Applicability of Sec.143 to certain cases. - Income Tax - 1382/CBDT

INSTRUCTION NO. 1382/CBDT Dated: February 9, 1981 Finance Act 1980 has deleted sub-clauses ii and iii of section 143(1)(b) of the I.T.Act 1961 which has taken away the discretion of the ITO to make adjustments regarding apparent admissible and in-admissible items of deduction. The following instances have been brought to the notice of the board where the assessees are trying to claim unintended benefit by taking advantage either of the deletion of the above referred sub-clauses or of summary assessment scheme itself:- a) assessees claiming exemption of pension from tax, claiming exemption in respect of CCA, DA, leave encashment salary and gratuity on premature retirement; b) assessee not including the income of wife or minor child which is includible u/s.64; c) assessee not adding back interest payment as required u/s.40(b) of the I.T.Act; d) assessees claiming full standard deduction even when in receipt of conveyance allowance; e) assessees not filing returns in accordance with the decision of the appellate authorities in their own case on substantial points; f) cases in which departmental appeal on substantial point is pending which is having effect in substantial years as well; g) assesses claiming gratuity to be taxable in instalments; h) wrong claims of exemption of perquisites by employees in private and public sector undertakings; i) excess claims of deductions in computing property income. 2. The board have decided that cases of the above referred types should be taken out of the summary assessment scheme and the assessments made u/s.143(3). To take care of cases of those types which might have already been completed u/s.143(1), 10% of salary cases disposed of under summary assessment scheme during the current year should be selected for random scrutiny in the next financial year. 10% of the Government salary cases disposed of in the current year should also be selected for random scrutiny. Whenever cases of wrong allowance etc. are brought to the notice of the commissioner, action should be taken by him u/s.263 or if time permits action should be taken u/s.143(2)(b). 3. It has also been decided that the assessment for the year in which income under the head property is shown for the first time or income from a new property is disclosed, it should be taken out of the purview of the summary assessment scheme and the assessment made after scrutiny. 4. The above instructions may please be brought to the notice of all the working in your charge for their guidance.