Assessment procedure at a glance
Section 140A – Self-assessment
An assessee himself assess the tax liability on income earned by him during previous year (PY) and submit his Return of Income (ROI) to the $$department.
Departmental Assessment
143(3) ----> Scrutiny assessment / Regular Assessment
143(2) ----> Notice for 143(3) assessment
144 ----> Best Judgement assessment (BJA)
144 ----> Notice for BJA
147 ----> Income Escaping assessment
148 ---->Notice for Income Escaping assessment
Inquiry before assessment – Section 142(1)
This section has 2 sub-clause in it
142(1)(i)
i. Applicable where ROI in not filed.
ii. Department feels assessee should have filed ROI, but assessee dint file. So here assessee is required to state reason to department for not filing ROI.
iii. Department can serve this notice only after time limit of filing ROI is over.
iv. Time Limit: Within 2 years from end of relevant assessment year (AY) in which income was first assessable.
142(1)(ii)
i. Applicable if ROI is filed.
ii. Through this section AO asks for Book of accounts and other documents on the basis of which ROI was filed.
iii. Details regarding personal asset (i.e assets not shown in ROI) can also be asked by AO, provided he gets prior approval from Joint Commissioner of Income Tax.
iv. Books of accounts can be asked maximum for 4 years (PY + 3 years back).
Special Audit - Section 142(2A) (Remember its Direction and not Order)
i. This section will come only if assessment is pending before AO. AO needs to get prior approval of Chief Commissioner/commissioner of IT.
ii. Accounts of the assessee is complicated so AO directs (not order) assessee to go to CA and get his book audited. This needs to be done even if books of accounts are already audited. Before passing such a direction opportunity of being heard must be given.
iii. CA is appointed by Chief Commissioner/commissioner of IT and fees of CA is also paid by department.
iv. Assessee is required to give CA all assistance and details required by him.
v. Time limit within which report has to be given by CA is decided by AO. Extension for such time limit is also given by AO on receipt of application from assessee. Maximum time for which extension can be given is 180 days.
Scrutiny assessment / Regular Assessment –Section 143
a. This section will come only when ROI is filed either U/S 139(1) [assessee filing on his own] or 142(1)(i) [assessee filing ROI after receiving notice from department].
b. If no ROI is filed this section does not apply
c. Time Limit: 6 months from end of the Financial year in which return was filed. Ex for the same is ROI filed on 10.10.2014 End of FY 31.03.15 add 6 months so time limit to SERVE notice 30/09/2015.
d. Order must be in writing and under this section AO can either increase or reduce income.
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