HIMANSHUSINHJI JYOTENDRASINHJI JADEJA,GONDAL vs. DCIT/ACIT CIRCLE-1(1), RKT, RAJKOT

ITA 325/RJT/2026Status: DisposedITAT Raipur29 September 2026AY 2018-194 pages
AI SummaryRemanded

What were the facts?

The assessee, Himanshusinhji Jyotendrasinhji Jadeja, filed an appeal against the order of the National Faceless Appeal Centre (NFAC) Delhi/Commissioner of Income-tax (Appeals) dated 23.01.2026. This order confirmed an adjustment made by the Assessing Officer (CPC) under section 143(1) of the Income-tax Act, 1961, for Assessment Year 2018-19. The CPC had processed the assessee's return of income, initially declaring Rs.64,94,752/-, and intimation was issued at Rs.69,44,752/-. This increase of Rs.4,50,000/- was due to an inconsistency between the return and the audit report regarding disallowance under section 40(a)(ia) for non-compliance with Chapter XVII-B. The CIT(A) upheld this adjustment, finding it within the jurisdiction of section 143(1) and sustainable on merits.

What did the Tribunal hold?

The Tribunal noted that the central issue was the disallowance of Rs.4,50,000/- under Section 40(a)(ia) of the Act, carried out as an automated adjustment under Section 143(1) by the CPC due to a discrepancy between the Tax Audit Report and the Return of Income regarding failure to deduct tax on brokerage expenses. The Tribunal referred to the amendment to Section 201 & 40(a)(ia) by the Finance Act 2012, which states that the payer would not be deemed in default if the recipient has included the income in its return and paid due tax. The assessee contended that the payee had included the income and paid taxes. Considering this, the Tribunal set aside the impugned order of the CIT(A) and remanded the issue back to the Assessing Officer. The Assessing Officer is directed to verify if the payee included the income in its return and paid taxes. If confirmed, the disallowance under section 40(a)(ia) shall be deleted. The assessee is directed to file a certificate from a chartered accountant to this effect before the Assessing Officer. The issue of jurisdiction under Section 143(1) was implicitly addressed by the remand for verification of facts.

What were the issues?

1. Whether the adjustment made by the CPC assessing the returned income of Rs.64,84,750/- at Rs.69,34,750/- under section 143(1) of the Act was erroneous? The assessee contended that the adjustment made by the CPC exceeded the jurisdiction vested under section 143(1). The revenue relied on the findings of the Assessing Officer. 2. Whether the adjustment made by the CPC was within the jurisdiction vested under section 143(1) of the Act? The assessee argued that the adjustment exceeded the permissible scope of section 143(1). The CIT(A) held that such "prima facie" adjustments are valid when based on inconsistencies within filed documents. 3. Whether the addition of Rs.4,50,000/- made by the CPC invoking the provisions of section 40(a)(ia) of the Income Tax Act, 1961, was erroneous? The assessee argued that no addition should be made as the brokerage income was included in the recipient's return and taxes were paid thereon. The revenue relied on the Assessing Officer's findings.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 143(1),Section 201,Section 250

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
आयकर अपीलीय अिधकरण, राजकोट "यायपीठ, राजकोट। In The Income Tax Appellate Tribunal, Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member And Shri Sonjoy Sarma, Judicial Member आयकर अपील सं./ITA No. 325/RJT/2026 [ "नधा"रण वष"/Assessment Year: 2018-19 ] Himanshusinhji Jyotendrasinhji DCIT/ACIT Circle-1(1), RKT, Jadeja, IT Office, New Aayakar Vs. Hajur Palace, Gondal, Bhawan, Vatiaka, Gujarat-360311 Rajkot, Gujarat-360001 "थायीलेखासं./जीआइआरसं./PAN/GIR No.: ACHPJ2275K (अपीलाथ"/Assessee) (""यथ"/Respondent) Assessee by : Shri G. R. Sanghavi, Ld. AR Respondent by : Shri Ganesh Iyer, Ld. Sr. DR Date of Hearing : 14/07/2026 29/09/2026 Date of Pronouncement :

:: ORDER :: Per,Dr. Arjun Lal Saini, AM: Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2018-19, is directed against the order under section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the National Faceless Appeal Centre (NAC) Delhi/Commissioner of Income-tax (Appeals) [in short ‘NFAC/Ld.CIT(A)’], dated 23.01.2026, which in turn arises out of an order passed by the Assessing Officer u/s 143(1) of the Act, dated 11.06.2019. 2. The grounds of appeal raised by th

The order continues below.

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