Remedial action
This query is : Resolved
15 May 2014
assessment compeleted on provisional balance sheet filed by the assessee, which do not match with the figures of e-return filed. A.O. completed the assessment on the basis of prov. B/S but the figures of e-return filed was not considered at all.
whether assessment is nullity, illegal or void ab intio or voidable?
whether assessment is nullity, illegal or void ab intio or voidable?
20 May 2014
anyone please... experts. give the answer please. need your advise
21 July 2025
In this situation, where the Assessing Officer (AO) completed the assessment based on a provisional balance sheet submitted by the assessee, ignoring the figures declared in the e-return, the following points are relevant:
Legal Position & Nature of Assessment
Assessment Validity:
The assessment order is not void ab initio (not invalid from the beginning) merely because AO relied on provisional balance sheet figures instead of the e-return figures.
AO has the discretion and duty to verify the correctness of income and can base his assessment on the most reliable data available, including provisional accounts if they form part of the return or are furnished.
Whether Assessment is Illegal or Void:
The assessment will be valid and binding unless it suffers from jurisdictional error or the procedure prescribed by the Income Tax Act has not been followed.
If the provisional balance sheet was part of the return or submitted before the assessment, AO’s decision to rely on it is within his powers.
However, if AO completely ignored the return filed and did not consider relevant material or opportunity was not given to the assessee to explain, it can be challenged as unfair or not in accordance with natural justice (voidable on account of procedural irregularity).
Voidable but not Void:
The assessment would be voidable, not void, which means it can be challenged before appellate authorities or courts but not automatically invalid.
Remedial Actions Available to Assessee
File Appeal: Under section 246A against the assessment order on grounds of non-consideration of e-return figures.
Request Reassessment/Rectification: If there is an error apparent from record, under section 154 or apply for reassessment under section 147/148 (if applicable).
Submission to AO: Represent to AO for reconsideration of figures and provide explanations/documents to reconcile differences.
Natural Justice: If AO did not provide opportunity of being heard on discrepancies, challenge on grounds of violation of principles of natural justice.
Legal Position & Nature of Assessment
Assessment Validity:
The assessment order is not void ab initio (not invalid from the beginning) merely because AO relied on provisional balance sheet figures instead of the e-return figures.
AO has the discretion and duty to verify the correctness of income and can base his assessment on the most reliable data available, including provisional accounts if they form part of the return or are furnished.
Whether Assessment is Illegal or Void:
The assessment will be valid and binding unless it suffers from jurisdictional error or the procedure prescribed by the Income Tax Act has not been followed.
If the provisional balance sheet was part of the return or submitted before the assessment, AO’s decision to rely on it is within his powers.
However, if AO completely ignored the return filed and did not consider relevant material or opportunity was not given to the assessee to explain, it can be challenged as unfair or not in accordance with natural justice (voidable on account of procedural irregularity).
Voidable but not Void:
The assessment would be voidable, not void, which means it can be challenged before appellate authorities or courts but not automatically invalid.
Remedial Actions Available to Assessee
File Appeal: Under section 246A against the assessment order on grounds of non-consideration of e-return figures.
Request Reassessment/Rectification: If there is an error apparent from record, under section 154 or apply for reassessment under section 147/148 (if applicable).
Submission to AO: Represent to AO for reconsideration of figures and provide explanations/documents to reconcile differences.
Natural Justice: If AO did not provide opportunity of being heard on discrepancies, challenge on grounds of violation of principles of natural justice.
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