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

While processing a return under section 270(1), the department proposes an adjustment for a deduction claimed in excess of its statutory monetary limit. The assessee does not respond to the communication of the proposed adjustment. Which statement follows from section 270?

The adjustment can be made once thirty days pass from issue of the communication without a response, followed by the intimation. Section 270(2) requires prior communication, and an excess over the statutory limit is an incorrect claim apparent from the return.

  1. AThe adjustment can be made after thirty days from issue of the communication with no response, and then the intimation is sentCorrect
  2. BThe adjustment can be made immediately because the excess is apparent from the return
  3. CThe adjustment lapses unless the assessee responds within nine months
  4. DThe adjustment can be made only after an order following a notice under sub-section (8)

Explanation

Section 270(5)(a)(iii) treats a deduction exceeding a statutory limit as an incorrect claim apparent from the return. Under 270(2), a communication must be given before adjustment, and if no response arrives within thirty days of issue, the adjustments are made and then the intimation is sent. Immediate adjustment skips the mandatory communication.

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