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Validity of adjustment u/s 143(1)(a) on the basis of views expressed by the tax auditor in tax audit report
There are various adjustment which is done to the retuned income by CPC while processing income tax return u/s 143(1)(a). In most of the cases, the adjustment is carried out on the basis of views expressed by the tax auditor in tax audit report or facts reported by the tax auditor. The question remains, whether disallowances indicated in the Tax Audit report sacrosanct?
Here is an interesting case by Mumbai Tribunal as under:
Kalpesh Synthetics Pvt Ltd
Appellant
8, Kuntal, Modi Estate, L.B.S Marg, Ghatkopar (W),
Mumbai 400086 [PAN: AAACK6496P]
Vs.
Deputy Commissioner of Income Tax
CPC Bengaluru
[ITA No.1785/Mum/2021 Assessment Year: 2018-19]
In this case, ITAT Mumbai while deliberating on the issue of disallowance made under section 36(1)(va) in the intimation u/s 143(1)(a), has observed that
“The views expressed by the tax auditor, in such a situation, cannot be reason enough to disregard the binding views of the Hon’ble jurisdictional High Court. To that extent, the provisions of Section 143(1)(a)(iv) must be read down.”..
The copy of the very useful and relevant order is as under:
Rajiv Javeri
Now a days in all most all returns CPC 143[1] INTIMATION ADDS ANY INCOME LIKE CAPITAL GAIN OR SVING BANK INTEREST SHOWN BY CA IN 3CD AT PARA 16 [d]income not credited to profit
and loss accounts like bank interest capital gais THOUGH THEY ARE ALREADY SHOWN at relevant colomen AND TAX PAID ..rectification application are Tobe filed
CA PARVEEN JAIN
additions made by CPC in my many clients cases also on the basis of point 16(d) of Form 3CD. like FDR interest, Saving interest, Rent and other income credited in prop. capital account. Rectification application or appeal to be filed
OP Agrawal
Is there any other remedy for the Income not credited to P&L Account shown in tax audit report