Processing of income-tax returns under section 143(1) of the Income-tax Act which were filed in Forms ITR-1 to 6 & applicability of section 143(1)(a)(vi)
Circular No. 1/2018 was issued by the Central Board of Direct Taxes on 10 January 2018. Its subject is Processing of income-tax returns under section 143(1) of the Income-tax Act which were filed in Forms ITR-1 to 6 & applicability of section 143(1)(a)(vi).
This is an order under section 119 of the 1961 Act — section 239 of the 2025 Act. Section 119 lets the Board give directions to its own officers and, in defined cases, relax a requirement. It is an administrative power, not a power to rewrite the charge.
Sets out how a taxpayer is to respond before an adjustment under section 143(1)(a)(vi) is made. That sub-clause, introduced by the Finance Act, 2016 with effect from 1 April 2017, allows the total income to be adjusted for income appearing in Form No. 26AS, Form No. 16A or Form No. 16 but not included in the return, and Instruction Nos. 9/2017 dated 11 October 2017 and 10/2017 dated 15 November 2017 identify when it may be invoked by the Centralised Processing Centre. Because the provision was being applied for the first time, an awareness campaign by email and short message was to precede any intimation, asking the taxpayer to respond electronically within one month. If he does not respond or the response is unsatisfactory, a formal intimation proposing the adjustment issues, and under the second proviso the adjustment is made if no response comes within thirty days of that intimation. A taxpayer who fully agrees must file a revised return; one who partly agrees must file a revised return for that part and a reconciliation statement in the format provided for the rest; one who disagrees must file a reconciliation statement in support.
Intimations proposing adjustments were about to be issued by the Centralised Processing Centre, and since the provision was being applied for the first time the Board wanted taxpayers alerted and told how to respond.
Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Circular No. a.i../2018 North Block, New Delhi, the 10th of January, 2018 Order under section 119 of the Income-tax Act, 1961 Subject: Processing of income-tax returns under section 143(1) of the Income-tax Act which were filed in Forms ITR-l to 6 & applicability of section 143(1)(a)(vi)-reg.- Sub-clause (vi) of clause (a) of sub-section (1) of section 143 of the Income-tax Act, 1961 ('Act') as introduced vide Finance Act, 2016, w.e.f. 01.04.2017, while processing the return of income, prescribes that the total income or loss shall be computed after making adjustment for addition of income appearing in Form 26AS or Form 16A or Form 16 (the three Forms) which has not been included in computing the total income in the return. In this regard, CBOT has issued Instruction No.(s) 9/2017 dated 11.lD. 2017 & 10/2017 dated 15.11.2017 for identification of instances in which section 143(1)(a)(vi) of the Act may be invoked by CPC-ITR, Bengaluru on the basis of information contained in the ITR Forms 1 to 6. 2. As intimations proposing adjustments in identified returns under section 143(1)(a)(vi) of the Act would be shortly issued by the CPC-ITR, Bengaluru, the process to be followed by the taxpayers for filing the response is as under: 2.1 Since section 143(1)(a)(vi) of the Act is being applied for the first time while processing the returns, it has been decided that before issuing an intimation of the proposed adjustment, initially an awareness campaign would be carried out to draw the attention of the taxpayer to such differences. This would be in form of an e-mail and SMS communication to the concerned taxpayer informing him about the variation in the tax-return vis-a-vis the information available in the three Forms and requesting him to submit response to the variation within one month of receiving the communication electronically. In case the taxpayer does not respond within the available time-frame or the response is not satisfactory, a formal intimation u/s 143(1)(a)(vi) proposing adjustment to the returned income would be issued to him. As per the second proviso to section 143(1)(a)(vi) of the Act, in a case where no response is received from the taxpayer within thirty days of issue of such an intimation, the proposed adjustment shall be made to the returned income. Therefore, it is of utmost necessity that the concerned taxpayer files a prompt, timely and satisfactory response to the awareness campaign or subsequent intimation proposing adjustment u/s 143(1)(a)(vi) of the Act. 2.2 The manner for furnishing response by the taxpayer is as under: For furnishing the response electronically, taxpayer is required to login in his account in the e-filing site and choose the option (View-Returns/Forms). In a case where communication/intimation has been issued to the taxpayer u/s 143(1)(a)(vi) of the Act, the status will be displayed in the dashboard as 'Response to Communication/Intimation u/s 143(1)(a) is pending'. The taxpayer can click on the same and submit his response. 2.3 The scenario(s) for furnishing response are as under: I. Where upon receiving the awareness message or formal intimation u/s 143(1)(a)(vi) of the Act, if the taxpayer fully agrees with the proposed adjustment, he is required to file a revised return in response. II. Where upon receiving the awareness message or formal intimation u/s 143(1)(a)(vi) of the Act, if the taxpayer partially agrees with the proposed adjustment, he is required to (i) file a revised return for the part of the proposed adjustment with which he is in agreement & (ii) file a reconciliation statement (in the format to be provided by CPC-ITR on the e-filing site) for the part of the proposed adjustment with which he is not in agreement. III. Where upon receiving the awareness message or formal intimation u/s 143(1)(a)(vi) of the Act, the taxpayer disagrees with the proposed adjustment, he is required to file a reconciliation statement (in the format to be provided by CPC-ITR on the e-filing site) in support of his contention. 3. Based upon response of the taxpayer as indicated in para 2.3 above and the information so available with the CPC-ITR, thereafter, such returns shall be taken up for processing by CPC-ITR as per provisions of section(s) 143(1), 143(1)(a)(vi) read with Instruction No.s 9 & 10/2017 of CBDT. 4. Hindi version to follow. (F. No. 225/333/ 2017-ITA.II) Copy to:- 1) P5 to FM/OSD to FM/PS to MoS(F)/OSD to MoS(F) 2) PS to Secretary (Revenue) 3) Chairman, CAOT & All Members, CBDT 4) All Pr.CCsIT/ Pr.DsGIT 5) All Joint Secretaries/CsIT, CBDT 6) CIT (M&TP), Official Spokesperson of CBDT 7) a/a Pr DGI T/Systems) for uploading on official website 8) J(ll (Database Cell) for uploading on departmental website (Rohit Garg) Director- (ITA. II}, CBDT (Rohit Garg) Director-ITA.II, CBDT
On an intimation under section 143(1)(a) proposing to add income appearing in Form No. 26AS that was left out of the return.
Source: the Income Tax Department’s own published text — its page for this instrument.