INTIMATIONS U/S 143(1) BY CENTRALISED PROCESSING CENTRE(CPC).
Of late, many Assessees are receiving intimations u/s 143(1) by CPC for the Ass.Year 2008-09 in the past about 4 weeks. The initimations contain errors, resulting in denial of refunds/huge demands created. By observing some of these orders, errors can be summarized as below:
01. Advance Tax and Self Assessment Tax paid not having been considered.
02. Credit for TDS denied
03. Deductions u/s 80 C and other sections of chapter VI not considered.
04. Income under one head of income considered as from another head or repeated under another head of income.
05. Tax demand not rounded off.
Notes in the intimation states that a rectification u/s 154 may be sought or an appeal preferred u/s 246A.
These intimations are faulty and not in consonance with the Act, as could be seen from the discussion below:
01. adjustments not in consonance with Section 143
Explanation to Sec.143(1) states that “For the purposes of this sub-section,—
(a) “an incorrect claim apparent from any information in the return” shall mean a claim, on the basis of an entry, in the return,—
(i) of an item, which is inconsistent with another entry of the same or some other item in such return;
(ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or
(iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction;
(b) the acknowledgement of the return shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been made under clause (a).
During the relevant Ass.Year, new IT return forms were announced and attachment of any documents/evidence for claims of taxes paid, deductions was dispensed with. Thus, the returns filed will have only entries in the return of taxes paid and decuctions claimed and no supporting documents will be available with the assessing Officer. Explanation (a)(i) talks of “an entry being inconsistent with another entry of the same or some other item in such return”. Any claim of advance tax paid/self assessment tax paid/TDS/TCS will be shown only at Schedule-IT or TDS1 & TDS2 as the case may be and the same will be carried to Part-B-TTI. There cannot be any inconsistency, and denial of credit is bad in law.
02. Sec.205 reads as follows:
Bar against direct demand on assessee.
” Where tax is deductible at the source under the foregoing provisions of this Chapter, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income.”
In such situation, there is no reason for the assessing Officer to deny the credit.
03. Rounding Off Taxes
Sec 288B reads as follows:
Rounding off amount payable and refund due.
288B. Any amount payable, and the amount of refund due, under the provisions of this Act shall be rounded off to the nearest multiple of ten rupees and for this purpose any part of a rupee consisting of paise shall be ignored and thereafter if such amount is not a multiple of ten, then, if the last figure in that amount is five or more, the amount shall be increased to the next higher amount which is a multiple of ten and if the last figure is less than five, the amount shall be reduced to the next lower amount which is a multiple of ten.
Even though Act clearly states that taxes payable have to be rounded off to nearest multiple of TEN, demands are being raised for Re.1/- and Re.3/-.
It appears that no attempt has been made to keep the assessment process in tune with the law.
04. In Sec.143(1A), it has been made out that a Scheme for Centralised processing of returns will be made. No such scheme appears have to been announced. However, the returns are processed by this CPC.
In addition to above, assesses, who find that there are mistakes in the intimations received by them, will be put jeopardy as can be surmised herein below:
- Past experience of processing applications u/s 154 by the department is very bad.Though law states that “authority shall pass an order, within a period of SIX months from the end of the month in which the application is received…”, no orders are being passed even after expiry of 2 years.
- The intimation, states that an application u/s 154 is to be made to CPC, which has only a Post Box Number. The postal authorities, do not accept Regd Post to a Post Box No as also, even if, an application is sent by Speed Post, as is being advised, the assessee(applicant) will have no knowledge of when the application has been received, to compute the time limit of SIX months.
While establishing the Central Processing Centre, the Dept in its Circular 02 / 2009, DATED 21-5-2009 has stated that, “the Government has introduced the centralised processing of returns which envisages no interface with the taxpayer.”
However, the intimations that are being received with variety of mistakes and not in tune with the Act, speaks of shabby manner, that the procedure is being implemented.
It is requested that Dept should come out with a circular or a notification, for accepting and issuing acknowledgements for applications u/s 154, processing returns more diligently as also the applications u/s 154. Time limit specified u/s 154 should be strictly followed and wherever, an application is made, not to insist on unwarranted demands raised, lest, it may cause great hardship to many assesses, many of them being Senior Citizens ,since, u/s 154(7) time fixed for an amendment to be made is FOUR years.
I request your forum to bring this to the notice of all concerned.
CAclubindia
