MADHUSUDAN ACADEMY OF SCIENCE AND CHARITABLE TRUST,DHENKANAL vs. INCOME TAX OFFICER, EXEMPTION WARD, BHUBANESWAR, BHUBANESWAR

Facts

The assessee, a trust, filed its return showing gross income and net income. The CPC processed the return under Section 143(1) and treated the entire gross receipts as income, disallowing claimed expenses without verification. The assessee argued that this adjustment was not permissible under Section 143(1) and that expenses should not be disallowed without verification.

Held

The Tribunal held that treating the entire gross receipts as income without considering claimed expenses and without verification, as done by the CPC in the intimation under Section 143(1), is not permissible. The adjustment made was outside the preview of Section 143(1) of the Act.

Key Issues

Whether the CPC's action of treating gross receipts as income and disallowing expenses under Section 143(1) without verification is permissible.