2019 (8) TMI 1822 - Income Tax

Head Note / Extract:
Rectification of mistake u/s 154 - Return processed u/s 143(1) - assessee has accumulated income out of the income derived from the trust, which was not utilised for the objects of the trust - disallowance of deduction for amount of TDS for which credit has been claimed against tax payable on the returned income - HELD THAT:- As we consider the scope of section 154 for making prima facie adjustment while processing return under section 143(1)(a) of the Act i.e. process of dealing with the return is an ex parte process. It is pertinent to observe that whenever any debatable issue is involved an explanation of the assessee is required, then on such issue, no prima facie adjustment in an ex parte proceedings can be made. Reading of judgment of Hon’ble Kolkatta High Court in case of Natwarlal Chowdhury Charity Trust [1989 (8) TMI 19 - CALCUTTA HIGH COURT ] and if facts are looked into, then it would reveal that both the issues were debatable one, where more than one opinion was possible. Adjustment under section 143(1)(a) is not permissible on both these aspects. Therefore, we allow appeal of the assessee, and delete both the disallowances. Appeal of assessee allowed.