TML BENEFIT TRUST,MUMBAI vs. ITO 30(1)(1), MUMBAI

ITA 7756/MUM/2025Status: DisposedITAT Mumbai20 February 2026AY 2018-19Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 143(1) adjustments are for prima facie errors and do not allow re-characterization of income or rejection of substantive exemption claims requiring legal interpretation. The subsequent scrutiny assessment under Section 143(3) had examined and accepted the exemption claim, making the Section 143(1) adjustment unsustainable.

What were the facts?

The assessee, TML Benefit Trust, received a dividend of ₹86,40,00,000/- from Tech Mahindra Limited. The assessee claimed this dividend as exempt under Section 10(34) of the Income Tax Act, 1961, as it was paid after DDT under Section 115-O. However, the CPC made an adjustment under Section 143(1) treating the claim as incorrect.

What were the issues?

Whether an adjustment made under Section 143(1) for treating dividend income as taxable is sustainable when a subsequent scrutiny assessment under Section 143(3) accepted the claim for exemption.

Which sections of the Income-tax Act were involved?

Section 10(34),Section 115-O,Section 143(1),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘E’ BENCH

Before: SHRI AMIT SHUKLA & SHRI ARUN KHODPIA

For Appellant: Shri Harsh Kapadia
For Respondent: Shri Ritesh Misra, CIT DR
Hearing: 19/02/2026Pronounced: 20/02/2026

PER AMIT SHUKLA (J.M): These two appeals, though arising out of two different statutory proceedings, arise out of a common issue, namely, the tax treatment of dividend income of ₹86,40,00,000/- received by the assessee-trust from Tech Mahindra Limited (“TML”) during Assessment Year 2018–19 and the legality of its disturbance at the stage of processing under section 143(1) of the Income-tax Act, 1961 (“the Act”), despite the very 143(3). One appeal relates to the quantum assessment order passed under section 143(3) dated 08.10.2025; the other appeal assails the adjustment made while processing the return under section 143(1), which culminated in the appellate order dated 27.0

The order continues below.

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