As per section 143(1)(a) while processing return the total income or loss shall be computed after making the adjustments for
- any arithmetical error in the return or [S.143(1)(a)(i)]
- an incorrect claim, if such incorrect claim is apparent from any information in the return. [S.143(1)(a)(ii)] As per Explanation to 143(1) an incorrect claim apparent from any information in the return” shall mean a claim, on the basis of an entry, in the return
- of an item, which is inconsistent with another entry of the same or some other item in such return
- in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished;
- 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
WEf AY 2017-18 Now adjustment u/s 143(1)(a) in return of income can also be made for
- disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139 [S.143(1)(a)(iii)]
- disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return[S.143(1)(a)(iv)]
- disallowance of deduction claimed under sections 10AA, 80-IA, 80-IAB, 80-IB, 80-IC,80-ID or section 80-IE, if the return is furnished beyond the due date specified under sub-section (1) of section 139 [S.143(1)(a)(v)]
- addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return [S.143(1)(a)(vi)]
Intimation of Adjustment to Assessee:
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:
Response of the assessee to be awaited for 30 days
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
As per Above Instructions No. 9/2017, In returns filed in ITR-1 Form, information about a particular head/item of income is only on net basis and thus, complete data/information may not be available therein which may enable comparison with the data/information as contained in the three Forms [F.16,16A and 26AS] in a meaningful manner. Therefore, in exercise of its powers under section 119 of the Act, the Board hereby directs that provision of section 143(1)(a)(vi) of the Act would not be invoked to issue intimation proposing adjustment to the income/loss so filed in ITR-1 Form in such situations.
- However, where any head/item of income has been altogether omitted to be included in the return of income filed in ITR-1 while the three Forms contain specific detail in this regard pertaining to that item/head of income, section 143(1)(a)(vi) of the Act shall continue to apply.
- Further, for purpose of section 143(1)(a)(vi) of the Act, only the three Forms specified therein would be taken into consideration
- The pending intimations proposing adjustments under section 143(1)(a)(vi) wherein the taxpayer has tendered an explanation without revising the return or has not tendered any response till now shall be dealt with in accordance with the above direction.
In cases where on receiving the intimation u/s 143(1l)(a)(vi) of the Act, the concerned assessee has already filed a revised return, such returns shall be treated as valid and handled accordingly