2024 (7) TMI 633

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.... issue, namely whether a payment made towards environmental compensation is to be construed as penal in nature or just a payment in compensatory in nature. 3. The admitted facts are that the assessee has filed its return of income. It has debited an expenditure of Rs. 64,70,000/-, which was paid on the directions of the Central Pollution Control Board for violating environmental norms. The assessee has claimed this payment as compensatory in nature, which ought to have been allowed it. 4. The ld. Assessing Officer while processing the return under section 143(1) disallowed this claim of the assessee and appeal to the ld. Addl./JCIT(Appeals)-12, Mumbai did not bring any relief to the assessee. 5. With the assistance of ld. Representatives....

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.... the second stage, a certain percentage of the tax returns are selected for scrutiny/audit on the basis of the probability of detecting tax evasion. At this stage, the tax administration is concerned with the verification of the income. In India, the scheme of summary assessment being in force since the 1st day of June, 1999 does not contain any provision allowing for prima facie adjustment. The scope of the present scheme is limited only to checking as to whether taxes have been correctly paid on the income returned. Under the existing provisions of section 143(1), there is no provision for correcting arithmetical mistakes or internal inconsistencies. This leads to avoidable revenue loss. With an objective to reduce such revenue loss, it i....

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....nd the information available with the Department, to expand the scope of adjustments that can be made at the time of processing of returns under sub-section (1) of section 143 so that such adjustments can be made based on the data available with the Department in the form of audit report filed by the assessee, returns of earlier years of the assessee, 26AS statement, Form 16, and Form 16A. 3.4. From the above Memorandum to Finance Bill, 2008 & 2016 explaining the provisions of section 143(1)(a)(ii), specifies the incorrect claim particularly if such incorrect claim is apparent from any information in the return of income and that can be any information as such as the audit report or some other information as provided by assessee in the re....