TaxTMI 
TaxTMI 
2026 (6) TMI 1448
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....e assessment framed under section 143(3) of the Income Tax Act, 1961. The substantive grievance of the assessee is that despite the Assessing Officer having accepted during scrutiny proceedings that there was no discrepancy between the disclosures made in the return of income and those made in Form No.10B, the computation ultimately made in the assessment order proceeded on an erroneous basis by disregarding the application of income already disclosed by the assessee and by further committing computational errors resulting in inflation of taxable income. Consequently, the assessee has challenged (i) the disallowance of application of income amounting to Rs. 181,21,14,846, (ii) the determination of gross total income at Rs. 640,60,27,839 on ....
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.... The record shows that an amount of Rs. 284,41,05,466 was available for utilization from accumulations pertaining to Financial Years 2016-17 and 2017-18. Out of the same, the assessee actually applied Rs. 109,48,17,881 towards the specified purposes for which the accumulation had originally been made. The balance amount of Rs. 174,92,87,585, which could not be applied within the prescribed period, was voluntarily offered to tax under section 115BBI of the Act at the applicable rate. These disclosures were duly reflected both in the return of income as well as in Form No.10B and there is no dispute regarding the filing of either document within the prescribed time. 4. The record further reveals that while processing the return under secti....
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....g the material on record, the Assessing Officer himself recorded a categorical finding in the assessment order that there was no difference between the taxable income reflected in the return of income and the taxable income reflected in Form No.10B in relation to section 115BBI. The assessment order further records that the disclosures made by the assessee in Form No.10B were duly verified and found to be in order. The Assessing Officer also observed that the relevant amounts stood properly reported in the statutory audit report and consequently no adverse inference was warranted on that aspect. Thus, the factual foundation on which the adjustment under section 143(1) had originally proceeded stood completely demolished during the scrutiny ....
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....ith the additions which had originally emanated from the prima facie adjustments made under section 143(1). The assessment proceedings had effectively resolved the alleged mismatch and therefore the additions founded on such mismatch had no surviving basis. 9. We further find considerable force in the contention of the assessee that the learned CIT(A) failed to appreciate the true nature of the claim before him. The assessee was not making any fresh claim dehors the return of income. On the contrary, the application of income aggregating to Rs. 181,21,14,846 had already been disclosed in the return itself and had also been reflected in the statutory audit report. The record before us does not indicate any attempt by the assessee to intro....
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.... Another aspect which deserves notice is that the Assessing Officer, while discussing the issues on merits, accepted the assessee's explanation and recorded findings favourable to the assessee, but while drawing up the final computation failed to align the computation with those very findings. An assessment order must ultimately reflect in its computation the conclusions arrived at in the body of the order. Where the discussion portion records acceptance of the assessee's explanation and verification of disclosures, but the computation proceeds on assumptions contrary to such findings, the computation cannot be allowed to prevail over the substantive findings recorded after scrutiny. The final determination of income must necessarily be con....