TaxTMI 
TaxTMI 
2023 (3) TMI 1508
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....at the assessee is an individual, filed his return of income u/s 139(1) of the Income Tax Act, 1961 (in short 'Act') for the A.Y.2019-20 on 24.10.2019, declaring total income of Rs.34,66,020/-. While processing the return, the CPC, Bangalore has made the addition of Rs.4,50,886/- on account of belated payments of employees contribution to PF and ESI after due date prescribed under the respective Acts. 3. Aggrieved, the assessee preferred appeal before the CIT(A) and the Ld.CIT(A) after considering the submissions of the assessee, dismissed the appeal of the assessee. 4. On further being aggrieved, the assessee preferred an appeal before the Tribunal and raised the following grounds : 1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) ought to have held that the adjustment of Rs.4,50,886 is outside the scope of intimation u/s 143(1) of the Act. 3. Without prejudice to the above, the learned Commissioner of Income Tax (Appeals) is not justified in sustaining the adjustment of a total sum of Rs.4,50,886 made i....
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....ered to disallow the same, as it is covered in clauses mentioned in section 143(1)(a)(ii), wherein, it is mentioned that an incorrect claim is also one of the reasons for disallowance. The Ld.DR relied on the decision of coordinate Bench of ITAT Chennai in the case of Sree Gokulam Chit and Finance Co.P.Ltd. Vs. DCIT, Chennai vide I.T.A.No.765/CHNY/2022 dated 21.12.2022 and the decision of Hon'ble High Court of Madras in the case of AA520 Veerappampalayam Primary Agricultural Cooperative Credit Society Ltd. Vs. Deputy Commissioner of Income Tax [2022] 138 taxmann.com 571 (Madras) and pleaded to confirm the order passed by the Ld.CIT(A) and dismiss the appeal of the assessee as per the ratio laid down in the orders of the Hon'ble apex court , Chennai Tribunal and High Court of Madras. 7. We have heard both the parties and perused the material available on record. At the outset, as rightly pointed out by the Ld.DR, the issue with regard to late remittance of the contribution under PF and ESI is settled by the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. mentioned supra. Now, the only contention of the Ld.AR is that the CPC has no power to make any adjustment u/....
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....be determined after adjustment of the tax, interest and fee, if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable under section 89, any relief allowable under an agreement under section 90 or section 90A, or any relief allowable under section 91, any rebate allowable under Part A of Chapter VIII, any tax paid on selfassessment and any amount paid otherwise by way of tax, interest or fee; (d) an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the assessee under clause (c); and (e) the amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee: Provided that an intimation shall also be sent to the assessee in a case where the loss declared in the return by the assessee is adjusted but no tax, interest or fee is payable by, or no refund is due to, him: Provided further that no intimation under this sub-section shall be sent after the expiry of 70[nine months] from the end of the financial year in which the re....
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....ited 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 ol internal inconsistencies. This leads to avoidable revenue loss. With an objective to reduce such revenue loss, it is proposed to amend section 143(1) of the Income-tax Act. It is proposed to provide that the total income of an assessee shall be computed under section 143(1) after making the following adjustments to the total income in the return : (a) any arithmetical error in the return; or b) an incorrect claim, if such incorrect claim is apparent from any information in the return. Further it is proposed to clarify the meaning of the term "an incorrect claim apparent from any information in the return". This term shall mean such claim on the basis of an entry, in the return,- (a) of an item, which is inconsistent with another entry of the same or some other item in such return; (b) in respect of which, information required to be Furnished to substantiate such entry, has not been famished under this Act; or (c) in respect of a deduction,....
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....im to respond to such adjustments. The response received, if any, will be duly considered before making any adjustment. However, if no response is received within thirty days of issue of such intimation, the processing shall be carried out incorporating the adjustments. These amendments will take effect from the 1st day of June, 2016" From the above Memorandum of 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 return of income. In this context, it is pertinent to mention that earlier position is only prima-facie arithmetic adjustments can be made, but in view of the amended provisions by the Finance Act, 2008, w.e.f. 01.04.2008, the amended provisions empowers adjustments to be made inter alia on the basis of remarks indicated in the return of income or incorrect claim apparent from any information in the return of income. Post amendment w.e.f. 01.04.2008, the scope of adjustment u/s 143(1) of the Act has....