1902/1992. - Income Tax - 1902/1992

INSTRUCTION NO. 1902/1992 Dated: September 17, 1992 Section(s) Referred: 143(1)(a) Statute: Income - Tax Act, 1961 While processing a return u/s.143(1)(a) of the I.T.Act, the Assessing Officer can make only the adjustments prescribed under the section. The Board has been taking the view that the scope of the objections raised by the Audit(both Receipt Audit and Internal Audit) in cases processed u/s.143(1)(a) should be limited only to pointing out failures on the part of the assessing Officers to make any of the prescribed adjustments and not to pointing out mistakes/omissions which could be taken care of only by making a scrutiny assessment. Accordingly, vide F.NO.237/5/84-A PAC-II dated 26-12-88 instructions had been issued by the Board, that in all objections pointing out failures in making the prescribed adjustments, appropriate remedial action was to be invariably taken. 2. Even so, the Receipt Audit continued to raise objections pointing out mistakes/omissions which fell outside the scope of the adjustments prescribed u/s.143(1)(a) and included a number of such objections in the Audit Reports. In view of the increased revenue effect involved in such audit paragraphs the Board decided that as a special measure remedial action should be taken in all draft-para cases included in the Reports of the C AG for 1989-90 and 1990-91(F.NO.246/136/90-A PAC I dated 14-1-1992) even if such action warranted scrutiny of any case already processed u/s.143(1)(a). 3. The C AG has now agreed that the Revenue Audit, apart from raising objections in scrutiny assessments, shall henceforth confine itself to raising objections only with respect to failures of the Assessing Officers to make the prescribed adjustments in cases processed u/s.143(1)(a). 4. Therefore, in the changed circumstances, it has been decided by the Board that henceforth in cases processed u/s.143(1)(a), appropriate remedial action should be taken only when the objections pointed out are for failure to make the prescribed adjustments. The remedial action has to be initiated and completed as per existing Instruction No.1598 dated 1-2-1985 and letter dated 15th November,1988 vide F.NO.237/6/87-A PAC II issued in this regard.