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CMA Intermediate · Direct and Indirect Taxation · Self-Assessment and Intimation

A return of income is filed on time. While processing it under section 270, the Centralised Processing Centre finds that the assessee has added two figures wrongly in the return, understating total income. What is the correct treatment under the Income-tax Act, 2025?

An arithmetical error in the return is corrected at processing when total income is computed. Before the adjustment is made, the assessee must be sent a communication, in writing or electronic mode, and any response considered. Hence the adjustment follows prior communication, not scrutiny or a defective-return route.

  1. AThe arithmetical error is adjusted in computing total income, after a communication of the proposed adjustment is given to the assesseeCorrect
  2. BThe error cannot be touched at processing and only a scrutiny notice can correct it
  3. CThe return is treated as defective and is deemed never to have been filed
  4. DThe adjustment is made at once without any communication, because arithmetical errors need no prior intimation

Explanation

Section 270(1)(a)(i) allows adjustment for any arithmetical error in the return. Section 270(2) requires a communication of the adjustment, in writing or electronic mode, before it is made. The option saying no communication is needed ignores 270(2).

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