Many times I have observed in the industry that there is various doubts and misconceptions regarding Intimation u/s 143(1) i.e summary assessment. Hence today I have decided to discussed this for better understanding of the section. So lets start the discussion.

Some reasons which may attract demand U/s 143 (1):

1. TDS Credit Mismatch

2. Quoting wrong TAN Number

3. Under Reporting of Income

4. Salary from 2 or More Employers

5. Excess Deduction Claim

6. Software Utility Error

7. Disallowance under Tax Audit Report

This are some common reasons because of which generally the intimation might be received by the tax payers.

Now we will discuss the section in detail.

What all factors will be responsible to received demand u/s 143(1):

1. any arithmetical error in the return;

2. an incorrect claim, if such incorrect claim is apparent from any information in the return;

3. disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139;

4. disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return;

5. disallowance of deduction claimed under sections 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or section 80-IE, if the return is furnished beyond the due date specified under sub-section (1) of section 139; or

6. addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return:

Some Important points for Taxpayers

1. No such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electric mode

2. Assessee should response to the demand u/s 143(1) within within 30 days of the issue of intimation

3. 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 30 days of the issue of intimation, such adjustments shall be made.

4. Thus, before filing your return you must check your 26AS form and audit report as also the dates on which your returns have been filed. Otherwise the return would be processed by addition to your income as per form 26AS or after disallowing the set off of losses, expenditures and deductions which you failed to do in the return of income filed.

Extract of Section 143(1) of Income Tax Act, 1961:

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 for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139;

(iv)  disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return;

(v)  disallowance of deduction claimed under sections 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or section 80-IE, if the return is furnished beyond the due date specified under sub-section (1) of section 139; or

(vi)  addition of income appearing in Form 26AS or Form 16A or Form 16 which has 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:

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;

(Author – Amit Bajaj Advocate, Bajaj & Bajaj Advocates, 128, Sangam complex, Milap chowk, Jalandhar City (Punjab), Email: amitbajajadvocate@hotmail.com , M +919815243335)

Disclaimer: The contents of this article are for information purposes only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

(Republished with Amendments by Team Taxguru)

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16 Comments

  1. MURALI V says:

    AMIT BAJAJ IS MEMBER SINCE 13.5.2019 BUT WHEREAS THE COMMENTS WERE APPEARING FROM JULY 2017, AUGUST, DECEMBER & MARCH 2018. HOW IS IT POSSIBLE. PLEASE EXPLAIN

    1. TG Team says:

      Dear Sir,

      Amit Bajaj is with us from a very long time but he registered with us only on 13.5.2019 and post registration we shifted all posts which he submitted without registering on our website to his account.

  2. ARUNACHALAM MR says:

    I have got the Prima facie adjustment u/s 143(1) from IT DEPT .I could not adjustment of the income as per IT DEPT notice due to Submit click is not shown in right side end .Please suggest how should I responded to IT DEPT.

  3. Dharmesh Brahmbhatt says:

    How should I respond to this notice?

    •Gather all your supporting documents (rent receipts, life insurance statement, home loan interest certificate etc).
    •Then log in to the Income tax E filing website and go to E-Proceedings > E-Assessment/Proceedings
    •Select ‘Submit’ on the next screen
    You will see a list of all mismatches here same as the ones you’ve received in the email.

    Click on the dropdown under Response •Agree to addition: If you have forgotten to include income from fixed deposits etc that are mentioned in your Form 26AS,

    select this option.
    •Disagree to addition: If you have added deductions in your tax return directly and have necessary proofs for it,

    then select this option.
    When you disagree, you’ll see a section open up where you can select from a list of reasons. You’ll also need to attach supporting documents before you submit your response.

    TAN: Enter the TAN of the employer (available in the Form 16)
    •Deduction made under section: Enter 192 if you have made a deduction against salary income
    •Amount paid/credited by deductor: Check your Form 16 Part A for this number.
    •Income/Gross Receipt as per return: Enter the income after taking the deduction into account.

    Scroll to the right.

    Select – Deduction claimed in return but not in form 16
    For HRA, select the reason Allowance exempt claimed in return but not in Form 16
    •For all Section 80 deductions, select Deductions claimed in the return but not in Form 16

    •Once you’ve submitted, you will see an acknowledgement screen.

    When should I revise my return?
    If you have opted to file revised return, then you must file a revised return within 15 days. 

    What happens if I don’t respond to the notice within 30 days?
    In case, no response is received within 30 days, the tax return will be processed after making necessary adjustments mentioned in the 143(1)(a) communication

  4. Dharmesh says:

    TAN: Enter the TAN of the employer (available in the Form 16)
    •Deduction made under section: Enter 192 if you have made a deduction against salary income
    •Amount paid/credited by deductor: Check your Form 16 Part A for this number.
    •Income/Gross Receipt as per return: Enter the income after taking the deduction into account.

  5. Rahul sarswat says:

    I have got prima facie notice for tow points as below.
    1- difference in gross income between itr and form 16
    2- difference in net taxable income between itr and firm 16.

    Here I would like to tell you that in gross income i have claimed deduction under house property loss (rs. 144689 as interest on house loan and rs. 50000 as repair and maintenance and labour payments against the same.

    So difference of 194689 carried forward to net taxable income.

    My first question is …..the deductions I claimed are correct or not. And second is how to reply the query in E proceedings on IT site.

    Kindly provide the detailed process to reply query. If possible provide screen shots.
    As coloumn provided on sites are very confusing.

  6. Manjit Chakravarty says:

    I have got a same notice under section 143(1)(a) stating Addition of income appearing in Form 26AS or Form 16A or Form 16. When i checked Form 26AS i found that my saving bank account has deducted TAX for interest credited; which i didn’t mention while filing the IT return. As per my understanding IT department has received the TAX already. Now please suggest how should i respond to it?

  7. Rishen says:

    My assesee has made an error and recieved a notice under said section. If he corrects errors and submits a revised return would there be any fine, penalties levied?

  8. Ashish says:

    I have got a same notice under section 143(1)(a) stating Addition of income appearing in Form 26AS or Form 16A or Form 16. When I checked the same I found that they have not considered the 80TTA(savings bank interest) into account.
    Now what to do???

  9. SSD says:

    I have exactly the same case. They have not considered my loss from house property and issues notice. this is wrong. How should I respond?

  10. VARUN says:

    Sir,
    I received Communication u/s 143(1)(a)(vi) from IT department for Addition of income appearing in Form 26AS or Form 16A or Form 16. This notice is in correct as i have mentioned the same Gross total income as appearing in my form 16 issued by my employer. It appears that either system of income tax department is not correct or they have not considered the loss from house property (Interest on home loan) shown by me. What should i do now. Should i make a reply and attach all bank interest certificates. Response is also asking for TAN No., deduction made etc. Please guide.

    1. SSD says:

      Hi,
      Good News. I gave(online) proof for Loss of house property as shown in form 16. They accepted and now ITR is processed. Do the same thing.

      1. Kapil Sidana says:

        Hello, May i know when have you uploaded the data & in how much time frame it got processed..As i had also uplaoded data and awaiting to hear back from them

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