment of section 80HHC had been subject to differing judicial views, the Assessing Officer was required to examine the claim in regular assessment proceedings under section 143(2) or section 143(3), where the issue could be considered on merits. The impugned adjustment was therefore not permissible under section 143(1)(a), and the assessee succeeded on that issue.

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Issues: Whether the Assessing Officer could invoke section 143(1)(a) of the Income-tax Act, 1961 to adjust the deduction under section 80HHC by reducing profits on account of the deduction admissible under section 32A.

Analysis: Section 80HHC had undergone several changes and the point was debatable in view of the judicial treatment of the provision. In such circumstances, the adjustment could not be treated as a permissible prima facie adjustment under section 143(1)(a). The matter required consideration in regular assessment proceedings under section 143(2) or section 143(3), where the Assessing Officer could examine the claim on merits.

Conclusion: Section 143(1)(a) could not be invoked for the impugned adjustment, and the assessee succeeded on the issue.

Ratio Decidendi: A debatable question concerning computation of deduction cannot be decided by way of prima facie adjustment under section 143(1)(a) of the Income-tax Act, 1961 and must be left to regular assessment.

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