JUDGMENT
N.K. Sud, J.
1. This order will dispose of three appeals i.e., ITAs 76, 217 and 216 of 2003. relating to asst. yrs. 1994-95, 1995-96 and 1996-97 in assessee’s own case, involving common questions of law and facts.
2. While processing the returns of the assessee under Section 143(1)(a) of the IT Act, 1961 (for short “the Act”), the AO made prima facie adjustments by adding the income of two minor sons of the assessee: namely, Varun Mehra and Raghav Mehra, in the hands of the assessee under Section 64(1A) of the Act.
3. The assessee challenged this action before the CIT(A) on the ground that such an addition was not permissible under Section 143(1)(a) of the Act. This plea did not find favour with the CIT(A), who dismissed the appeals.
4. The assessee preferred further appeals before the Tribunal, which have been allowed. The Tribunal, relying upon the judgment of the Rajasthan High Court in Suparas Mal Kothari v. Union of India and Ors. (2002) 257 ITR 658 (Raj), upheld the objection of the assessee and quashed the action of the AO in adding the income of the minors to her total income by way of an adjustment under Section 143(1)(a) of the Act.
5. Counsel for the Revenue contended that in view of amendment of Section 64(1A) of the Act by the Finance Act, 1992, w.e.f. 1st April, 1993, the income of the minor sons of the assessee was assessable in her hands even though the same did not arise out of the gifts made by her. He further pointed out that after issuing intimation under Section 143(1)(a) of the Act, the AO had also framed regular assessments in which the income of the minor sons was assessed in her hands and the said action stands confirmed in appeal. He, therefore, contended that the addition had rightly been made while processing the return under Section 143(1)(a)of the Act.
6. At the outset, it may be mentioned that the dispute before us in the present appeals is not as to whether the income of the minor sons of the assessee, is assessable in her hands or not. The limited dispute is as to whether the AO was legally competent to add the same to the returned income of the assessee by way of an adjustment under Section 143(1)(a) of the Act. To resolve this dispute, it is necessary to refer to Section 143(1)(a) of the Act and the first proviso thereto as applicable to the assessment years under consideration. The said provision is as under :
“143(1)(a). Where a return has been made under Section 139, or in response to a notice under Sub-section (1) of Section 142,–
(i) if any tax or interest is found due on the basis of such return, after adjustment of any tax deducted at source, any advance tax paid and any amount paid otherwise by way of tax or interest, then, without prejudice to the provisions of Sub-section (2), an intimation shall be sent to the assessee specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under Section 156 and all the provisions of this Act shall apply accordingly; and
(ii) if any refund is due on the basis of such return, it shall be granted to the assessee;
Provided that in computing the tax or interest payable by or refundable to, the assessee, the following adjustments shall be made in the income or loss declared in the return, namely :
(i) any arithmetical errors in the return, accounts or documents accompanying it shall be rectified :
(ii) any loss carried forward, deduction, allowance or relief, which, on the basis of the information available in such return, accounts or documents, is prima fade admissible but which is not claimed in the return, shall be allowed :
(iii) any loss carried forward, deduction, allowance or relief claimed in the return, which, on the basis of the information available in such return, accounts or documents, is prima facie inadmissible, shall be disallowed.”
A perusal of the above clearly shows that the adjustments permissible have been enumerated in Clauses (i), (ii) and (iii) of the first proviso to Section 143(1)(a) of the Act. Clause (i) talks about correction of arithmetical errors, Clause (ii) relates to grant of relief to the assessee which is found due but not claimed in the return, and Clause (iii) deals with disallowance of claims of brought forward loss, deduction, allowance or other reliefs claimed in the return which are, prima facie, inadmissible. None of these clauses confer any authority on the AO to make any adjustment by way of making addition of any income under Section 64(1A) of the Act or of any other income not claimed by the assessee to be his own. The AO has clearly transgressed his authority under Section 143(1) of the Act by adding the income of the minor sons of the assessee towards her total income under Section 143(1)(a) of the Act. The view expressed by the Rajasthan High Court in Suparas Mal Kothari’s case (supra), on which reliance has been placed by the Tribunal, in our opinion, is the correct view and we respectfully follow the same.
Accordingly we find no merit in these appeals which are dismissed.