Under section 143(1) is sent by the IT Department in response to tax return filed by the tax payers why???

The intimation under section 143(1) is sent by the IT Department in response to tax return filed by the tax payers. The intimation as the name suggests intimates the tax payer about, any tax and interest payable or if the assessee is eligible for refunds after providing all the necessary adjustments relating to tax deducted at source, advance tax paid, any tax paid on self – assessment or any other amount in the nature of tax or interest.

This intimation shall be deemed to be notice for tax demand  under section 156 as the case may be and all the provisions will apply accordingly.  If there is no sum payable or refundable then the acknowledgement of the return shall be deemed to be intimation.

The total income of an assessee shall be computed after making the following adjustments in the return of income-

a)      Any arithmetical error in the return or

b)      An incorrect claim apparent from any information in the return.

“An incorrect claim apparent from any information in the return” shall mean such claim on the basis of an entry, in the return,-

a)      Of an item which is inconsistent with the entry of similar other item in such return;

b)      In respect of which, necessary information to substantiate such entry has not been furnished; or

c)      In respect of any deduction, where it exceeds the statutory limit which may be expressed as monetary amount or percentage or ratio or fraction.

The intimation under section 143(1) is sent by the IT Department in response to tax return filed by the tax payers. The intimation as the name suggests intimates the tax payer about, any tax and interest payable or if the assessee is eligible for refunds after providing all the necessary adjustments relating to tax deducted at source, advance tax paid, any tax paid on self – assessment or any other amount in the nature of tax or interest.

This intimation shall be deemed to be notice for tax demand  under section 156 as the case may be and all the provisions will apply accordingly.  If there is no sum payable or refundable then the acknowledgement of the return shall be deemed to be intimation.

The total income of an assessee shall be computed after making the following adjustments in the return of income-

a)      Any arithmetical error in the return or

b)      An incorrect claim apparent from any information in the return.

“An incorrect claim apparent from any information in the return” shall mean such claim on the basis of an entry, in the return,-

a)      Of an item which is inconsistent with the entry of similar other item in such return;

b)      In respect of which, necessary information to substantiate such entry has not been furnished; or

c)      In respect of any deduction, where it exceeds the statutory limit which may be expressed as monetary amount or percentage or ratio or fraction.The intimation shall be sent before the expiry of one year from the end of the assessment year in which the income was assessable. In other words, before the expiry of one year from the end of the financial year in which the return was filed. As per the provisions of Sec154, the Assessing Officer may amend any intimation or deemed intimation u/s 143(1) without prejudice to the provisions of the Act.

If any tax and interest payable arises on the basis of return submitted, the assessee may comply with the deemed notice of demand by making payment or may make an application for rectification u/s 154.

Intimation u/s 143(1) cannot be treated as conclusion of assessment process because such intimation is a deemed notice of demand u/s 156. The department has clarified that the intimation is merely an acknowledgement to the fact that the return filed has been accepted and does not contain any error apparent from record.

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This Article is written by CMA Samir Biswal. He can be reached at cmasamirbiswal@gmail.com