CA Varun Gupta
Quick Summary
In recent months, the Income-tax Department has issued a significant number of notices and assessment orders under sections 143(3) and 148 of the Income-tax Act, particularly in view of the approaching limitation period. As a result, a large number of assessees have received assessment orders from t
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FAQ :
The first step is to classify the nature of the defect in the assessment order, rather than immediately selecting an appellate forum. This involves checking for jurisdictional issues, violations of natural justice, factual and legal sustainability of additions, and mistakes apparent from the record.
The principal statutory remedy for challenging additions, disallowances, or other substantive errors in an assessment order under section 143(3) is an appeal to the Commissioner (Appeals) under section 246A, which must typically be filed within thirty days.
An assessee can seek a stay of demand under section 220(3) or request to be treated as not in default under section 220(6) while an appeal is pending. This provides urgent practical relief from recovery machinery.
Rectification under section 154 is suitable for obvious errors apparent from the record, such as omitted TDS credit, arithmetical mistakes, or inconsistencies between the order and computation, but not for debatable legal controversies.
Section 270AA allows an assessee to apply for immunity from penalty and prosecution if the tax and interest are paid and no appeal is filed. It's beneficial for those who prefer closure over litigation, especially when the addition is manageable or the defense is weak.
The Income Tax Appellate Tribunal (ITAT) is the decisive second appellate stage. It is the final fact-finding authority and is important when the first appellate authority has erred in appreciating evidence or applying legal/factual approaches.
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