RSM India

Newsflash: CBDT clarifies the scope of prima facie adjustments by tax authorities - Based on receipt / income appearing in Form 26AS / Form 16A / Form 16

Section 143 (1) of the Income Tax Act, 1961 (‘the Act’) provides for prima facie adjustments to a return of income filed by the assessee, while processing the return of income. The ambit of prima facie adjustment was expanded by the Finance Act, 2016. Accordingly, CPC, Bangalore was empowered to make preliminary adjustment while processing the return under section 143(1) if discrepancy was found between the income reflected in three Forms (Form 26AS or Form 16A or Form 16) and income offered for tax in the tax return. [Section 143 (1)(a)(vi)]

This led to several doubts on 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.

Earlier, the Central Board of Direct Taxes (CBDT) vide instruction 9/2017 had provided clarification with regards to processing of ITR-1 under Sec 143(1)(a) for Form 26AS/ Form 16A / Form 16 discrepancies. Now, on similar issue, CBDT has issued clarifications in respect of ITR-2, 3, 4, 5 & 6 and the same have been dealt with in this Newsflash.

We trust you will find our newsflash useful.

Click here to download

How can we help you?

Contact us by phone +91 22 6108 5555 or submit your questions, comments, or proposal requests.

Email us