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TMI Blog2025 (5) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... nged the deletion of addition made by the CPC amounting to Rs. 23,41,32,000/- as without considering the provisions of Section 40 and Section 43B of the Act through Notification No. 28/2021, dated 01.04.2021. 3. Briefly stated that the assessee had filed its return of income declaring total income at Rs. 16,36,39,380/- for the year under consideration and had computed tax @22% by exercising the above concessional tax u/s. 115BAA of the Act by duly filing form 10IC on 30.09.2022, the same was processed u/s. 143(1) of the Act and the AO/CPC issued intimation u/s. 143(1)(a) dated 14.12.2022, proposing an adjustment due to inconsistency in the amount of profit chargeable to tax u/s. 41 of the Act as per the return of income and the audit repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeded to make the other additions mentioned above without giving notice to the assessee . The assessee also challenged the addition on the merits. The ld. CIT(A) vide order dated 10.07.2024, allowed the appeal filed by the assessee on various grounds. 5. The revenue is in appeal before us, challenging the deletion on addition made on account of increase in profit or decrease in loss of ICDS adjustment and deviation in method of valuation of stock amounting to Rs. 34,56,43,410/- and decrease in profit or increase in loss of ICDS adjustments and deviation in method of valuation of stock amounting to Rs. 11,77,61,410/- which were deleted by the ld. CIT(A) on the ground that the disallowance made by the CPC was due to the typographical er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee contended that the assessee was not given notice of the impugned adjustment made by the CPC/AO in the 143(1) intimation and that the intimation given by the CPC u/s. 143(1) dated 27.11.2023 was only with regard to the adjustment pertaining to Section 41 amounting to Rs. 68,40,418/-. The ld. AR argued that there was a gross violation of principles of natural justice, where the ld. CPC/AO cannot make adjustment/addition without duly giving notice to the assessee. On the merits, the ld. AR contended that the assessee was brought to the notice of discrepancy in the tax audit report only during the Section 143(1) proceeding subsequent to which the assessee had filed its revised tax audit report. The ld. AR further contended that there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the said adjustment is made due to non-compliance/no response from the assessee, which fact is not correct as per the records placed before us. It is trite to extract the provision of Section 143(1)(a) of the Act for ease of reference: "143. (1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:- (a) the total income or loss shall be computed after making the following adjustments, namely:- (i) any arithmetical error in the return; [***] (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; [(iii) disallowance of loss claimed, if return of the previous year f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C/AO has made an addition of Rs. 34,56,43,410/- at serial no. 25 on 'Increase in profit or decrease in loss on account of ICDS adjustments and deviation in the method of valuation of stock' and at serial no. 34 on 'Decrease in profit or increase in loss on account of ICDS adjustment and deviation in method of valuation of stock' for an adjustment of Rs. 11,77,61,410/- instead of Rs. 62,50,000/- as per the return of income filed by the assessee. It is observed that the assessee company is said to have misreported Rs. 2,60,14,197/- instead of Rs. 26,01,46,197/- which is a typographical error pertaining to the increase in purchase on account of inclusion of GST under clause 14(b) of the original form no. 3CD dated 29.09.2022 . Pursuant to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he report pertains, if there is payment by such person after furnishing of report under subrule (1) and (2) which necessitates recalculation of disallowance under section 40 or section 43B.;" 11. The above notification is to insert sub rule 3 of Rule 6G of Income Tax Rules, 1962 for the purpose of recalculation of disallowance u/s. 40 or 43B of the Act by way of Income Tax (Eight Amendment) Rules, 2021 w.e.f. 01.04.2021. The ld. AR's contention is though it pertains to disallowance under Section 40 or Section 43B, the same is not exhaustive and does not expressly bar the revision of the tax audit report in case of any arithmetical error or incorrect claim. The decisions relied upon by the ld. AR has dealt with identical issues, where the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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