Scope of assessment under section 143(1)
Income Tax Assessment under section 143(1) of IT Act is like preliminary checking of the Income Tax Return. At this stage no detailed scrutiny of the Income tax return is carried out. At this stage, the total income (profit) or loss is computed after making the following adjustments (if any), namely:-
- any arithmetical error in the income tax return; or
- an incorrect claim, if such incorrect claim is apparent from any information in the income tax return;
- disallowance of loss claimed, if income tax 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 of act
- disallowance of expenditure indicated in the Tax audit report but not taken into account in computing the total income in the ITR;
- disallowance of deduction claimed under sections 10AA , 80-IA, 80-IB, 80-IC, 80-ID or section 80-IE of act, if the Income tax return is furnished beyond the due date of income tax return specified under sub-section (1) of section 139 of act ; or
- addition of income appearing in Income tax Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the ITR.
However, no such adjustments shall be made unless an intimation is given to the Income tax assessee of such adjustments either in writing or in electronic mode on income tax portal. Further, the any response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no any response is received within 30 (thirty) days of the issue of such intimation of section 143(1), such adjustments shall be made.
For the above purpose “an incorrect claim apparent from any information in the Income tax return” means a claim on the basis of an entry in the Income tax return:-
- of an item which is inconsistent with another entry of the same or some other item in such Income tax return;
- in respect of which the information is required to be furnished under the Income tax act to substantiate such entry and has not been so furnished; or
- in respect of a deduction in Income tax return, where such deduction exceeds specified statutory limit in ITR, which may have been expressed as monetary amount or percentage or ratio or fraction;