Additions by way of adjustment & intimation u/s 143(1) on basis of retrospective amendment is beyond scope of Sec 143(1)

Additions by way of adjustment & intimation u/s 143(1) on basis of retrospective amendment is beyond scope of Sec 143(1)

Deepak Gupta | May 25, 2022 | Views 7634

Additions by way of adjustment & intimation u/s 143(1) on basis of retrospective amendment is beyond scope of Sec 143(1)

Additions by way of adjustment & intimation u/s 143(1) on basis of retrospective amendment is beyond scope of Sec 143(1)

In this case payments amounting to aforesaid Rs. Rs.3,97,41,559/- by way of employees contribution to provident fund and ESI were made by the assessee after stipulated date prescribed under the relevant laws governing provident fund and ESI, but before the due date of filing of return of income prescribed u/s 139(1) of Income Tax Act.

Adjustments were made by Revenue u/s 143(1) of Income Tax Act, whereby aforesaid additions of Rs.3,97,41,559/- were made. ITAT held that these Additions were unfair, unjust, and bad in law.

ITAT held that whether the aforesaid amendments to Income Tax Act by way of Finance Act, 2021 are retrospective or prospective, is debatable and controversial.

Now, Addition by way of adjustment and intimation u/s 143(1) of Income Tax Act on debatable and controversial issues is beyond the scope of Section 143(1) of Income Tax Act. Revenue was clearly in error in making the aforesaid adjustments.

Also, addition by way of adjustment and intimation u/s 143(1) of Income Tax Act, on the basis of retrospective amendment to Income Tax Act is beyond the scope of Section 143(1) of Income Tax Act.

In the light of this view, the aforesaid additions of Rs.3,97,41,559/- by way of adjustment and intimation u/s 143(1) of Income Tax Act, were beyond the scope of Section 143(1) of Income Tax Act; and further, that the Ld. CIT(A) erred in law in confirming the aforesaid addition on a debatable and controversial issue.

Accordingly, in respect of the aforesaid additions of Rs.3,97,41,559/-, we set aside the impugned appellate order dated 10.05.2021 of the Ld. CIT(A), and direct the Assessing Officer to delete the aforesaid addition of Rs.3,97,41,559/-.

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