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Facts
The assessee received an intimation notice from CPC for Assessment Year 2021-22, proposing an adjustment of Rs. 4,63,035/- under section 143(1)(a) due to a mismatch between the expenditure in the audit report and the ITR. The assessee clarified that this amount was already included in the ITR under 'income from other sources', detailing various components.
Held
The Tribunal held that the CPC's observation of no response from the assessee was incorrect. The Judicial Officer (JAO) was directed to consider the assessee's response and reconciliation statement, and then adjudicate the matter as per the Income Tax Act.
Key Issues
Whether the CPC erred in assuming no response was provided by the assessee regarding income/expenditure mismatch, and whether the assessee's explanation was duly considered.
Sections Cited
143(1)(a)
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Income Tax Appellate Tribunal, SURAT “SMC” BENCH, SURAT
Before: DR. B.R.R. KUMAR, VICE- & MS. SUCHITRA KAMBLE
O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER:-
These two appeals are filed against the orders dated 21-02- 2025 and 14-02-2025 respectively passed by CIT(A)/Addl/JCIT(A), Mumbai for assessment years 2012-13 and 2021-22.
A.Y. 2021-22. On perusal of the records, it appears that while processing return of income, the CPC issued notice on 21-03-2022 proposing an adjustment of Rs. 4,63,035/- u/s. 143(1)(a) on account of mismatch in expenditure indicated in audit report and ITR (1). The Assessee submitted his reply there by stating that the assessee already mention Rs. 4,63,035/- in his return (ITR) under the head “income from other sources”. The bifurcation & 532/Srt/2025 NileshkumarKantilalModi Vs. ITO Asst.Years:2012-13 &2021-22 - 2– was under PPF interest, dividend income, savings bank interest, commission income, interest on deposits, rent and subsidy. The same was explained by the assessee stating thereby that there is no variance in return at Sl. No. 5(d) of Part A under the head “any other item of income” and Tax Audit. In response to the intimation notice, the assessee has provided clarification on 07- 06-2022 mentioning that the said amount was mentioned under PPF interest, dividend income, saving’s bank interest, commission income, interest on deposits, rent and subsidy. Thus, we held that the observation of the CPC that no response was submitted by the assessee appears to be incorrect. Therefore, we direct the JAO to take into account assessee’s response dated 07-06-2022 as well as verify the reconciliation statement filed by the assessee along with affidavit. Thereafter adjudicate the same as per Income Tax Act. In the issue is identical. Therefore, for A.Y. 2021-22 also the JAO is directed to adjudicate the issue as mentioned hereinabove.
In the result, both the appeals of the assessee are partly allowed for statistical purposes.
Order is pronounced in the open Court on 16.02.2026