Adjustment by way of Computer generated Automated Message u/s 143(l)(a) is a Debatable Issue: ITAT rejects Plea [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) has held that adjustment by way of computer-generated automated message under section 143(l)(a) is a debatable issue and rejects plea.

The appellant, City Manager Association,is a Charitable Trust holds registration u/s 12AA of the Act. After filing the return of income, the assessee received intimation under section 143(1) of the Act from CPC Bengaluru and in the said intimation, certain adjustments were made as regards deduction claimed under section 11(2) of the Act.

On appeal CIT (A) holds that “since the position of law is unambiguous and not debatable, the action of AO, CPC is upheld and the additions made by way of intimation under section 143(1) of the Act are sustained”. Aggrieved, assessee filed appeal before ITAT.

The counsel for the appellant submitted that debatable issue should not be done in an intimation under section 143(l)(a) of the Act and the case is directly covered by the order passed by Ahmedabad ITAT in assessee’s own case for the immediately preceding assessment year.

The Tribunal by relying Tribunal’s own decision in assessee’s case observed that as per law a charitable trust is permitted to accumulate up to 25% of their income without complying with any formalities or condition and such accumulation is not included in the total income. The Tribunal further observed that whenever any debatable issue is involved, an explanation of the assessee is required, then on such issue, no prima facie adjustment in an exparte proceedings can be made.

The Coram of Mr. Waseem Ahmed, Accountant Member and Mr. Siddhartha Nautiyal, Judicial Member has held that “we note that since the issues before us are covered directly by the assessee’s own Tribunal order for AY 2016-17, respectfully following the same we are hereby allowing the assessee’s appeal”.

Ms. Arti N. Shah appeared for appellant and Mr.Atul Pandey appeared for the revenue.

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