AO Directed to Amend Intimation Under Section 143(1) Due to Rectifiable Mistake in Audit Report, Not Return.

The appeal was allowed by the ITAT Jodhpur, remanding the case to the AO for rectification. The tribunal recognized a rectifiable mistake in the audit report, not the return, leading to the discrepancy in the claimed accumulation amount. The decision was based on the principle that the intimation under section 143(1) did not constitute an assessment, and no contrary evidence was presented. The AO was directed to amend the intimation under section 143(1) accordingly, addressing the appellant's grounds.

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Issues Involved:
The appeal against the order of NFAC, Delhi under the Income Tax Act 1961 for A.Y. 2017-18.

Ground 1:
The CIT(A) confirmed the action of the assessing officer CPC under sections 154 and 143(1) of the Act, making prima facie adjustment to the total income of the appellant institution, which was contested by the appellant as not in line with the provisions of section 143(1)(a)(ii) of the Act.

Ground 2:
The CIT(A) was criticized for restricting the accumulation of income under section 11(2) at a lower amount than claimed by the appellant, despite evidence supporting the higher claim, leading to the confirmation of the adjustment under sections 143(1) and 154.

Ground 3:
The appellant requested the liberty to modify the grounds of appeal during the hearing.

Case Background:
The appellant, a trust registered under section 12A(a) of the Act, filed a return for A.Y. 2017-18 claiming accumulation of income under section 11(2) at Rs. 13,51,645, later corrected to Rs. 4,20,986 in an amended Form No. 10. The CPC's intimation under section 143(1) restricted the accumulation to Rs. 4,20,986, resulting in a tax liability of Rs. 1,37,998, which the appellant sought to rectify under section 154, but the AO did not accept. The CIT(A) upheld the AO's decision, leading to the present appeal.

Judgment:
After considering submissions and documents, it was acknowledged that the mistake in the audit report, not the return, led to the discrepancy in the claimed amount of accumulation. Citing a relevant ITAT Bangalore Bench case, it was concluded that the mistake was rectifiable under section 154, as the intimation under section 143(1) did not constitute an assessment. The absence of contrary evidence or judgments led to the acceptance of the appellant's grounds, directing the AO to rectify the intimation under section 143(1) accordingly.

Outcome:
The appeal of the assessee was allowed, and the matter was remanded to the AO for rectification as per the directions provided in the judgment.

This summary captures the issues involved, case background, judgment details, and the final outcome of the legal judgment delivered by the Appellate Tribunal ITAT Jodhpur.

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