The Central Board of Direct Taxes (CBDT), on Wednesday said that discrepancies in Form 26AS or Form 16/16A would not be considered for the purpose of Section 143(1)(a)(iv) of the Income Tax Act, 1961.
As per section 143(1)(a)(iv) of the Income Tax Act, inserted vide Finance Act, 2017, while processing the return of income prescribes that the total income or loss shall be computed after making adjustment of addition of income appearing in Form 26AS or Form 16A or Form 16 (the three Forms) which has not been included in computing the total income in the return.
Regarding the provision, there were ambiguities over the nature, extent and scope of comparison of information as contained in the return of income with the three Forms which might lead to issuance of intimation proposing adjustments to the returned income.
After examining the issue, the Board has now clarified that “in ITR-1 returns, 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 in a meaningful manner. Therefore, it is directed 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.”
The communication further clarified that the above provision shall continue to apply in cases 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.
Further, for purpose of section 143(1)(a)(vi) of the Income Tax 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. However, in cases where on receiving the intimation u/s 143(1)(a)(vi) of the Act, the concerned assesse has already filed a revised return, such returns shall be treated as valid and handled accordingly,” the order said.
Where on receiving the intimation under Section 143(1)(a)(vi) of the Income Tax Act, the concerned assesse has already filed a revised return, such returns shall be treated as valid and handled accordingly.
Read the full text of the Instruction below.
