The Finance Act, 2016 has made a very important amendment to section 143(1) of Income Tax Act, 1961, whereby the scope of prima facie adjustments u/s 143(1) has been enhanced while processing the returns. The following four sub-cluases and two provisos to the clause (a) of Section 143(1) have been added to allow for the following adjustments also while processing the returns:

“(iii) disallowance of loss claimed, if return of previous year for which set off of loss is claimed was furnished beyond the due date specified under section 139(1);

(iv) disallowance of expenditure indicated in the audit report but not taken into the account in computing the total income in the return;

(v) disallowance of deduction claimed under section 10AA, 80-IA, 80IAB, 80IB, 80IC, 80ID, 80IE, if the return is furnished beyond the due date specified under section 139(1);

(vi) addition of income appearing in form 26AS or form 16A or Form 16 which has not been included in computing the total income in the return:

Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electric mode:

Provided further that the response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within 30 days of the issue of intimation, such adjustments shall be made.”

Thus before filing your return you must check your 26AS form and audit report as also the dates on which your returns have been filed. Otherwise the return would be processed by addition to your income as per Form 26AS or after disallowing the set off of losses, expenditures and deductions which you failed to do in the return of income  filed.

These amendments are applicable w.e.f. 01.04.2017 i.e. A Y 2017-18.