prpri Section 143(1) Notice for Arithmetical error – but none found Section 143(1) Notice for Arithmetical error – but none found

In case you received a notice u/s 143(1) saying there exist an arithmetical error in you Return probably stating that ‘In Schedule BP, Sl. No. D. Income chargeable under the head PGBP(A38+B43+C49) and the sum of amounts entered in A38+B43+C49 are inconsistent‘, you must have tried adding those figures again to just to find that there exist no such arithmetical error. Since returns are prepared by software, chances of an adding mistake is very slim. This article describes another possible reason for this error.

This reason I found out is applicable only for such assessee where Tax Audit report(3CD) is also filed. So read ahead only if you have filed 3CD for that year.

Notice for Arithmetical Error

The department has a step by step automated procedure for discovering errors in the ITR and by analysing few returns, it was found that:

  • Disallowance amounts filed in the Form 3CD was considered in ITR instead of actual amounts entered. I can’t absolutely sure about this as the Department does not publish the Scheme in which an ITR is processed. Based upon limited experience this was found to be the case.
  • This causes arithmetical error only if there exist difference between ITR and 3CD and so usually the notice also contains clause stating there is a difference with 3CD and ITR.
  • In case the Form 3CD states a different amount of disallowance than ITR, then instead of individual amounts entered in ITR(at A38, B43, C49), the Total in ‘Sl. No. D’ is compared with total disallowance amount returned in Form 3CD.
  • One important tip- the details given for disallowance u/s 36(1)(va) in Clause 20(b) is usually the place of error since it is common to jumble up the figures of deducted and paid or the due date or payment dates. Easier way to find this error is by selecting the table, copying and pasting it in Excel, using ‘Text to column’ feature of Excel, separate dates and amounts. Using formulas to compare the amounts is the best way as it is almost certain that you won’t find the mistake just by looking.

In order to ensure this is the case, try adding the disallowance figure from 3CD and check whether is that the amount computed by Department to be the expected total at Sl. No. D in ITR. So to conclude, there might not be any arithmetical error but difference in amounts with 3CD.

The above mentioned points are only my own opinion and not a final conclusion. Hope this article finds use to you and do let know any mistakes in the comments.

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August 2021