Handling of Notices u/s 143(1)(a)/139(9) of Income Tax Act, 1961

Handling of Notices u/s 143(1)(a)/139(9) of Income Tax Act, 1961

Section 143 (1) Where a return has been made u/s 139, or in response to a notice u/s 142(1), such return shall be processed in the following manner, namely:

(a) the total income or loss shall be computed after making the following adjustments, namely:

(i) any arithmetical error in the return;

(ii) an incorrect claim, if such incorrect claim is apparent from any information in the return;

(iii) disallowance of loss claimed, if the return of the previous year for which set off of loss is claimed was furnished beyond the due date specified u/s 139(1);

(iv) disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return;

(v) ……..or

(vi) ……..

Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode:

Provided further that the response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be made.

Explanation—For the purposes of this subsection:—

(a) “an incorrect claim apparent from any information in the return” shall mean a claim, on the basis of an entry, in the return,

i. of an item, which is inconsistent with another entry of the same or some other item in such return;

i. in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or [ e.g. Donations Claimed but details not punched]

ii. in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction;

Section 2(24)(x) any sum received by the assessee from his employees as contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees’ State Insurance Act, 1948 or any other fund for the welfare of such employees.

Other deductions.

36 (1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28—

(va) any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply if such sum is credited by the assessee to the employee’s account in the relevant fund or funds on or before the due date.

Explanation: For the purposes of this clause, “due date” means the date by which the assessee is required as an employer to credit an employee’s contribution to the employee’s account in the relevant fund under any Act, rule, order or notification issued thereunder……

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