Asokkumar Vignesh Vs ACIT (ITAT Chennai)
143(1) Has Limits: CPC Can’t Rewrite Dividend Income-Schedule BP Entry Not an Incorrect Claim: ITAT Grants Relief
In Asokkumar Vignesh Vs. ACIT- ITA No.3001/Chny/2025, AY 2020-21, order dated 31.12.2025, Chennai ITAT allowed Assessee’s appeal & set aside CPC’s prima facie adjustment u/s 143(1) relating to dividend income. Assessee had correctly offered taxable dividend of ₹17.61 lakh after claiming exemption of ₹10 lakh u/s 115BBDA from total dividend of ₹27.61 lakh. However, CPC while processing return u/s 143(1) wrongly adopted entire ₹27.61 lakh as taxable dividend, merely because same amount was reduced while computing business income in Schedule BP, and rejected rectification petition u/s 154.
Tribunal held that mere reporting or adjustment in Schedule BP cannot alter correct quantum of dividend income, particularly when Assessee had otherwise correctly disclosed taxable dividend in return. Such adjustment did not fall within scope of “incorrect claim apparent from return” as contemplated under Explanation to section 143(1). CPC was held to have travelled beyond its limited jurisdiction under summary processing provisions. Tribunal directed CPC/AO to restrict dividend income to ₹17.61 lakh & grant exemption of ₹10 lakh u/s 115BBDA accordingly. Appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee directed against the order of the Addl/JCIT(A) (herein after called CIT(A)’ in short], Thane, dated 03.09.2025 for AY-2020-21.
