TaxTMI 
TaxTMI 
2024 (5) TMI 1165
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....r of ld. Assistant Director of Income Tax, CPC under section 143(1) of the Act, for A.Y. 2018-19 dated 25.02.2020. Also, the assessee is before us as a Cross-Objector for the aforementioned year. The Revenue in ITA No.1072/PUN/2023 has raised the following grounds of appeal : "1. On the facts and circumstances of the case and in law, the ld.CIT(A), while dealing with the grounds raised by the assessee with regard to the disallowance of gratuity payment of Rs. 6,20,00,000/- made u/s. 43B of the Act, erred in directing the AO to verify whether such payment was made during the year as per provisions of law and allow the claim of the assessee based o the outcome of such verification, when the admissibility of such payment as deduction ought t....
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....u/s. 139(1) of the Act on 29.11.2018 for A.Y. 2018-19. The said Return of Income was processed u/s. 143(1) of the Income Tax Act, 1961 by Assistant Director of Income Tax, (Centralized Processing Centre), [ld.ADIT] Bangalore on 25.02.2020. In the order u/s. 143(1), the ld.ADIT made a disallowance u/s. 143(1)(a)(iv), the same is scanned and reproduced as under : (iv) Disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return-143(1)(a)(iv) S.No Particulars Amount in Income Tax Return Amount mentioned in Form Annexure 3CD Variance 1 Inconsistency in amount disallowed under section 43B in any preceding previous year but allowable during the previous yea....
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....itted that assessee had claimed expenses for gratuity on payment basis u/s. 36(1)(v) r.w.s. 43B of the Act. Ld.AR submitted that u/s. 143(1) the Department does not have any jurisdiction to make a disallowance of Rs. 6,20,00,000/-. Therefore, the order u/s. 143(1) is bad in law. 6.1 Ld.AR also explained that ld.CIT(A)[NFAC] infact has not set-aside the issue to the AO for verification as ld.CIT(A) has given a specific finding at page 19 of the order that if gratuity payment of Rs. 6,20,00,000/- was paid during A.Y. 2018-19, then it was an allowable expenditure. Therefore, ld.CIT(A)[NFAC] had decided the issue on merits, hence, Revenue's ground of appeal is factually incorrect. Submission of ld. DR : 7. The ld.Departmental Representative(....
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....s not been included in computing the total income in the return: Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode: Provided further that the response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be made:] 84[Provided also that no adjustment shall be made under sub-clause (vi) in relation to a return furnished for the assessment year commencing on or after the 1st day of April, 2018;] (b) the tax 85[, interest and fee], if any, shall be computed on the basis of the total in....
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....ther entry of the same or some other item in such return; (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction; (b) the acknowledgement of the return shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been made under clause (a). 9. In this case, it is observed that the ld.ADIT(CPC) had made disallowance u/s. 143(1)(a)(iv) of the Act. The section 143(1)(a)(iv) allows the Assessing Of....