Inquiries about intimation under Section 143(1) of the Income Tax Act, 1961 are addressed succinctly in this FAQ guide. Intimation refers to the processing of income tax returns by the Centralised Processing Centre (CPC) to verify arithmetical errors, apparent errors, and tax calculations. No income verification is conducted at this stage. Adjustments made by CPC include correcting arithmetical errors, disallowing incorrect claims, and adjusting income or loss computations based on audit reports. Intimation must be issued within 9 months from the end of the financial year in which the return is filed, allowing the assessee 30 days to rectify errors. Responses to CPC adjustments can be conveniently submitted through the assessee’s e-filing account.
Q1. What is intimation under Section 143(1)?
Ans: Intimation refers to the processing of returns by the Centralised Processing Centre (CPC). In this, all Income-tax returns filed under Section 139 or in response to a notice under Section 142(1) are processed to verify and fix the arithmetical errors, apparent errors, tax calculation, and tax payments. At this stage, no verification of the income is undertaken.
Q2. Which adjustments shall be made by CPC to compute total income or loss while processing the ITR?
Ans: Income-tax return is processed to compute total income or loss after making the following adjustments:
a. Any arithmetical error in the return;
b. An incorrect claim apparent from any information in the return;
c. Disallowance of loss claimed if the return of the previous year for which set-off of loss is claimed was furnished beyond the due date;
d. Disallowance of expenditure or increase in income indicated in the audit report but not considered in computing the total income in return;
e. Disallowance of deduction claimed under Section 10AA or Chapter VIA under the heading “C-Deductions in respect of certain incomes”, if the return of income is furnished beyond the specified due date;
Q3. What is the meaning of an incorrect claim?
Ans: An incorrect claim apparent from any information in the return’ means a claim on the basis of an entry in the Income-tax return:
a. Which is inconsistent with another entry of the same or some other item in such return;
b. In respect of which, information required to be furnished to substantiate such claim, has not been furnished;
c. 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.
Q4. What is the time limit to issue intimation under section 143(1)?
Ans: Intimation is required to be issued within 9 months from the end of the financial year in which the return is furnished by the assessee.
Q5. What is the time limit allowed to the assessee to explain and rectify the arithmetical error or incorrect claim found by the CPC?
Ans: Before making any adjustment, an opportunity shall be provided to the assessee to explain and rectify the arithmetical error or incorrect claim within 30 days from the date of issue of intimation.
Q6. How to submit the response against the adjustment made by the CPC?
Ans: The response against the adjustment made by CPC has to be submitted through the e-filing account of the assessee without any need to visit the income tax department.
