tax urgent query

Answer to question no 1

Section 147 deals with the income escaping assessment. Where the assessing officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may assess or reassess such income other than the income which are subject matter of appeal, revision or reference and also any other income chargeable to tax which has escaped assessment

Circumstances under which income is considered as deemed to escaped assessment

1. No return filed by the assessee and income exceeded the maximum amount not chargeable to tax

2. Return filed by the assessee but there is understated income, excessive loss, deduction, allowance or relief claimed

3. Assessment has been made based on facts which are false or undetected or undecided and income chargeable to tax is under assessed or assessed at lower rate, excessive loss, deduction, depreciation, claim or allowance claimed

If loss return is not filed, then losses shall not be allowed to be carried forward and setoff in the subsequent year. like loss from PGBP, CG, SPECULATION LOSS

The Best Judgement Assessment is covered under Sec 144. The Assessing officer Can Make Best judgement Assessment when

1. The Assessee has'nt  filed the return u/s 139(1)

2. The Assessee has'nt  filed the return u/s 142(1)

3. The Assessing Officer feels that 145(1) has not been followed.