Section 143(1)-Summary Assessment Income Tax Act

Section 143

U/ Section 143(1), the tax authorities complete the assessment without calling you to the department; on the basis of the return filed by you. Intimation U/ Section 143(1) is an auto-generated letter by the computers of the Income Tax department without any human interference.

Section 143(1) of Income Tax Act

Section 143

Section 143(1) provides that, where the assessee has filed return U/S 139, or in reply to a notice U/S 142(1); such return shall be processed in the following manner.
a) The total income or loss shall be figured after making the adjustments regarding;

  • Any arithmetical error in the return
  • A wrong claim, if such incorrect claim is apparent from any information in the return
  • Disallowance of loss claimed; in a case where the return of the PY for which set off of loss is claimed; was furnished after the due date specified U/S 139(1).
  • Disallowance of expenditure intimated in the audit report but not taken into account while computing the total income in return.
  • Addition of income appearing the Form 16 or Form 16A or Form 26AS; which has not been added in computing the total income in return.
  • Disallowance of a deduction claimed U/S 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or 80-IE; in case the return is furnished after the due date prescribed U/S 139(1).

Explanation:

No such adjustment shall be made before an intimation either; in writing or electronic mode is given to the taxpayer of such adjustments. Also, if any response is received from the taxpayer, such response shall be considered before making any adjustment. In a case where the taxpayer fails to respond; or no acknowledgment is received within 30 days of the issuance of such intimation, such adjustments shall be made.

     b) The tax and interest if any, shall be computed on the basis of the total income; computed under clause (a) mentioned above.

      c) The amount payable by, or the amount of refund due to, the taxpayer shall be determined after adjustment of the tax & interest, computed above by any TDS deducted or collected, any advance tax paid, any relief permissible under an agreement U/S 90 or 90A, or any relief permissible under section 91, any rebate allowable under Part A of Chapter VIII, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest.

     d) An intimation shall be prepared/generated & sent to the taxpayer specifying the amount determined to be payable by, or the amount of refund due to, the taxpayer under clause (c) above, and

      e) The amount of refund due to the taxpayer in pursuance of the determination under clause (c) shall be given to the assessee.

Here also, an intimation must be sent to the assessee where the loss declared in return by him is adjusted but no tax or interest is payable by, or no refund is due to him.

However, no intimation shall be sent after the expiry of one year from the end of the FY in which the return is made.

Explanation:

  • Here, “an incorrect claim apparent from any information in the return” shall mean the claim in the return, on the basis of entry;
    – Of an item, which is consistent with another entry of the same or some other item in such return;
    – In regard of which the information required to be furnished under this act to substantiate such entry has not been furnished, or
    – In regard to a deduction, where such deduction exceeds specified legal limit which may have been represented as monetary amount or percentage or ratio or fraction.

The software in the computer which processes the intimation is designed to detect arithmetical inaccuracies and inconsistencies in the return and such software is placed at Central Processing Centre (CPC). Income Tax Department sends notice only in a case where any tax or interest is found payable or refundable, or there is an increase/reduction in loss. Where there is no tax or interest payable or refundable, or no adjustment is made, then intimation U/S this section shall not be sent to the taxpayer.

Section 143(1A)

As per section 143(1A), for processing of returns U/S 143(1), the Board may make a scheme for the centralized processing of returns to expeditiously determining the tax payable by, or the refund due to, the assessee as required under the said sub-section.

Section 143(1B)

As per the Section 143(1B), for giving the effect to the scheme made U/S 143(1A) above, the Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications & adaptations as may be specified in that notification, so however, that no direction shall be issued after 31st March 2012.

Section 143(1C)

As per this section, every notification issued U/S 143(1B) above, along with the scheme made U/S 143(1A) above, shall; as soon as may be after the notification is issued, be laid before each house of parliament.
However, the provisions of this subsection shall not apply to any return furnished for the AY starting on or after 1st April 2017.

How to deal with the intimation U/S 143(1)

If you receive an intimation U/S 143(1), you must first inquire the reason for receiving such intimation. The intimation would show the ITR filed by you and the computation done by the income tax department. If you are satisfied with the computation, you should pay the amount of tax payable, and if; any refund is due, you don’t have to do anything, and you will receive interest in due time. If you are not satisfied with the computation, you can contact your income tax officer.

Note: You can revise an ITR U/S 139(5), even if you have received an intimation U/S 143(1) as; section 143(1) is not an assessment but only an intimation.

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