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Issues involved: Challenge to the validity of an intimation u/s 143(1)(a) of the Income-tax Act, 1961 adjusting the total income returned by petitioners by adding a sum of Rs. 2,25,000 for the assessment year 1990-91.
Summary: The High Court of Bombay, in the case challenging the adjustment made by the first respondent under section 143(1)(a) of the Income-tax Act, 1961, found that the adjustment of Rs. 2,25,000 made by the respondent was not within the parameters of the proviso of section 143(1)(a). The court referred to a previous decision in the case of Khatau Junkar Ltd. v. K S. Pathania [1992] 196 ITR 55 to support this finding. As a result, the court set aside the intimation dated February 20, 1991, and directed the respondents to send a fresh intimation in accordance with the law and the mentioned judgment. Therefore, the court held that the adjustment made by the first respondent was not justified under section 143(1)(a) and ordered the claim for additional tax under section 143(1A) to be set aside as well. The rule was made absolute accordingly, providing relief to the petitioners in this case.
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