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29. Amendment of section 143. |
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In section 143 of the Income-tax Act,
(a) for sub-section (1), the following sub-sections shall be substituted, namely:
(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; or
(ii) an incorrect claim, if such incorrect claim is apparent from any information in the return;
(b) the tax and interest, if any, shall be computed on the basis of the total income computed under clause (a);
(c) the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax and interest, if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable under an agreement under section 90 or section 90A, or any relief allowable under section 91, any rebate allowable under Part A of Chapter VIII, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest;
(d) an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the assessee under clause (c); and
(e) the amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee:
Provided that an intimation shall also be sent to the assessee in a case where the loss declared in the return by the assessee is reduced but no tax or interest is payable by, or no refund is due to, him:
Provided further that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return is made.
Explanation.For the purposes of this sub-section,
(a) "an incorrect claim apparent from any information in the return" shall mean a claim, on the basis of an entry, in the return,
(i) of an item, which is inconsistent with another entry of the same or some other item in such return;
(ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or
(iii) 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;
(b) the acknowledgment of the return shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been made under clause (a).
(1A) For the purposes of processing of returns under sub-section (1), the Board may make a scheme for centralised processing of returns with a view to expeditiously determining the tax payable by, or the refund due to, the assessee as required under the said sub-section.
(1B) Save as otherwise expressly provided, for the purpose of giving effect to the scheme made under sub-section (1A), the Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in that notification; so, however, that no direction shall be issued after the 31st day of March, 2009.
(1C) Every notification issued under sub-section (1B), along with the scheme made under sub-section (1A), shall, as soon as may be after the notification is issued, be laid before each House of Parliament.;
(b) in sub-section (2), in clause (ii), for the proviso, the following proviso shall be substituted, namely:
Provided that no notice under clause (ii) shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished.".
Clause 29 seeks to amend section 143 of the Income-tax Act, which relates to assessment.
It is proposed to substitute sub-section (1) to the said section so as to provide that 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 ; or
(ii) an incorrect claim, if such incorrect claim is apparent from any information in the return ;
(b) the tax and interest, if any, shall be computed on the basis of the total income computed under clause (a) ;
(c) the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax and interest, if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable under an agreement under section 90 or section 90A, or any relief allowable under section 91, any rebate allowable under Part A of Chapter VIII, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest ;
(d) an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the assessee under clause (c) ; and
(e) the amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee:
It is further proposed to provide that an intimation shall also be sent to the assessee in a case where the loss declared in the return by the assessee is reduced but no tax or interest is payable by, or no refund is due to, him:
It is also proposed to provide further that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return was made.
Further, the expression "an incorrect claim apparent from any information in the return" in the said sub-section has been defined. It is also clarified that the acknowledgment of the return shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been made under clause (a).
It is also proposed to insert new sub-sections (1A), (1B) and (1C) to the said section. Sub-section (1A) provides that for the purpose of processing of returns under sub-section (1), the Board may make a Scheme for centralised processing of returns with a view to expeditiously determining the tax payable by, or refund due to, the assessee as required under that sub-section. Sub-section (1B) proposes that for the purpose of giving effect to the Scheme made under sub-section (1A), the Central Government may, by notification in the Official Gazette, direct that any of the provisions of the Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in that notification so, however, that no direction shall be issued after 31st March, 2009. Sub-section (1C) provides that every notification, along with the Scheme, issued under sub-section (1B) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.
Further, it is proposed to amend said section so as to substitute the proviso to clause (ii) of sub-section (2) thereof to provide that no notice under clause (ii) shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished.
These amendments will take effect from 1st April, 2008.
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