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Facts
The assessee filed their return of income disclosing a total income from salary. The CPC issued an intimation u/s 143(1) making adjustments to exempt income like HRA, Special Allowance, Sodexo Food Meal Coupon, and medical reimbursement, which the assessee argued were not permissible. A rectification application u/s 154 was rejected.
Held
The Tribunal held that adjustments made in an intimation u/s 143(1) must be explicit and not debatable. Since the adjustments made to the assessee's exempt income were debatable and not provided for in Section 143(1), the intimation was unsustainable and liable to be quashed.
Key Issues
Whether adjustments to exempt income, which are debatable in nature, can be made in an intimation under Section 143(1) of the Income Tax Act, 1961.
Sections Cited
143(1), 250, 1961, 154
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Income Tax Appellate Tribunal, “D” BENCH KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
The captioned appeal by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeal), NFAC, Delhi [hereinafter referred to as “the Ld. CIT(A)”] vide order no. ITBA/NFAC/S/250/2024-25/10709768(1) dated 06.12.2024 passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2017-18.
Shri Soumitra Choudhury, Advocate represented on behalf of the assessee and Shri Sailen Samadder, Sr. DR appeared on behalf of the revenue.
It was the submission of the Ld. AR that the assessee is a salaried employee and the assessee filed his return of income disclosing a total income from salary of Rs.64,61,400/-. It was the Rajiv Pujara, AY 2017-18 submission that intimation u/s. 143(1) of the Act came to be issued adopting the income of the income of the assessee at Rs.77,37,600/- . It was the submission that the assessee had filed a rectification application u/s. 154 of the Act, which also came to be rejected. It was the submission that the Form 16 in the case of assessee showed the total income of the assessee at Rs.64,30,875/- whereas the gross salary was shown at Rs.77,66,800/-. It was the submission that the CPC in the intimation u/s. 143(1) had made adjustments to the exempt income claimed by the assessee representing the HRA, Special Allowance, Sodexo Food Meal Coupon and medical reimbursement. It was the submission that these adjustments were not permissible in an intimation u/s. 143(1) of the Act in so far as the said adjustments were not provided for in the said section. It was neither an arithmetical mistake nor a wrong claim. It was the submission that the intimation passed u/s. 143(1) of the Act is liable to be quashed.
In reply, the Ld. Sr. DR vehemently supported the orders of the Assessing Officer and the ld. CIT(A). It was the submission that the claim of Sodexo Food and Meal Coupon had errors, similar is the claim in regard to the HRA. It was also the submission that the reimbursement of driver’s salary was also rightly disallowed. It was the submission that the order of the Ld. CIT(A) is liable to be upheld.
We have considered the rival submissions. A perusal of the order of the Ld. CIT(A) in para 6 shows that the Ld. CIT(A) has taken a stand that the Form 26AS statement had primacy over the Form 16 which is not correct. In an intimation u/s. 143(1), there is no question of the primacy either of Form 26AS or Form 16. The provisions of section 143(1) are very explicit in regard to what are the adjustments that are permissible in an intimation u/s. 143(1). Admittedly, before issuance of intimation u/s. 143(1) a notice has been issued to the assessee and the assessee has also responded to