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of <h1>Tribunal rejects adjustment under sec 143(1)(a)(vi), emphasizes compliance with tax assessment guidelines</h1> <h3>Jayashree Virendrasingh Thakur Versus ITO, Ward-6 (1), Pune</h3> Jayashree Virendrasingh Thakur Versus ITO, Ward-6 (1), Pune - TMI Issues Involved:The judgment involves issues related to the assessment year 2017-18, specifically concerning the application of sections 44AD and 44ADA, the adjustment made under section 143(1)(a)(vi) of the Income Tax Act, and the rectification orders passed by the Assessing Officer.Details of the Judgment:Issue 1: Adjustment under section 143(1)(a)(vi)The assessee declared total income and gross receipts under section 44AD, which exceeded the stipulated minimum rate. The Intimation u/s. 143(1) made an adjustment based on inconsistency in amounts between the return and Form 26AS. The CIT(A) upheld the addition, but the Tribunal found the adjustment unwarranted. It noted that the provision under section 143(1)(a)(vi) applied only for the relevant assessment year and that the assessee's gross receipts were not omitted or understated. The Tribunal held that the adjustment was in violation of Instruction No.10/2017 and overturned the CIT(A)'s decision.Issue 2: Rectification OrdersThe assessee filed a rectification application against the initial Intimation u/s. 143(1), stating the incorrect application of section 44ADA. The AO rectified the order, but later issued another rectification holding the receipts as professional under section 44ADA. The CIT(A) dismissed the appeals against both rectification orders. The Tribunal, after overturning the adjustment under section 143(1)(a)(vi), set aside the rectification orders as they were based on the incorrect adjustment. Consequently, both appeals were allowed.In conclusion, the Tribunal held that the adjustment made under section 143(1)(a)(vi) was unjustified, as the assessee's declaration under section 44AD did not warrant such an adjustment. The rectification orders were set aside in light of the incorrect adjustment. The judgment provides clarity on the application of provisions related to presumptive income schemes and the importance of adhering to relevant instructions and guidelines in income tax assessments.
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