Rationalisation of the provision relating to processing of returned income and issuance of notice under sub-section (2) of section 143 of the Act
The existing provisions of clause (a) of sub-section (1) of section 143 of the Act provides that at the time of processing of return of income made under section 139, or in response to a notice under sub-section (1) of section 142, the total income or loss shall be computed after making the adjustments specified in clauses (i) to (vi) therein.
It is proposed to amend the following provisions of sub-section (1) of section 143 of the Act,-
(i) Amend sub-clause (iv) of clause (a) of sub-section (1) of the section 143 of the Act, to allow for the adjustment on account of increase in income indicated in the audit report but not taken into account in computing the total income.
(ii) Amend sub-clause (v) of clause (a) of sub-section (1) of the section 143 of the Act so as to give consequential effect to amendment carried out in section 80 AC vide Finance Act, 2018.
(iii) Amend the provisions of section 143 to reduce the time limit for sending intimation under sub-section (1) of section 143 of the Act from one year to nine months from the end of the financial year in which the return was furnished.
Consequently, it is also proposed to reduce the time limit for issue of notice under sub-section (2) of section 143 of the Act from six months to three months from the end of the financial year in which the return is furnished.
These amendments will take effect from 1st April, 2021
[Clause 34]
Amendment of section 143.
34. In section 143 of the Income-tax Act,—
(a) in sub-section (1),––
(i) in the second proviso, for the words “one year”, the words “nine months” shall be substituted;
(ii) in clause (a),––
(ii) in clause (a),––
(I) in sub-clause (iv), for the words “disallowance of expenditure indicated”, the words “disallowance of
expenditure or increase in income indicated” shall be substituted;
(II) in sub-clause (v), for the words, figures and letters “sections 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or section 80-IE, if”, the words, figures and letters ‘section 10AA or under any of the provisions of Chapter VI-A under the heading
“C.-Deductions in respect of certain incomes”, if’ shall be substituted;
(b) in sub-section (2), in the proviso, for the word “six”, the word “three” shall be substituted.