Assess Pro 1

N.A.D.T., Nagpur APRIL, 2009

AS SESS MENT PRO CED URE SEC . 139 o nwar ds by

Dr Vinay Kumar Singh Additional Director (Faculty), NATIONAL ACADEMY OF DIRECT TAXES, NAGPUR

1

Introduction to Incometax .

LAW Voluntary compliance

CITIZENS OF INDIA Elections

C.s I.T. (Appeal)

LEGISLATURE OF INDIA

ORDERS

Asstt/Dep. Cs I.T. Addl./Jt.C.s I.T.

C.C.s I.T.

C.B.D.T.

Interpretation of

M.O.F.

intention of legislature

Intension of legislature

-Collection of revenue for PUBLIC GOODS -Redistribution of income -Behaviour modification

I.T.O.s

C.s I.T.

I.T.A.T. S.C. / H.C.

GOAL

I.T.I.s

POLICY -EQUITY -NEUTRALITY -EFFICIENCY -PREDICTABILITY -ADEQUACY

STATUTE

CASE LAWS

LAW -Standard text -Conveys intention of legislature to Administrators & compliers

ADMINISTRATION

-RULES -PROCEDURE -CONVENTIONS

2

PRINCIPLES OF NATURAL JUSTICE

Introduction to Incometax .

• LEGISLAT URE

JUDICIA RY

EXECUTIV E

• •

• •

Law is made by the representatives of the citizens All public servants work for the citizens of the country Executive has the responsibility of ensuring compliance of the Law Income tax authorities are QUASI-JUDICIAL in nature While exercising this responsibility, and while dealing with citizens, they must follow the basic principles of natural justice: – APPRECIATION OF EVIDENCE – OPPORTUNITY OF BEING HEARD 3 – SPEAKING ORDER

Introduction to IncomeLIMITATIONS ON AUTHORITY OF tax . EXECUTIVE

•

LIMITATION OF POWER – No action can be taken by an executive that impinges upon any of the rights of the citizens, unless the Law authorizes such action – Action can only be taken by the authority to whom the power is delegated, ONLY within his JURISDICTION – There must be application of mind by that authority – Action must be BONA-FIDE & NONDISCRIMINATORY (NEUTRALITY)

EXECUTIV E

•

LIMITATION OF TIME – Time limits often defined in the Act for certain actions – No action possible once BARRED BY TIME LIMITATION

•

LIMITATION OF INTERPRETATION – Words (& phrases) defined in the statute

4

Introduction to Incometax .

INCOME-TAX AUTHORITIES

Sec. 116. There shall be the following classes of income-tax authorities for the purposes of this Act, namely : (a) the Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of 1963), (b) Directors-General of Income-tax or Chief Commissioners of Income-tax, (c) Directors of Income-tax or Commissioners of Income-tax or Commissioners of Income-tax (Appeals), (cc) Additional Directors of Income-tax or Additional Commissioners of Income-tax or Additional Commissioners of Income-tax (Appeals), (cca) Joint Directors of Income-tax or Joint Commissioners of Incometax, (d) Deputy Directors of Income-tax or Deputy Commissioners of Income-tax or Deputy Commissioners of Income-tax (Appeals), (e) Assistant Directors of Income-tax or Assistant Commissioners of Income-tax, (f) Income-tax Officers, (g) Tax Recovery Officers, (h) Inspectors of Income-tax. 5

Introduction to Incometax .

INCOME-TAX AUTHORITIES EXECUTIVE

Sec. 2 (7A) Sec. 2 (28) Sec. 2 (25) Sec. 2 (9A) / 2(9B) / 2(19A)/ 2(19C) Sec. 2 (1C) / 2(1D) / 2(28C)/ 2(28D) Sec. 2 (16) Sec. 2 (15A) Sec. 2 (12)

Sec. 117 (1)

6

Introduction to Incometax .

ASSESSING OFFICER Sec. 2 (7A) Assessing Officer means the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of this Act, and the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director who is directed under clause (b) of sub-section (4) of that section to exercise or perform all or any of the powers and

7

Introduction to Incometax .

ASSESSING OFFICER Sec. 2 (7A) Assessing Officer

Sec. 120 Jurisdiction of income-tax authorities (1) Income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities. Explanation. For the removal of doubts, it is hereby declared that any income-tax authority, being an authority higher in rank, may, if so directed by the Board, exercise the powers and perform the functions of the income-tax authority lower in rank and any such direction issued by the Board shall be deemed to be a direction issued under sub-section (1). (2) The directions of the Board under sub-section (1) may authorise any other income-tax authority to issue orders

8

Introduction to Incometax .

ASSESSING OFFICER Sec. 2 (7A) Assessing Officer

Sec. 120 Jurisdiction of income-tax authorities 4) Without prejudice to the provisions of sub-sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein, (a) authorise any Director General or Director to perform such functions of any other income-tax authority as may be assigned to him by the Board; (b) empower the Director General or Chief Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases, shall be exercised or performed by an Additional Commissioner or an Additional Director or a Joint Commissioner or a Joint Director, and, where any order is made under this clause, references in any other provision of this Act, or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint

9

Introduction to Incometax .

ASSESSMENT OF INCOME RETURN OF INCOME Sec. 2 (9)

for the ASSESSMENT YEAR / PREVIOUS YEAR

Sec. 2 (24) Sec. 2 (34)

Sec. 2 (8)

ASSESSMENT of

ASSESSEE

INCOME

TAX

Sec. 2 (7)

Sec. 2 (43) 10

ASSESSEE

Introduction to Incometax .

Sec 2(7) assessee means a person by whom any tax or any other sum of money is payable under this Act, and includes

Not necessary to have actual proceedings inititiated and pending for being considered a assessee ITO vs. DDA [200] 252 ITR 772 (SC)

(a) every person in respect of whom any proceeding under this Act has been taken for the assessment of his income or assessment of fringe benefits or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person ; (b) every person who is deemed to be an assessee under any provision of 11 this Act ;

PERSON

Introduction to Incometax .

Sec(31) person includes (i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding subclauses. Explanation. For the purposes of this clause, an association of persons or a body of individuals or a local authority or an artificial juridical person shall be deemed to 12 or be a person, whether or not such person

Introduction to Incometax .

PREVIOUS YEAR / ASSESSMENT YEAR Sec 2 (34)

Sec 2 (9) assessment year means the period of twelve months commencing on the 1st day of April every year ;

Sec 3

Sec 3 Previous year defined. 3. For the purposes of this Act, previous year means the financial year immediately preceding the assessment year : Provided that, in the case of a business or profession newly set up, or a source of income newly coming into existence, in the said financial year, the previous year shall be the period beginning with the date of setting up of the business or profession or, as the 13

Introduction to Incometax .

PREVIOUS YEAR / ASSESSMENT YEAR Financial Act

e.g.. Sec 158B, Sec 174(1)

Part 1 , First schedule of Finance Act

Sec 4 Charge of income-tax. (1) Where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions (including provisions for the levy of additional income-tax) of, this Act in respect of the total income of the previous year of every person : Provided that where by virtue of any provision of this Act income-tax is to be charged in respect of the income of a period other than the previous year, income-tax shall be charged accordingly. (2) In respect of income chargeable under sub-section (1), 14 income-tax shall be deducted at the source or paid in

INCOME

Introduction to Incometax .

Sec 2 (24)

SALARIES

HEADS OF INCOME Sec 14

Sec 17

HOUSE Sec 22 PROPERTY Sec 28 BUSINESS OR PROFESSION CAPITAL GAINS Sec 45 OTHER SSOURCES

Sec 56 15

INCOME

Introduction to Incometax .

Rs.

OPENING STOCK PURCHASES ELECTRICITY GROSS PROFIT

SALARIES 30 RENT TRAVELLING OFFICE EXPENSES 10 NET PROFIT

100 200 100 100 -----500 ------

20 10

40 ------

Rs.

SALE RECEIPTS CLOSING STOCK

300 200

-----500 -----GROSS PROFIT 100 INTEREST ON LATE PAYMENTS 10

------110

110

Net profit as per accounting / books may be different from the ‘profit & gains’ referred in IT Act as certain expenses clamed may not be allowable as deduction. 16

Introduction to Incometax .

RETURN OF INCOME Return of income

Section 139 (1) Every person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.

Rule 12 - Return of income and Return of Fringe benefits

ITR - 1 TO 8 17

ASESSMENT

Introduction to Incometax .

Sec 139 (1)

Sec 2 (8) 18

ASESSMENT

Introduction to Incometax .

Sec 2 (8) assessment includes reassessment ;

Sec (40) regular assessment means the assessment made under subsection (3) of section 143 or section 144 ; Sec 143 (3) (3) On the day specified in the notice -

(i) issued under clause (i) of sub-section (2), or as soon afterwards as may be, after hearing such evidence and after taking into account such particulars as the assessee may produce, the Assessing Officer shall, by an order in writing, allow or reject the claim or claims specified in such notice and make an assessment determining the total income or loss accordingly, and determine the sum payable by the assessee on the basis of such assessment. ................ 19

ASESSMENT

Introduction to Incometax .

Sec 2 (8) assessment includes reassessment ;

144. Best judgment assessment

 Sec 144 (1) If any person(a) fails to make the return required under sub-section (1) of section 139 and has not made a return or a revised return under subsection (4) or sub-section (5) of that section, or (b) fails to comply with all the terms of a notice issued under subsection (1) of section 142 or fails to comply with a direction issued under sub-section (2A) of that section, or (c) having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143, The Assessing Officer, after taking into account all relevant material which the Assessing Officer has gathered, shall, after giving the assessee an opportunity of being heard, make the assessment of the total income or loss to the best of his judgment and determine the sum payable by the assessee on 20 the basis of such assessment:

ASESSMENT

Introduction to Incometax .

Sec 2 (8) assessment includes reassessment ; Income escaping assessment Sec 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): …………..

21

ASESSMENT

Introduction to Incometax .

Sec 2 (8) assessment includes reassessment ; Self-assessment   Sec 140A (1) Where any tax is payable on the basis of any return required to be furnished under section 139 or section 142 or, as the case may be, section 148, after taking into account the amount of tax, if any, already paid under any provision of this Act, the assessee shall be liable to pay such tax together with interest payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, before furnishing the return and the return shall be accompanied by proof of payment of such tax and interest.

22

ASESSMENT

Introduction to Incometax .

Sec 2 (8) assessment includes reassessment ; Processing of Return Sec 143(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner namely :•The total income or loss shall be computed after making the following adjustments namely:(i) any arithmetical error in the return; or (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; ………………… (d) An intimation shall be prepared or generated and sent to the assessee… (e) The amount of refund due to the assessee ….. shall be 23

Introduction to Income-tax .

ASESSMENT RETURN OF INCOME for the ASSESSMENT YEAR / PREVIOUS YEAR

SELF ASSESSM ENT

PROCESSING OF RETURN Sec 2 (29) BOOKS OF ACCOUNT S DOCUMEN TS Sec 2 (22AA) ASSESSMENT of INCOME

Sec 2 (29) LEGAL REPRESENTATI VE

ASSESSEE AUTHORISED REPRESENTATI VE

Sec 288 (2)

REASSESSMENT of INCOME

TAX 24

ASESSMENT

Introduction to Incometax .

Sec 2 (29) legal representative has the meaning assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908 (5 of 1908) Code of Civil Procedure, 1908 Sec 2 (11) "legal representative" means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character the person on whom the estate devolves on the death of the partyor sobooks suing or Sec 2(12A) books of sued; account includes ledgers, daybooks, cash books, account-books and other books, whether kept in the written form or as print-outs of data stored in a floppy, disc, tape or any other form of electro-magnetic data storage device; Sec 2 (22AA) document includes an electronic record as defined in clause (t)3 of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);

25

Introduction to Incometax .

AUTHORISED REPRESENTATIVE

Sec 288. (1) Any assessee who is entitled or required to attend before any income-tax authority or the Appellate Tribunal in connection with any proceeding under this Act otherwise than when required under section 131 to attend personally for examination on oath or affirmation, may, subject to the other provisions of this section, attend by an authorised representative.  (2) For the purposes of this section, "authorised representative" means a person authorised by the assessee in writing to appear on his behalf, being(i) a person related to the assessee in any manner, or a person regularly employed by the assessee; or (ii) any officer of a scheduled bank with which the assessee maintains a current account or has other regular dealings; or Explanation.-In this section, "accountant" means a chartered accountant (iii) any legal practitioner who is entitled to practise in any civil within the meaning of the Chartered Accountants Act, 1949 (38 of 1949), court in India; or and includes, in relation to any State, any person who by virtue of the (iv) an accountant; or

provisions of sub-section (2) of section 226 of the Companies Act, 1956 (1 of 1956), is entitled to be appointed to act as an auditor of companies registered in that State. Chartered Accountants Act, 1949 26 Section 2(1)(b) "chartered accountant" means a person who is a member

Introduction to Incometax .

AUTHORISED REPRESENTATIVE Sec 288. (2) For the purposes of this section, "authorised representative" means..

(v) any person who has passed any accountancy examination recognised in this behalf by the Board-,' or (vi) any person who has acquired such educational qualifications as the Board may prescribe for this purpose; or (via)any person who, before the coming into force of this Act in the Union territory of Dadra and Nagar Haveli, Goa, Daman and Diu, or Pondicherry, attended before an income-tax authority in the said territory on behalf of any assessee otherwise than in the capacity of an employee or relative of that assessee; or] (vii) any other person who, immediately before the commencement of this Act, was an income-tax practitioner within the meaning of clause (iv) of sub-section (2) of section 61 of the Indian Income-tax Act, 1922 (11 of 1922), and was actually practising as such. 27  

TAX

Introduction to Incometax .

28

TAX

Introduction to Incometax .

29

TAX

Introduction to Incometax .

30

Introduction to Incometax .

TAX XYZ T.D.S. PAYMEN TS

ASSESSEE

SELF ASSESSME NT

ADVANCE TAX

SELF ASSESSMENT TAX

[+ INTEREST ]

TAX DEMAND

ASSESSME NT

ASSESSING OFFICER 31

Introduction to Incometax .

AGRICULTURAL INCOME

CONDITIONS : (i) Person to whom Para A of Part I applies : Individual, HUF, AOP, BOI, AJP (ii) Total income > the max non-taxable income (iii) Agri income > Rs 5000 COMPUTE AGRI INCOME FROM EACH SOURCE SEPERATELY

INCOME PARTIALLY AGRICULTURE, PARTIALLY BUSINESS

+ + + +

SUM OF AGRICULTURAL INCOME FROM ALL SOURCES

-

UNABSORBED AGRI LOSS OF A PY OF EARLIER (8) AY

+

DEEMED AGRI INCOME – SHARE IN AOP [R-5]

ANY LOSS MAY BE ADJUSTED AGAINST OTHER AGRI INCOME EXCEPT THE LOSS ARISING FROM SHARE OF AOP

NET AGRI INCO ME

IF IT IS A LOSS, DEEMED TO BE NIL

Carried forward

32

ASESSMENT

Introduction to Incometax .

TOTAL INCOME Sec 2 (45)

33

TOTAL INCOME

Introduction to Incometax .

Sec 2(45) total income means the total amount of income referred to in section 5, computed in the manner laid down in this Act Sec 5 (1) Subject to the provisions of this Act, the total income of any previous year of a person who is a resident includes all income from whatever source derived which  (a) is received or is deemed to be received in India in such year by or on behalf of such person ; or  (b) accrues or arises or is deemed to accrue or arise to him in India during such year ; or  (c) accrues or arises to him outside India during such year : Provided that, in the case of a person not ordinarily resident in India within the meaning of sub-section (6) of section 6, the income which accrues or arises to him outside India shall not be so included unless it is derived from a business controlled in or a profession set up in India. 34  

TOTAL INCOME

Introduction to Incometax .

Sec 2(45) total income means the total amount of income referred to in section 5, computed in the manner laid down in this Act Sec 5 (2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non-resident includes all income from whatever source derived which  (a) is received or is deemed to be received in India in such year by or on behalf of such person ; or  (b) accrues or arises or is deemed to accrue or arise to him in India during such year.  Explanation 1. Income accruing or arising outside India shall not be deemed to be received in India within the meaning of this section by reason only of the fact that it is taken into account in a balance sheet prepared in India.  Explanation 2. For the removal of doubts, it is hereby declared that income which has been included in the total income of a person on the basis that it has accrued or arisen or is deemed to have accrued or arisen to him shall not again be so included on35

Introduction to Incometax .

GROSS TOTAL INCOME

CHAPTER VI A DEDUCTIONS IN RESPECT OF CERTAIN INCOME Sec 80B In this chapter (5) "gross total income" means the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter

GROSS TOTAL INCOME

-

DEDUCTIONS UNDER CHAPTER VI A

=

TOTAL INCOME

36

TOTAL INCOME +

SALARY

+

HOUSE PROPERTY

+

OTHER SOURCES

+

+

LTCG

GROSS TOTAL INCOME

+

-

for adjustment of losses, CHAPTER VI

INCOME ON WHICH NO INCOME-TAX IS PAYABLE UNDER CHAPTER VII

+

STCG

INCOME OF OTHER PERSONS INCLUDED IN TOTAL INCOME (CHAPTER V)

+

BUSINESS & PROF

+

Introduction to Incometax .

CASH CREDITS, UNEXPLAINED INVESTMENTS, EXPENDITURE ETC. (Sec 68,69A,69B,69C,69D)

DEDUCTIONS UNDER CHAPTER VI A

=

TOTAL INCOME 37

RESIDENT

Introduction to Incometax .

Sec 2 (42) resident means a person who is resident in India within the meaning of section 6 Sec 2 (30) non-resident means a person who is not a resident , and for the purposes of sections 92, 93 and 168, includes a person who is not ordinarily resident within the meaning of clause (6) of section 6 ;

38

Introduction to Incometax .

10

9

8

7

6

5

4

3

2

1

199899

199900

200001

200102

200203

200304

200405

200506

200607

200708

RESIDENT

2008-09

≥ 182 DAYS

≥ 365 DAYS

≥ 60 DAYS

NON-RESIDENT IN ≥ 9 YEARS

≤ 729 DAYS

39

Assessment Procedure

ASSESSMENT PROCEDURE • CHAPTER XIV of INCOME TAX ACT 1961

• ASSESSMENT PROCEDURE • Sec 139 to 158 CASE LAWS

FORMS NOTIFICATIONS CIRCULARS

• PART III of INCOME TAX RULES 1962

• ASSESSMENT PROCEDURE • Rule 12 to 15 40

.

Assessment Procedure

RETURN OF INCOME Sec 139 (1) Every person, • being a company or a firm; or (b) being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed : Sec 2 (33) prescribed means prescribed by rules made under this Act ; 41

.

Assessment Procedure

prescribed form

RETURN OF INCOME

Rule 12. (1) The return of income required to be furnished under sub-section (1) or sub-section (3) or sub-section (4A) or sub-section (4B) or sub-section (4C) or sub-section (4D) of section 139 or clause (i) of sub-section (1) of section 142 or sub-section (1) of section 148 or section 153A or the return of fringe benefits required to be furnished under sub-section (1) or sub-section (2) of section 115WD relating to the assessment year commencing on the 1st day of April, 2008 shall, (a) in the case of a person being an individual where the total income includes income chargeable to income-tax under the head Salaries or income in the nature of family pension as defined in the Explanation to clause (iia) of section 57 but does not include any other income except income by way of interest chargeable to income-tax under the head Income from other sources, be in Form No. ITR-1 and be verified in the manner indicated therein; (b) in the case of a person being an individual not being an individual to whom clause (a) applies or a Hindu 42 undivided family where the total income does not include

.

Assessment Procedure

prescribed form

RETURN OF INCOME

A snapshot from https://incometaxindiaefiling.gov.in/portal/individual_huf.do

43

.

Assessment Procedure

prescribed form

RETURN OF INCOME A snapshot from ITR-1

RULE 12 (1) (a)

“...............................verified in the manner indicated therein” 44

.

Assessment Procedure

RETURN OF INCOME Sec 139 (1) Every person, (b) being a company or a firm; or

or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded

(b) being a person other than a company or a firm, if his total income

the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be Sec 2(7) assessee means a person by whom any tax or any other sum of money is prescribed :

payable under this Act, and includes

(b) every person who is deemed to be an assessee under any provision of this Act CHAPTER XV LIABILITY IN SPECIAL CASES

Sec 159 – LEGAL REPRESENTATIVE

(a)Agent of a non-resident

Sec 160 – REPRESENTATIVE ASSESSEE

(b) Guardian / Manager of minor/lunatic/idiot

Sec 163 – AGENT Sec 168 – EXECUTOR Sec 170 – SUCCESSOR

(c) Court of wards/ Administrator General/ Trustee appointed by court (d) Trustee (trust with

45

.

Assessment Procedure

RETURN OF INCOME Sec 139 (1) Every person, (b) being a company or a firm; or (b) being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed :

Explanation 2.In this sub-section, due date means, • where the assessee is (i) a company; or (ii) a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or (iii) a working partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force, the 30th day of September of the assessment year; (substituted by Finance Act 2008, w.e.f. 1.4.2008)

(b) ……. (c) in the case of any other assessee, the 31st day of July of the assessment year 46

.

Assessment Procedure

RETURN OF INCOME Sec 139 (1) Who should file; when; how

Sec 139

PROVIS O-1 PROVIS O-2 PROVIS O-3 PROVIS O-4

One by six scheme … ……...up to AY 2005-06 Every co. / firm to file return Filing of return reqd, if TOTAL INCOME without giving effect to Exemptions u/s 10A, 10B, 10BA or deduction u/ Chap VI A exceeds amount not chargeable to tax

Provided also that every person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, whether incorporated or not, or an artificial juridical person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year, without giving effect to the provisions of section 10A or section 10B or section 10BA or Chapter VI-A exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed. 47

.

Assessment Procedure

RETURN OF INCOME

(1 A) (1 B) (3)

Scheme of filing of returns by salaried employees through Schemeemployer, for bulk 2004 filing of returns by Filing of return by salaried employees through employer salaried employees,2002 E – filing of return Electronic furnishing of returns of income scheme 2007 Return to be filed for carrying forward a LOSS under ‘Profits & gains from business & profession’ or ‘capital gains’

Sec 80. Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed in accordance with the provisions of sub-section (3) of section 139, shall be carried forward and set off under sub-section (1) of section 72 or sub-section (2) of section 73 or subsection (1) or sub-section (3)] of section 74 or sub-section (3) of section 74A. Loss under ‘House property’ ?? u/s 71B

?? 48

.

Assessment Procedure

RETURN OF INCOME

(1 A) (1 B) (3)

Scheme of filing of returns by salaried employees through Schemeemployer, for bulk 2004 filing of returns by Filing of return by salaried employees through employer salaried employees,2002 E – filing of return Electronic furnishing of returns of income scheme 2007 Return to be filed for carrying forward a LOSS under ‘Profits C / F LOSS RETURN & gains from business & profession’ or ‘capital gains’

(4)

BELATED RETURN

(4 A) (4 B)

CHARITABLE TRUST

Filing of return reqd, if TOTAL INCOME without giving effect to Sec 11 & 12 exceeds max amount not taxable

POLITICAL PARTY

Filing of return reqd, if TOTAL INCOME without giving effect to Sec 13A exceeds max amount not taxable

Up to one year from the end of relevant AY or assessment

49

.

Assessment Procedure

RETURN OF INCOME

(4 C) (4 D) (5)

For certain institutions / associations/trade unions - Filing of return reqd, if TOTAL INCOME without giving effect to clause 21 / 22B/ 23A / 23B / 23C of Sec 10 exceeds max INSTITUTIONS U/S 10 amount not taxable UNIVERSITY COLLEGE

Every University, college or educational institute referred in clause (ii) or (iii) of Sec 35 (1) not otherwise required to file return – REQD.

REVISED RETURN

(6)

Information to be furnished

(6 A) (9)

Audit report etc

On discovery of omission / wrong statement – up to one year from the end of relevant AY or assessment

income exempt, assets, bank account, credit card, expenditure, other outgoings s may be PRESCRIBED Audit return, principal place, branches, partners, members etc

DEFECTIVE RETURN

If AO considers return defective – opportunity for rectify within 15 days / time allowed by AO 50

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Assessment Procedure

RETURN OF INCOME Sec 139 (9) Where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the Assessing Officer may, in his discretion, allow; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return : Provided that where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the Assessing Officer may condone the delay and treat the return as a valid 51 return.

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Assessment Procedure

RETURN OF INCOME Sec139(9) Explanation. For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely : (a) the annexures, statements and columns in the return of income relating to computation of income chargeable under each head of income, computation of gross total income and total income have been duly filled in; (b) the return is accompanied by a statement showing the computation of the tax payable on the basis of the return; (bb) the return is accompanied by the report of the audit referred to in section 44AB, or, where the report has been furnished prior to the furnishing of the return, by a copy of such report together with proof of furnishing the report;

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Assessment Procedure

RETURN OF INCOME Sec139(9) Explanation. For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely : (c) the return is accompanied by proof of (i) the tax, if any, claimed to have been deducted or collected at source and the advance tax and tax on selfassessment, if any, claimed to have been paid Provided that where the return is not accompanied by proof of the tax, if any, claimed to have been deducted or collected at source, the return of income shall not be regarded as defective if (a) a certificate for tax deducted or collected was not furnished under section 203 or section 206C to the person furnishing his return of income; (b) such certificate is produced within a period of two years specified under sub-section (14) of section 155; (ii) the amount of compulsory deposit, if any, claimed to have 53

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Assessment Procedure

RETURN OF INCOME Sec139(9) Explanation. For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely : (d) where regular books of account are maintained by the assessee, the return is accompanied by copies of • manufacturing account, trading account, profit and loss account or, as the case may be, income and expenditure account or any other similar account and balance sheet; (ii) in the case of a proprietary business or profession, the personal account of the proprietor; in the case of a firm, association of persons or body of individuals, personal accounts of the partners or members; and in the case of a partner or member of a firm, association of persons or body of individuals, also his personal account in the firm, association of persons or body of individuals; 54

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Assessment Procedure

RETURN OF INCOME Sec139(9) Explanation. For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely : (e) where the accounts of the assessee have been audited, the return is accompanied by copies of the audited profit and loss account and balance sheet and the auditors report and, where an audit of cost accounts of the assessee has been conducted, under section 233B of the Companies Act, 1956 (1 of 1956), also the report under that section; (f) where regular books of account are not maintained by the assessee, the return is accompanied by a statement indicating the amounts of turnover or, as the case may be, gross receipts, gross profit, expenses and net profit of the business or profession and the basis on which such amounts have been computed, and also 55 disclosing the amounts of total sundry debtors, sundry

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Assessment Procedure

RETURN OF INCOME Who should file a return ?

56

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Assessment Procedure

prescribed form

RETURN OF INCOME A snapshot from ITR-1

WHO SHOULD SIGN ?? Sec 140 57

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Introduction to Incometax .

WHO SHOULD SIGN ?

Absent from India  by PERSON DULY AUTHORISED Can NOT sign  by PERSON DULY AUTHORISED INDIVIDUAL himself Mentally incapacitated  GUARDIAN

INDIVUD UAL H.U.F

COMPAN Y FIRM AOP / BOI

KARTA if absent from India / mentally incapacitated  ANY ADULT MEMBER Co being wound up  by LIQUIDATOR [ sec 178 (1) ] Co. NOT RESIDENT by PERSON HAVING P.O.A. (enclosed with return) MANAGING DIRECTOR  if no MD / MD can’t sign  DIRECTOR Management taken over by Governmant  PRINCIPAL OFFICER MANAGING PARTNER can’t sign / no Managing partner  ANY PARTNER (major) Any MEMBER / PRINCIPAL OFFICER

POLITICAL PARTY

CHIEF EXECUTIVE OFFICER

LOCAL AUTHORITY

PRINCIPAL OFFICER ANY OTHER THAT PERSON / PERSON COMPETENT TO ACT PERSON ON ITS BEHALF Art. Juridical PERSON

58

Assessment Procedure

RETURN OF INCOME RULE 12 ITR 1 TO 8

What if the return could not be filed by the DUE DATE What if the return filed is found by assessee to be defective

How to file a return ?

What if the return filed is found by A O to be defective 59

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Assessment Procedure

RETURN OF INCOME WHAT HAPPENS IF

Up to one year from the end of relevant AY or assessment

Return not Return not filed by verified as DUE DATE prescribed AFTER one year from the end Return not of relevant AY or assessment filed in SIGNE D BY prescribed WRON form

G PERSO N

Return invalid RULE 12 ITR 1 TO 8

Return not rectifie

NO RETURN

60

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Assessment Procedure

RETURN OF INCOME WHAT HAPPENS IF

NO RETURN Notice u/s 142 (1) Penalty u/s 271 F c/f losses u/s 80 not allowed Prosecution u/s 276CC Sec 271F. If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the provisos to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand rupees. RULE 12 ITR 1

61

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Assessment Procedure

RETURN OF INCOME WHAT HAPPENS IF

. Penalty u/s 272A(2) Rs.100/-for every day during which the failure continues

RULE 12 ITR 1

NO RETURN Notice u/s 142 (1) Penalty u/s 271 F c/f losses u/s 80 not allowed Prosecution u/s 276CC

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Assessment Procedure

RETURN OF INCOME Sec 276CC. If a person wilfully fails to furnish in due time the return of fringe benefits which he is required to furnish under subsection (1) of section 115WD or by notice given under sub-section (2) of the said section or section 115WH or the return of income which he is required to furnish under sub-section (1) of section 139 or by notice given under 37clause (i) of sub-section (1) of section 142 or section 148 38or section 153A, he shall be punishable, (i) in a case where the amount of tax, which would have been evaded if the failure had not been discovered, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine; (ii) in any other case, with imprisonment for a term which shall not be less than three months but which may extend to three years and with fine: Provided that a person shall not be proceeded against under this section for failure to furnish in due time the return of fringe benefits under sub-section (1) of section 115WD or return of income under subsection (1) of section 139 (i) for any assessment year commencing prior to the 1st day of April, 1975; or

(ii) for any assessment year commencing on or after the 1st day of April 1975, if

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Assessment Procedure

RETURN OF INCOME 4. Annexure-less Form No document (including TDS certificate) should be attached to this form. Official receiving the return has been instructed to detach all documents enclosed with this form and return the same to the assessee.

TDS certificates, Audit reports etc not attached with the return RULE 12 ITR 1

WHAT HAPPENS IF

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Assessment Procedure

RETURN OF INCOME Sec 139C Power of Board to dispense with furnishing documents, etc., with the return. (1) The Board may make rules providing for a class or classes of persons who may not be required to furnish documents, statements, receipts, certificates, reports of audit or any other documents, which are otherwise under any other provisions of this Act, except section 139D, required to be furnished, along with the return but on demand to be produced before the Assessing Officer. Officer (2) Any rule made under the proviso to sub-section (9) of section Proviso Sec 139 (9) [Omitted byits theomission Finance Act, 2007, 139 asto it stood immediately before by the w.r.e.f. 1-6-2006] Provided that the Board may,been by rules made Finance Act, 2007 shall be deemed to have made by it,— the   (a) provisions dispense, of forthis a class or classes of persons, with under section. any of the conditions specified in clauses (a) to (f); or   (b)  include any of the conditions specified in clauses (a) to (f) of this Explanation in the form of return prescribed under subsection (1) or sub-section (6) of this section.” 65

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Assessment Procedure

RETURN OF INCOME  Can two total incomes (e.g... of an individual & karta of HUF) be clubbed in a single return ?  No ........................... 164 ITR 134 (SC)  Can an illegally constituted entity file a return of income (e.g.. A firm constituted in contravention of the provisions of law) ?  Madanmohan Pal vs CIT, (1994) 209 ITR 374, 379 (Allahabad)  Is it mandatory to file a return in case of loss ?  No  Can unabsorbed depreciation be carried forward ?  Yes ……………………………………….. Madanmohan Pal vs CIT, (1994) 209 ITR 374, 379 (Allahabad)  Which assessment is referred to in Sec 139 (4) ? Best judgement assessment u/s 144  Whether a return submitted after assessment completed but before the notice of demand is served would be valid ?  No ………………..Balechand vs ITO (1969) 72 ITR 197 (SC)  Whether a return filed after cancellation of Best judgement assessment (within one year from the end of the relevant AY) is a valid return ?  Yes ……………………………… Ram Bilas Kedarnath vs ITO (1963) 47 66 ITR 586 (All)

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Assessment Procedure

RETURN OF INCOME  Can assessee revise his return whenever he wishes to do so ?  No ; He can only revise if there was an omission or error in the original return and the same was due to a bonafide inadvertence or mistake on the part of the assessee …………………………………… Sunanda Ram Deka vs CIT (1994) 210 ITR 988, 990 (Gauh)  Can assessee file a revised return in case where his original return was based on his own books of accounts which he claims are correct ?  No …………………… CIT vs India’s Hobby Centre (P) Ltd [(1995) 78 Taxman 377, 384 (Cal)  The circular no. 653 dated 15-6-1993 issued in connection with section 80D say: when the Act permits the filing of revised return, it is expected to be considered by the assessing authority, if the same is filed before the assessment order is made by it; otherwise, the very purpose of giving such a right would be frustrated.  Is it mandatory to file a return in case of loss ?  No  Can a revised return be filed in a case of return filed u/s 139(4) ?  No ……………………………………….. Kumar Jagdish Chandra Sinha v. CIT [(1996) 220 ITR 67, 75, 74(SC) ?  Can a revised return be revised again ? 67  YES ………………….. Niranjan Lal Ram Chandra v. CIT, (1982) 134 ITR

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Assessment Procedure

RETURN OF INCOME  Can assessee file a return of income after assessment is completed ?  No ; …………………………………… Balchand vs. ITO(1969) 72 ITR 197 (SC)  Can assessee file a return after a notice for reassessment of income has been issued to him ?  Yes …………………… CIT vs B v R Glucose Products Ltd (2001) 250 ITR 512 (AP)  Can an assessee file a revised return u/s 139(5) to revise a return in which income was willfully evaded or concealed ?  No ……………………..Sunanda Ram Deka vs. CIT (1994) 210 ITR 988 (Gau)  Will an application to the AO disclosing some additional income amount to a revised return ?  No ……………………..Gopaldas Parshottamdas vs. CIT (1941) 9 ITR 130 (All)  Can a revised return be filed to change the status ? Can a revised return be filed to change the accounting method ?  No ……………………………………….. Deep Narain Nagu & Co. v. CIT [(1986) 157 ITR 37 (MP) 68  Can a return filed u/s 139(3) be revised ?  YES ………………….. CIT v. Periyar Dist Coop Milk Producers Union Ltd

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Assessment Procedure

RETURN OF INCOME  A return showing u/s 139 (1) filed by an individual with total income below taxable limit – is it a valid return?  Yes ; …………………………………… CIT vs. Ranchhoddas Karsandas (1959) 36 ITR 569 (SC)  Return filed in a wrong form – will it be invalid?  No …………………… Dhampur Sugar Mills Ltd vs. CIT (1973) 90 ITR 236 (All)  Will a return (prior to AY 2007-08) submitted without necessary annexures be invalid ?  No …………………….. Dhampur Sugar Mills Ltd vs. CIT (1973) 90 ITR 236 (All)  Can an unsigned return be treated as defective u/s 139 (9) ?  No . It is an INVALID return……………………..Khialdas & sons vs. CIT (1997) 227 ITR 960 (MP)  What will happen where on a return , in place of the signature of the assessee (an illetrate individual), his name was written on his behalf and on his request, by his son?  INVALID return, since the statute requires a physical contact between the person verifying the return (whether a return of hos own income, or of another person in a representative capacity) and the 69 signature or the mark put on the return ………………………………………..

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Assessment Procedure

Sec 139 (8) Sec 139(8) (a) Where the return under sub-section (1) or sub-section (2) or sub-section (4) for an assessment year is furnished after the specified date, or is not furnished, then whether or not the Assessing Officer has extended the date for furnishing the return under subsection (1) or sub-section (2), the assessee shall be liable to pay simple interest at fifteen per cent per annum, reckoned from the day immediately following the specified date to the date of the furnishing of the return or, where no return has been furnished, the date of completion of the assessment under section 144, on the amount of the tax payable on the total income as determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source : Provided that the Assessing Officer may, in such cases and under such circumstances as may be prescribed, reduce or waive the interest payable by any assessee under this sub-section. ………………………………………………… *(c) The provisions of this sub-section shall apply in respect of the assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, and references therein to the other provisions of this Act shall be construed as references to the said provisions as they were applicable to the relevant assessment year.

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Assessment Procedure

P.A.N. Sec 139A. (1) Every person,  (i) if his total income or the total income of any other person in respect of which he is assessable under this Act during any previous year exceeded the maximum amount which is not chargeable to incometax; or  (ii) carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed five lakh rupees in any previous year; or  (iii) who is required to furnish a return of income under sub-section (4A) of section 139; or  (iv) being an employer, who is required to furnish a return of fringe benefits under section 115WD,

31stMay

Before the end of the accounting year Before the end of the accounting year

Rule 114

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Assessment Procedure

P.A.N. Sec 139A. (1A) Notwithstanding anything contained in subsection (1), the Central Government may, by notification in the Official Gazette, specify, any class or classes of persons by whom tax is payable under this Act or any tax or duty is payable under any other law for the time being in force including importers and exporters whether any tax is payable by them or not and such persons shall, within such time as mentioned in that notification, apply to the Assessing Officer for the allotment of a permanent account number.  

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Assessment Procedure

P.A.N. The Central Govt. by notification no. 11468, dated 29.8.2000 has notified the following class or classes of persons who shall apply to the A.O. for allotment of PAN • Exporters and Importers as defined in section 2(20) and section 2(26) of the Customs Act, 1961, who are required to obtain an importer-exporter code under section 7 of the Foreign Trade (Development and Regulation)Act, 1992. • Assessees as defined in rule 2(3) of Central Excise Rules, 1944. • Persons who issue invoices under rule 57AE i.e. traders, etc, requiring registration under Central Excise Rules, 1944. • Persons who are assessees under service tax. The above persons shall apply for allotment of PAN within 15 days of the date of publication of the notification in the Official Gazette. However, persons who may fall in the above category, after the date of the above notification, shall apply for allotment of PAN: • (a) in case of (I) above, before making an import or export; • (b) in case of (ii) and (iii) above, before making am application for registration under central excise;

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Assessment Procedure

P.A.N. •

The Central Govt. by notification no. 355/2001, dated 11-122001 has further notified the following class or classes of persons:

•

Persons registered under the Central Sales Tax Act, 1956 or the general sales tax law of the appropriate State or Union Territory, as the case may be. As on the date of this notification, a person falling within a class or classes of persons referred to in paragraph I, shall apply for the allotment of PAN within thirty days of the date of publication of this notification in the Official Gazette. A person who may fall within such class or classes of persons after the date of this notification, as is referred to in paragraph (I), shall apply for the allotment of (PAN) before making any application for registration under the Central Sales Tax Act, 1956 or the general sales tax law of the appropriate State or Union Territory, as the case may be.

•

•

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Assessment Procedure

P.A.N. Sec 139A. (1A) Notwithstanding anything contained in subsection (1), the Central Government may, by notification in the Official Gazette, specify, any class or classes of persons by whom tax is payable under this Act or any tax or duty is payable under any other law for the time being in force including importers and exporters whether any tax is payable by them or not and such persons shall, within such time as mentioned in that notification, apply to the Assessing Officer for the allotment of a permanent account number.  (1B) Notwithstanding anything contained in sub-section (1), the Central Government may, for the purpose of collecting any information which may be useful for or relevant to the purposes of this Act, by notification in the Official Gazette, specify, any class or classes of persons who shall apply to the Assessing Officer for the allotment of the permanent account number and such persons shall, within such time as mentioned in that notification, apply to the Assessing Officer for the allotment of a permanent account number.  (2) The Assessing Officer, having regard to the nature of

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Assessment Procedure

P.A.N. Sec 139A.   (3) Any person, not falling under sub-section (1) or sub-section (2), may apply to the Assessing Officer for the allotment of a permanent account number and, thereupon, the Assessing Officer shall allot a permanent account number to such person forthwith.  (4) For the purpose of allotment of permanent account numbers under the new series, the Board may, by notification in the Official Gazette, specify the date from which the persons referred to in sub-sections (1) and (2) and other persons who have been allotted permanent account numbers and residing in a place to be specified in such notification, shall, within such time as may be specified, apply to the Assessing Officer for the allotment of a permanent account number under the new series and upon allotment of such permanent account number to a person, the permanent account number, if any, allotted to him earlier shall cease to have effect :  Provided that the persons to whom permanent account number

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PAN 139A.   (5) Every person shall  (a) quote such number in all his returns to, or correspondence with, any income-tax authority;  (b) quote such number in all challans for the payment of any sum due under this Act;  (c) quote such number in all documents pertaining to such transactions as may be prescribed by the Board in the interests of the revenue, and entered into by him: Rule 114 B  Provided that the Board may prescribe different dates for different transactions or class of transactions or for different class of persons:  Provided further that a person shall quote General Index Register Number till such time Permanent Account Number is allotted to such person;  (d) intimate the Assessing Officer any change in his address or in the name and nature of his business on

PAN

Rule 114 B

Rule-114B Categories of transactions and/or document where quoting of PAN made compulsory • sale/purchase of any immovable property value at Rs.5 lakhs or more; • sale/purchase of motor vehicle (other than two wheeled vehicles) which requires registration under Motor vehicles Act, 1988; • Time deposit exceeding Rs.50,000/- with a bank/banking company/banking institution; • Deposits exceeding Rs.50,000/- in Post Office Savings Bank. • Contract for sale/purchase of securities exceeding Rs.1,00,000/• Opening an account with a bank/banking company/banking institution. Where the person opening a bank account is a minor and does not have any income chargeable to income-tax, he shall quote the PAN/GIR number of his father or mother or guardian as the case may be. • Application for installation of a telephone connection including cellular connection. • Payment to hotels/restaurants of bills exceeding Rs.25,000/- at any time. • Payment in cash for purchase of bank draft or pay orders or banker's cheques from a banking company to which the Banking Regulation Act,

PAN

Rule 114 B

Rule-114B Categories of transactions and/or document where quoting of PAN made compulsory -----------contd. • deposit in cash aggregating to Rs.50,000/- or more, with a banking company to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in sec. 51 of that Act) during any one day; • payment in cash in connection with travel to any foreign country of an amount exceeding Rs.25,000/- at any one time. Such payment shall include payment in cash towards fare, or to a travel agent or a tour operator, or for the purchase of foreign currency. However, travel to any foreign country does not include travel to the neighbouring countries or to such places of pilgrimage as may be specified by the Board under Explanation 3 of section 139(1). • Making an application to any banking company to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act) or to any other company or institution, for issue of a credit card; • payment of an amount of Rs.50,000/- or more to a Mutual Fund for purchase of its units • payment of an amount of Rs.50,000/- or more to a company for acquiring shares issued by it;

Assessment Procedure

P.A.N. Sec 139A.    (5A) Every person receiving any sum or income or amount from which tax has been deducted under the provisions of Chapter XVIIB, shall intimate his permanent account number to the person responsible for deducting such tax under that Chapter :  Provided further that a person referred to in this sub-section shall intimate the General Index Register Number till such time permanent account number is allotted to such person.  (5B) Where any sum or income or amount has been paid after deducting tax under Chapter XVIIB, every person deducting tax under that Chapter shall quote the permanent account number of the person to whom such sum or income or amount has been paid by him  (i) in the statement furnished in accordance with the provisions of sub-section (2C) of section 192;  (ii) in all certificates furnished in accordance with the provisions of section 203;  (iii) in all returns prepared and delivered or caused to be delivered in accordance with the provisions of section 206 to

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Assessment Procedure

P.A.N. Sec 139A.  (5B) Where any sum or income ................... Provided that the Central Government may, by notification in the Official Gazette, specify different dates from which the provisions of this sub-section shall apply in respect of any class or classes of persons:  Provided further that nothing contained in sub-sections (5A) and (5B) shall apply in case of a person whose total income is not chargeable to income-tax or who is not required to obtain permanent account number under any provision of this Act if such person furnishes to the person responsible for deducting tax, a declaration referred to in section 197A in the form and manner prescribed thereunder to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.

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Assessment Procedure

P.A.N. Sec 139A. (5D) Every person collecting tax in accordance with the provisions of section 206C shall quote the permanent account number of every buyer or licensee or lessee referred to in that section  (i) in all certificates furnished in accordance with the provisions of sub-section (5) of section 206C;  (ii) in all returns prepared and delivered or caused to be delivered in accordance with the provisions of sub-section (5A) or sub-section (5B) of section 206C to an income-tax authority;]  (iii) in all quarterly statements prepared and delivered or caused to be delivered in accordance with the provisions of sub-section (3) of section 206C.  (6) Every person receiving any document relating to a transaction prescribed under clause (c) of sub-section (5) shall ensure that the Permanent Account Number or the General Index Register Number has been duly quoted in the document.

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Assessment Procedure

P.A.N. Sec 139A.  (7) No person who has already been allotted a permanent account number under the new series shall apply, obtain or possess another permanent account number.

 Explanation. For the removal of doubts, it is hereby declared that any person, who has been allotted a permanent account number under any clause other than clause (iv) of sub-section (1), shall not be required to obtain another permanent account number and the permanent account number already allotted to him shall be deemed to be the permanent account number in relation to fringe benefit tax.  (8) The Board may make rules providing for  (a) the form and the manner in which an application may be made for the allotment of a permanent account number and the particulars which such application shall contain;  (b) the categories of transactions in relation to which Permanent Account Numbers or the General Index Register Number shall be quoted by every person in the documents pertaining to such transactions;  (c) the categories of documents pertaining to business or

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Assessment Procedure

P.A.N. Sec 139A.  (8) The Board may make rules providing for  (d) class or classes of persons to whom the provisions of this section shall not apply; (e) the form and the manner in which the person who has not been allotted a Permanent Account Number or who does not have General Index Register Number shall make his declaration; (f) the manner in which the Permanent Account Number or the General Index Register Number shall be quoted in respect of the categories of transactions referred to in clause (c); (g) the time and the manner in which the transactions referred to in clause (c) shall be intimated to the prescribed authority. Explanation. For the purposes of this section, (g)Assessing Officer includes an income-tax authority who is assigned the duty of allotting permanent account numbers; (b) permanent account number means a number which the

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Assessment Procedure

P.A.N. Sec 139A.  Explanation. For the purposes of this section, (c)Assessing Officer includes an income-tax authority who is assigned the duty of allotting permanent account numbers; (b) permanent account number means a number which the Assessing Officer may allot to any person for the purpose of identification and includes a permanent account number allotted under the new series; (c) permanent account number under the new series means a permanent account number having ten alphanumeric characters and issued in the form of a laminated card; (d) General Index Register Number means a number given by an Assessing Officer to an assessee in the General Index Register maintained by him and containing the designation and particulars of the ward or circle or range of the Assessing Officer.

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Assessment Procedure

P.A.N. CONSEQUENCES OF FAILURE TO COMPLY WITH SEC 139 A Penalty Sec 272B. (1) If a person fails to comply with the provisions of section 139A, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of ten thousand rupees. (2) If a person who is required to quote his permanent account number in any document referred to in clause (c) of sub-section (5) of section 139A, or to intimate such number as required by sub-section (5A) or sub-section (5C) of that section, quotes or intimates a number which is false, and which he either knows or believes to be false or does not believe to be true, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of ten thousand rupees. (3) No order under sub-section (1) or sub-section (2) shall be passed unless the person, on whom the penalty is proposed to be imposed, is given an opportunity of being heard in the

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Assessment Procedure

TAX RETURN PREPARER SCHEME 139B.(1) For the purpose of enabling any specified class or classes of persons in preparing and furnishing returns of income, the Board may, without prejudice to the provisions of section 139, frame a Scheme, by notification in the Official Gazette, providing that such persons may furnish their returns of income through a Tax Return Preparer authorised to act as such under the Scheme. (2) Every Tax Return Preparer shall assist the persons furnishing the return of income in such manner as may be specified in the Scheme framed under this section and affix his signature on such return. (3) For the purposes of this section, (a) Tax Return Preparer means any individual, not being a person referred to in clause (ii) or clause (iii) or clause (iv) of sub-section (2) of section 288 or an employee of the specified class or classes of persons, who has been authorised to act as a Tax Return Preparer under the Scheme framed under this section; • specified class or classes of persons means any person,

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Assessment Procedure

TAX RETURN PREPARER SCHEME Sec 139B. (4) The Scheme framed by the Board under this section may provide for the following, namely: (a) the manner in which and the period for which the Tax Return Preparers shall be authorised under sub-section (3); (b)the educational and other qualifications to be possessed, and the training and other conditions required to be fulfilled, by a person to act as a Tax Return Preparer; (c) the code of conduct for the Tax Return Preparers; (d)the duties and obligations of the Tax Return Preparers; (e) the circumstances under which the authorisation given to a Tax Return Preparer may be withdrawn; (f) any other matter which is required to be, or may be, specified by the Scheme for the purposes of this section. (5) The Scheme framed by the Board under this section shall be laid, as soon as may be after it is framed, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the Scheme or both Houses agree that the Scheme should not be framed, the Scheme shall thereafter have effect only in such modified form or be of no effect, as

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Assessment Procedure

Sec 139 D Filing of return in electronic form. Sec 139D. The Board may make rules providing for (a) the class or classes of persons who shall be required to furnish the return in electronic form; (b) the form and the manner in which the return in electronic form may be furnished; (c)the documents, statements, receipts, certificates or audited reports which may not be furnished along with the return in electronic form but shall be produced before the Assessing Officer on demand; (d) the computer resource or the electronic record to which the return in electronic form may be transmitted.

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Assessment Procedure

SELF ASSESSMENT Sec 140A. (1) Where any tax is payable on the basis of any return required to be furnished under section 115WD or section 115WH or section 139 or section 142 or section 148 or section 153A or, as the case may be, section 158BC, after taking into account, (i) the amount of tax, if any, already paid under any provision of this Act; (ii)any tax deducted or collected at source; (iii) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India; (iv) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and (v) any tax credit claimed to be set off in accordance with the provisions of section 115JAA, the assessee shall be liable to pay such tax together with interest payable under any provision of this Act for any

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Assessment Procedure

SELF ASSESSMENT Explanation. Where the amount paid by the assessee under this sub-section falls short of the aggregate of the tax and interest as aforesaid, the amount so paid shall first be adjusted towards the interest payable as aforesaid and the balance, if any, shall be adjusted towards the tax payable. (1A) For the purposes of sub-section (1), interest payable, (i) under section 234A shall be computed on the amount of the tax on the total income as declared in the return as reduced by the amount of, (a) advance tax, if any, paid; (b) any tax deducted or collected at source; (c) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India; (d) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and (e) any tax credit claimed to be set off in accordance with the

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Assessment Procedure

SELF ASSESSMENT Sec 140A (1B) For the purposes of sub-section (1), interest payable under section 234B shall be computed on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid falls short of the assessed tax. Explanation. For the purposes of this sub-section, assessed tax means the tax on the total income as declared in the return as reduced by the amount of, (i) tax deducted or collected at source, in accordance with the provisions of Chapter XVII, on any income which is subject to such deduction or collection and which is taken into account in computing such total income; (ii) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India; (iii) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and (iv) any tax credit claimed to be set off in accordance with the provisions of section 115JAA.

(2) After a regular assessment under section 115WE or

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Assessment Procedure

SELF ASSESSMENT Sec 140A (3) If any assessee fails to pay the whole or any part of such tax or interest or both in accordance with the provisions of sub-section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax or interest or both remaining unpaid, and all the provisions of this Act shall apply accordingly. (4) The provisions of this section as they stood immediately before their amend-ment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references this section to the other provisions of this Even though theinstatute uses the word ‘shall’, since this is a taxing and Act shallprovision, be construed references to those provisions as for penal and so a as reasonable opportunity of being heard should be the timetobeing in force and applicable given assessee before application of 140A to (3) the and ifrelevant the AO is assessment satisfied year. with the explanation of he assessee, it may not be applied. In other words, AO has the discretion of applying or not applying the subsection. ………….Ramchandra Pesticieds P Ltd v. CIT (2006) 155 Taxman 111 (Kar)

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Assessment Procedure

Sec 142 Inquiry before assessment. Sec 142. (1) For the purpose of making an assessment under this Act, the Assessing Officer may serve on any person who has made a return under section 115WD or section 139 or in whose case the time allowed under sub-section (1) of section 139 for furnishing the return has expired a notice requiring him, on a date to be therein specified, (i)where such person has not made a return within the time allowed under sub-section (1) of section 139 or before the end of the relevant assessment year, to furnish a return of his income or the income of any other person in respect of which he is assessable under this Act, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed, or : Provided that where any notice has been served under this sub-section for the purposes of this clause after the end of the relevant assessment year commencing on or after the 1st day of April, 1990 to a person who has not made a return within the time allowed under sub-section (1) of section 139 or before the end of the relevant

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Assessment Procedure

Sec 142 Sec 142. (1) For the purpose of making an assessment under this Act, the Assessing Officer may serve on any person who has made a return under section 115WD or section 139 or in whose case the time allowed under sub-section (1) of section 139 for furnishing the return has expired a notice requiring him, on a date to be therein specified, (i) …………..

(ii) to produce, or cause to be produced, such accounts or documents as the Assessing Officer may require, or (iii) to furnish in writing and verified in the prescribed manner information in such form and on such points or matters (including a statement of all assets and liabilities of the assessee, whether included in the accounts or not) as the Assessing Officer may require : Provided that (a) the previous approval of the Joint Commissioner shall be obtained before requiring the assessee to furnish a statement of all assets and liabilities not included in the accounts ; (b) the Assessing Officer shall not require the production

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Assessment Procedure

Sec 142 Sec 142.(2) For the purpose of obtaining full information in respect of the income or loss of any person, the Assessing Officer may make such inquiry as he considers necessary. (2A) If, at any stage of the proceedings before him, the Assessing Officer, having regard to the nature and complexity of the accounts of the assessee and the interests of the revenue, is of the opinion that it is necessary so to do, he may, with the previous approval of the Chief Commissioner or Commissioner, direct the assessee to get the accounts audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, nominated by the Chief Commissioner or Commissioner in this behalf and to furnish a report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed and such other particulars as the Assessing Officer may require : Provided that the Assessing Officer shall not direct the assessee to get the accounts so audited unless the assessee has been given a reasonable opportunity of being heard.

(2B) The provisions of sub-section (2A) shall have effect notwithstanding that the accounts of the assessee have been audited under any other law for the time being in force or

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Assessment Procedure

Sec 142 Sec 142. (2C) Every report under sub-section (2A) shall be furnished by the assessee to the Assessing Officer within such period as may be specified by the Assessing Officer : Provided that the Assessing Officer may, suo motu, or on an application made in this behalf by the assessee and for any good and sufficient reason, extend the said period by such further period or periods as he thinks fit ; so, however, that the aggregate of the period originally fixed and the period or periods so extended shall not, in any case, exceed one hundred and eighty days from the date on which the direction under sub-section (2A) is received by the assessee. (2D) The expenses of, and incidental to, any audit under subsection (2A) (including the remuneration of the accountant) shall be determined by the Chief Commissioner or Commissioner (which determination shall be final) and paid by the assessee and in default of such payment, shall be recoverable from the assessee in the manner provided in Chapter XVII-D for the recovery of arrears of tax : Provided that where Rule 14any B direction for audit under sub-section (2A) is issued by the Assessing Officer on or after the 1st day of June, 2007, the expenses of, and incidental to, such audit (including the

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Assessment Procedure

Sec 142  Rule 14B Guidelines for the purposes of determining expenses for audit. Rule 14B. (1) Every Chief Commissioner shall maintain a panel of accountants, out of the persons referred to in the Explanation to subsection (2) of section 288, for the purposes of sub-section (2A) of section 142. (2) Where the Assessing Officer directs for audit under sub-section (2A) of section 142 on or after the 1st day of June, 2007, the expenses of, and incidental to, audit (including the remuneration of the Accountant, qualified Assistants, semi-qualified and other Assistants who may be engaged by such Accountant) shall not be less than rupees three thousand seven hundred and fifty and not more than rupees seven thousand and five hundred for every hour of the period as specified by the Assessing Officer under sub-section (2C) of section 142. (3) The period referred to in sub-rule (2) shall be specified in terms of the number of hours required for completing the report. (4) The Accountant referred to in sub-section (2A) of section 142 shall maintain a time-sheet and shall submit it to the Chief

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Assessment Procedure

Sec 142 Sec 142. (3) The assessee shall, except where the assessment is made under section 144, be given an opportunity of being heard in respect of any material gathered on the basis of any inquiry under sub-section (2) or any audit under sub-section (2A) and proposed to be utilised for the purposes of the assessment. (4) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.

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Assessment Procedure

Sec 142 GUIDELINES made by Board for selection of cases for Special Audit

Instruction No 1076 dated 12.7.1977 Regarding Companies: Only those cases where(iv)Reports of gross neglect / breach of duty of Principal Officer/ Director (v)Search & Seizure conducted under I T Act or FERA (vi)Co Having foreign collaboration (vii)Co’s principal is a foreign co. & deduction of expenses to Head Off claimed (viii)Co has import-export business & t/o of > Rs one crore (ix)Allegation sof substantial tax evasion (x)AO has any other information necessitating special audit Regarding non-Company assessees …….. The actual selection should be confined for a few carefully

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Assessment Procedure

Sec 142 SUMMARY OF JUDICIAL PRONOUNCEMENTS ON SPECIAL AUDIT

Pre-requisites for ordering a Special Audit u/s 142 (2A)  The AO should form an opinion that the nature of the accounts of the assessee is complex  The interest of the revenue will be adversely affected if the special audit is not directed  The opinion of the AO should be formed objectively on the basis of material before him and should be based on relevant considerations  The CIT / CCIT should grant approval for special audit after applying his mind to all he material considered by the AO and placed by the AO before him  The guidelines issued by the CBDT vide Instruction No 1076 dated 12.7.1976 are binding on the AO

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Assessment Procedure

Sec 142 (i )

(1 )

NOTI CE

TO FILE RETURN

If a person required to file a return had failed to file it before the end of relevant AY

To produce Accounts ONLY upto 3 years before ( ACCOUNTS / relevant PY ii) DOCUMENTS To furnish Statement of ASSETS & LIABILITIES only (iii INFORMAT with prior permission of JCIT ) ION

Se c (2 ENQUIRIES in respect of income or loss of any person 14 )( 2 2A) prior permission of CIT/CCIT  auditor nominated by CCIT ( ( Only after giving an opportunity to be heard to assessee GET 2B) ACCOUNTS Expense borne by Central Govt after 1.6.07 (  Rule 14B  Rs 3750 to 7500 /hour AUDITED Period given/extended by AO  upto 180 days 2C) ( OPPORTUNITY OF BEING 2D) (3

)

HEARD

) (4 Applicable to prior to 1987 )

102

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Assessment Procedure

Sec 142

WHAT HAPPENS IF Best Judgment Assessment u/s 144 Penalty u/s 271(1)(b)  Rs 10,000 for EACH failure Best Judgment Prosecution u/sAssessment 276CC u/s 144 Penalty u/s 271(1)(b)  Rs 10,000 for EACH failure Prosecution u/s 276D

By AO

Order for special audit 103 becomes void

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Assessment Procedure

Sec 142  Can inquiry u/s 142 done after assessment?  No . It pre-assessment enquiry.............. Amal Kr Ghatak v. ITO (1971) 79 ITR 452 (Cal)  Can a reference to t eh valuation cell u/s 55A be made u/s 142) ?  No …………………………………………..Smt Amiya Bala Paul v. CIT (2003) 262 ITR 407 (SC)  Where AO gathers material from records pertaining to an earlier year, is he bound to give an opportunity to be heard ?  Yes, as such material is covered u/s 142 (3)………….Ponkummam Traders v. Additional ITO (1972) 83 ITR 508 (Ker)  If the notice u/s 142 (1) is accompanied by a letter asking for information, whether non compliance of that letter amount to noncompliance u/s 142 (1) ?  No …………………………………. Calcutta Chromotype P Ltd. V. ITO , (1971) 79 ITR 442 (All)  If the notice u/s 142 (1) called for information part of which was prior to three years from the relevant PY then will the whole notice become illegal ? No. only the part pertaining to information prior to 3 years will be 104 illegal – if it is severable from the other parts ………Murlidhar Madanlal v. CIT (1954) 26 ITR 231 (Pat)

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Assessment Procedure

Sec 142  Who is to decide which books are required to be produced u/s 142 (1)?  AO is the sole judge.............. Tejmal Bhojraj V. CIT (1952) 22 ITR 208 (Nag)  Can AO ask for special audit u/s 142 (2A) without looking at the accounts?  No. An honest attempt must be made first to understand the accounts of the assessee ………………………..Swadeshi Cotton Mills Co Ltd V. CIT (1988) 17 ITR 634 (All)  Can special audit be asked for in a case where the accounts are already audited?  Yes………….Jagjit Sugar Mills Co Ltd. V. CIT (1994) 210 ITR 468 (Punj&Har)  Can the Commissioner issue an order for the special audit u/s 142(2A)?  No . An order by CIT does not amount to approval as envisaged in the statute………………………. Peerless Gen Fin & Inv Co Ltd V. CIT (1999) 102 Taxman 654 (Cal)  If the AO makes a proposal to the CIT for appointing an auditor u/s 142 (2A) without sharing any other information related with the case, and if CIT nominates an auditor for the audit, does it amount to compliance 105 of sec 142 ? Is the action valid ? No. Approval by the CIT must be specific and given after considering

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Assessment Procedure

Sec 142  Would an AO be justified in ordering special audit on the ground that there were many litigations going between the assessee and the RBI ?  No . That is an irrelevant consideration.............. Peerless Gen Fin & Inv Co Ltd V. CIT (1999) 236 ITR 671(Cal)  Can a special audit be ordered on the ground that the stocks could not be reconciled by the auditors ?  No. ………………………..UP State Handloom CorpL td V. CIT (2000) 245 ITR 192 (All)  Can special audit be asked by AO if the assessee did not respond to his queries regarding accounts ?  No That is not a reasonable ground envisaged in sec 142 (2A)……… ….Mothoottu Mini Kuries V. Dy CIT (2001) 250 ITR 455 (Ker)  The order u/s 142 (2A) did not disclose any reason for special audit, nor did records reveal any application of mind by AO. Subsequently th eorder u/s 142 (2A) was challenged as being bad in law and it was submitted by AO that special audit was ordered because of past history of assessee, the fact that he offered income under VDIS scheme and had not filed audited accounts as was required u/s 44AB. Was th eorder of AO ?  No . Since the reasons / application of mind were not apparent in106 the order u/s 142 (2A) it is invalid………………………. HP States Forest Corp

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Assessment Procedure

Sec 142  Is AO required to provide an opportunity to be heard to the assessee before ordering a special audit u/s 142 (2A) ?  YES ……………….Proviso u/s 142 (2A) ……………………….inserted by Fin Act 2007, wef 1.6.2007 after the judgment in case of UP Fin Corp V. JCIT (2005) 147 Taxman 21 (All) which held that such an opportunity was not required as per the statute.  Can the AO issue a notice u/s 142 (1) calling for a return of income, after the due date provided in Sec 139 and before the end of the relevant assessment year?  Yes………………………..Departmental circular No. 572 dated 3rd August 1990  ………. What is the intention behind introduction of words or before the end of the relevant assessment year by Finance Act 2006 ?  Clarificatory amendment regarding the time limit for issue of notice under section 142 The existing provisions contained in sub-section (1) of said section, interalia, provide that for the purposes of making assessment in a case where a person has not made a return of his income within the time specified under sub-section (1) of section 139, the Assessing Officer may serve a notice under the said sub-section on such person requiring 107 him to furnish the return of his income in the prescribed form and manner.

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Assessment Procedure

Sec 142  Would an AO be justified in ordering special audit on the ground that accounts or documents are voluminous ?  No . That is not enough to make the accounts complex or justify special audit.............. Bajrang Textiles V. CIT (2004) 3 SOT 115 (Jodh)  Can the AO make a reference to an auditor to prepare books of accounts on the basis of records seized during a search ?  No. ……………………….. Bajrang Textiles V. CIT (2004) 3 SOT 115 (Jodh)  Is the audit report u/s 142 (2A) binding on the AO? Can the AO reject the same without assigning any reason ?  No. It is NOT binding. However, the AO cannot reject the special audit report without assigning any reasons………….CIT Vs. Sahara India Fin Corp Ltd (2004) 135 Taxman 154 (Nag)  In case an assessee fails to file a return of income, is it mandatory for the AO to issue a notice u/s 142 (1) ?  No  Can a best judgment u/s 144 be completed in a case of non-filing of return, without issuing a notice u/s 142 (1) for filing of a return u/s 142 (1) (i) ? 108  Yes. It is not mandatory to issue a notice u/s 142(1) (i) in all cases of non-filers or a necessary part of assessment u/s 144, but then an

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Assessment Procedure

Sec 142 A Estimate by Valuation Officer in certain cases Sec 142A.(1) For the purposes of making an assessment or reassessment under this Act, where an estimate of the value of any investment referred to in section 69 or section 69B or the value of any bullion, jewellery or other valuable article referred to in section 69A or section 69B is required to be made, the Assessing Officer may require the Valuation Officer to make an estimate of such value and report the same to him. (2) The Valuation Officer to whom a reference is made under sub-section (1) shall, for the purposes of dealing with such reference, have all the powers that he has under section 38A of the Wealth-tax Act, 1957 (27 of 1957). (3) On receipt of the report from the Valuation Officer, the Assessing Officer may, after giving the assessee an opportunity of being heard, take into account such report in making such assessment or reassessment: Provided that nothing contained in this section shall apply in respect of an assessment made on or before the 30th day

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Assessment Procedure

Sec 142A Estimate by Valuation Officer in certain cases Sec 142A …………………… Explanation. In this section, Valuation Officer has the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957).] Definition of Valuation Officer in Wealth Tax Act Sec 2(r) Valuation Officer means a person appointed as a Valuation Officer under section 12A, and includes a Regional Valuation Officer, a District Valuation Officer, and an Assistant Valuation Officer . W T Act  Appointment of Valuation Officers.

Sec 12A. (1) The Central Government may appoint as many Valuation Officers as it thinks fit. (2) Subject to the rules and orders of the Central Government regulating the conditions of service of persons in public services and posts, a wealthtax authority may appoint as many overseers, surveyors and assessors as may be necessary to assist the Valuation Officers in the performance of their functions.

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Assessment Procedure

Sec 142A Wealth Tax Act  Powers of Valuation Officer, etc. Sec 38A.(1) For the purposes of this Act, a Valuation Officer or any overseer, surveyor or assessor authorised by him in this behalf may, subject to any rules made in this behalf and at such reasonable times as may be prescribed, (a) enter any land within the limits of the area assigned to the Valuation Officer, or (b) enter any land, building or other place belonging to or occupied by any person in connection with whose assessment a reference has been made under section 16A to the Valuation Officer, or (c) inspect any asset in respect of which a reference under section 16A has been made to the Valuation Officer, and require any person in charge of, or in occupation or possession of, such land, building or other place or asset to afford him the necessary facility to survey or inspect such land, building or other place or asset or estimate its value or inspect any books of account, document or record which may be relevant for the valuation of such land, building or other place or asset and gather other particulars relating to such land, building or other place or asset:

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Assessment Procedure

Sec 142A Wealth Tax Act  Powers of Valuation Officer, etc. Sec 38A.(1)……. Provided that no Valuation Officer, overseer, surveyor or assessor shall enter any building or place referred to in clause (b), or inspect any asset referred to in clause (c) (unless with the consent of the person in charge of, or in occupation or possession of, such building, place or asset) without previously giving to such person at least two days notice in writing of his intention to do so. (2) If a person who, under sub-section (1), is required to afford any facility to the Valuation Officer or the overseer, surveyor or assessor, either refuses or evades to afford such facility, the Valuation Officer shall have all the powers under sub-sections (1) and (2) of section 37 for enforcing compliance of the requirements made.

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Assessment Procedure

Sec 142A Wealth Tax Act  Powers of Valuation Officer, etc. Sec 37 (1) The Assessing Officer, Valuation Officer, Deputy Commissioner (Appeals), Commissioner (Appeals), Chief Commissioner or Commissioner and the Appellate Tribunal shall, for the purposes of this Act, have the same powers as are vested in a court under the Code of Civil Procedure,1908 (5 of 1908), when trying a suit in respect of the following matters, namely: (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath; (c) compelling the production of books of account and other documents; and (d) issuing commissions.

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Assessment Procedure

Sec 143 Sec 143. (1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely: (a) the total income or loss shall be computed after making the following adjustments, namely: (i) any arithmetical error in the return; or (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; (b) the tax and interest, if any, shall be computed on the basis of the total income computed under clause (a); (c) the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax and interest, if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable under an agreement under section 90 or section 90A, or any relief allowable under section 91, any rebate allowable under Part A of Chapter VIII, any tax

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Assessment Procedure

Sec 143 Sec 143. (1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely: (d) an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the assessee under clause (c); and (e) the amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee: Provided that an intimation shall also be sent to the assessee in a case where the loss declared in the return by the assessee is adjusted but no tax or interest is payable by, or no refund is due to, him: Provided further that no intimation under this sub-section shall

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Assessment Procedure

Sec 143 Sec 143. (1)

Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:

Explanation. For the purposes of this sub-section, (a) an incorrect claim apparent from any information in the return shall mean a claim, on the basis of an entry, in the return, (i) of an item, which is inconsistent with another entry of the same or some other item in such return; (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction; (b) the acknowledgement of the return shall be deemed to be the intimation in a case where no sum is payable by, or

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Assessment Procedure

Sec 143 Sec 143. (1A) For the purposes of processing of returns under sub-section (1), the Board may make a scheme for centralised processing of returns with a view to expeditiously determining the tax payable by, or the refund due to, the assessee as required under the said sub-section. (1B) Save as otherwise expressly provided, for the purpose of giving effect to the scheme made under sub-section (1A), the Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in that notification; so, however, that no direction shall be issued after the 31st day of March, 2009. (1C) Every notification issued under sub-section (1B), along with the scheme made under sub-section (1A), shall, as soon as may be after the notification is issued, be laid before each House of Parliament.

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Assessment Procedure

Sec 143 Sec 143. (2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall, (i) where he has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified therein to produce, or cause to be produced, any evidence or particulars specified therein or on which the assessee may rely, in support of such claim: Provided that no notice under this clause shall be served on the assessee on or after the 1st day of June, 2003; (ii) notwithstanding anything contained in clause (i), if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced, any evidence on which the assessee may rely

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Assessment Procedure

Sec 143 Sec 143. (3) On the day specified in the notice, (i) issued under clause (i) of sub-section (2), or as soon afterwards as may be, after hearing such evidence and after taking into account such particulars as the assessee may produce, the Assessing Officer shall, by an order in writing, allow or reject the claim or claims specified in such notice and make an assessment determining the total income or loss accordingly, and determine the sum payable by the assessee on the basis of such assessment; (ii) issued under clause (ii) of sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment:

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Assessment Procedure

Sec 143 Sec 143. (3) .......... Provided that in the case of a (a) scientific research association referred to in clause (21) of section 10; (b) news agency referred to in clause (22B) of section 10; (c) association or institution referred to in clause (23A) of section 10; (d) institution referred to in clause (23B) of section 10; (e) fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via) of clause (23C) of section 10, which is required to furnish the return of income under sub-section (4C) of section 139, no order making an assessment of the total income or loss of such scientific research association, news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical institution, shall be made by the Assessing Officer, without giving effect to the provisions of section 10, unless (i) the Assessing Officer has intimated the Central Government or the prescribed authority the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, as the case may be, by

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Assessment Procedure

Sec 143 Sec 143. (3) .......... Provided…………….

(ii) the approval granted to such scientific research association or other association or fund or trust or institution or university or other educational institution or hospital or other medical institution has been withdrawn or notification issued in respect of such news agency or fund or trust or institution has been rescinded : Provided further that where the Assessing Officer is satisfied that the activities of the university, college or other institution referred to in clause (ii) and clause (iii) of sub-section (1) of section 35 are not being carried out in accordance with all or any of the conditions subject to which such university, college or other institution was approved, he may, after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned university, college or other institution, recommend to the Central Government to withdraw the approval and that Government may by order, withdraw the approval and forward a copy of the order to the concerned university, college or other institution and the Assessing Officer.

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Assessment Procedure

Sec 143 Sec 143. (4) Where a regular assessment under sub-section (3) of this section or section 144 is made, (a) any tax or interest paid by the assessee under sub-section (1) shall be deemed to have been paid towards such regular assessment ; (b) if no refund is due on regular assessment or the amount refunded under sub-section (1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly.

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Assessment Procedure

Sec 143 ADJUSTME ARITHMETIC ERRORS INCORRECT CLAIM APPARENT FROM NTS INFORMATION IN RETURN TAX & TOTAL INCOME (b) INTEREST Sum payable by / Refund due (c) to Assessee INTIMATI (d) ON Sent to the assessee (e) REFUND (a)

(1 )

Se c 14 3

PROVIS O 1 PROVIS O 2 (a )

(b )

INTIMATION SENT IN CASE OF ADJUSTMENT OF LOSS NO INTIMATION AFTER THE END OF ONE YEAR FROM END OF F.Y. IN WHICH RETURN WAS FILED (i) INCONSISTENT ENTRIES IN R/I (ii) INFORMATION REQUIRED NOT FURNISHED (iii) DEDUCTION EXCEEDS STATUTORY LIMIT If no adjustment  ACKNOWLEDGEMENT  DEEMED INTIMATION 123

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Assessment Procedure

Sec 143 (1 )

Se c 14 3

CENTRALIS ED PROCESSIN G OF RETURNS

( 1A) Board  Power for making a SCHEME for Centralised processing ( Central Govt  Notification IF any provisions of Act will Not apply 1B) ( Notification to be laid before the parliament 1C)

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Assessment Procedure

Sec 143 (1 )

Se c 14 3 (2

NOTIC E

IF AO CONSIDERS IT NECESSARY / EXPEDIENT TO ENSURE THAT ASSESSEE HAS NOT UNDERSTATED HIS INCOME/ COMPUTED EXCESSIVE LOSSES/ /PRODUCE UNDERPAID/ CAUSE TAXES TO ATTEND HIS OFFICE

TO BE PRODUCED ANY EVIDENCE ON WHICH HE MAY WISH TO OF TOTAL INCOME & DETERMINATION OF SUM RELY IN SUPPORT (3 ASSESSME PAYABLE or REFUND DUE TO ASSESSEE  by NT ORDER IN WRITING ) After HEARING EVIDENCE THAT ASSESSEE MAY

)

(4 )

PRODUCE / AO MAY REQUIRE & TAKING INTO ACCCOUNT RELEVANT TAXES DEDUCTED PAID ALL TO BE TAKEN MATERIAL INTO ACCOUNT

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Assessment Procedure

Sec 143  What should the AO do if due to some reason he is not able to adhere to the schedule of hearing for which a notice is already issued ?  The assessee should be informed in advance either through a letter or through telephone, wherever possible ........ Instruction No. 1395 (F. No 201/28/81-ITA-II) dt 15.5.81 (114th Report (8283) of the PAC, p-16-17)

 Can an AO fix the hearing in case of many assessees at the same time?  No. AO should give each assessee a different time ………………… ……………………… Circular No 230 dt 27.10.77 ( F No 225/109/77-ITA-II)  If during the hearing the AO comes to observe a relief or claim or deduction that the assessee was entitled to but has not claimed, can the AO advice the assessee to claim it?  Yes. Officers of the Deptt must not take advantage of the ignorance of the assessee. Although the responsibility of claiming refunds or reliefs rest with the assessee, the officers of the Department should (i) draw their attention to any refund or relief to which they appear to be clearly entitled & (ii) freely advise, when approached by them, about their rights and liabilities, and as to the procedure to be adopted for claiming such refunds and reliefs. 126 ………….Circular No 14 (XL-35) dt 11.4.55

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Assessment Procedure

Sec 143  What is expected from the AO in an assessment?  Except that he should give precedence to the cases which are likely to yield more revenue, the AO should not be obsessed with budget figures. He has certain judgments to complete in an year and his merit will be judged by the way in which he completes those cases and not by the extent to which he has collected his budget estimate. ........ Instruction No. 3 of 1942 dt 16.1.42 The assessment has to be made in a reasonable & fair manner after taking into account all relevant circumstances of the case. Even when the assessment has to be made ex-parte, the information available should be reasonably weighed and a proper estimate made in the exercise of best judgment in the circumstances. ……….Instruction No 574 dt 27.7.73 (193rd Report (83-84) of the PAC, p-2627)

 Can the AO call for an affidavit?  Unless there is some material basis for suspicion, affidavits sworn or affirmed before a magistrate should not be called for. ........ Instruction No. 3 of 1942 dt 16.1.42  Is a notice of demand of tax payable on the basis of assessment valid if not accompanied with a copy of the assessment order? 127  No. As per the Board’s circular No 10D, C No 9(22)-IT/47 dt

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Assessment Procedure

Sec 143  Can the assessee ask for an adjournment at the last minute ? Can the request of assessee for grant of an adjournment be refused by the AO?  Where the assessee has already taken one adjournment but desires another adjournment, the assessee should make the request for adjournment well in advance so as to enable him, in case of a refusal, to be prepared to proceed on the appointed day. ........ CIT V. Laxmi Narayan Badridas (1937) 5 ITR 170 (PC)  Will every minor error vitiate the assessment proceeding? No. An assessment proceeding does not cease to be a proceeding under the Act merely by reason of a want of notice. It will be a proceeding liable to be challenged and corrected. ……………….Estate of Late Ranglal Jajodia V. CIT (1971) 79 ITR 505 (SC)  Will an error in the name of the assessee vitiate the assessment proceeding?  No ……………….Estate of Late Ranglal Jajodia V. CIT (1971) 79 ITR 505 (SC)  What is the relevance of admission of addition by the assessee?  Assessment is to be made not solely on the basis of admission of 128of a person. A proper order of assessment should be made on the basis all facts a& circumstances and on a correct application of the relevant

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Assessment Procedure

Sec 143  Should the AO always “err on the side of the revenue”?  The AO exercises quais-judicial powers and in doing do they must act in a fair manner and not in a partisan manner. Although it is their duty to ensure that no tax which is legitimately due remains uncovered, they must also not act in a manner that might indicate that the scales are weighed against the assessee. ........ CIT V. Simon Carves Ltd (1976) 105 ITR 212 (SC)  Can the AO reject the information provided in return or the evidence given in assessment? Yes. It is an inherent power of AO. ……………….Bombay Hardware Syndicate V. CIT (1973) 92 ITR 160 (Mad)  While exercising a power vested in him, if the AO refers to a wrong section, then will the action taken be void ?  No. Where the power to proceed is actually there, the mere reference to a wrong section will not vitiate the action taken …………. Isha Beevi V. TRO (1975) 101 ITR 449 (SC)  For a return of income for AY 2005-06, filed on 31.3.07 – if the law was amended w.e.f. 1.4.06, will the amended provisions apply ? 129  No. The law as it rules during the AY will apply…….Reliance Jute & Industries Ltd V. CIT (1979) 20 ITR 921 (SC)

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Assessment Procedure

Sec 143  Is an assessment u/s 143(3) valid if the return filed was not signed ?  No. Assessment based on an invalid return is invalid & liable to be cancelled. ........ CIT V. Krishan Lal Goyal (1984) 148 ITR 283 (Punj & Har)  The AO made an addition during the assessment wherein he relied on a provision of the IT Act which was subsequently held as ultra-vires to the constitution. Will the assessment order is also null & void ? No. If the machinery provision used for assessment is valid …………… ….Raleigh Investment Co. V. Governor General in Council (1947) 15 ITR 332 (PC)  The assessee is having a dispute with a third party on certain income. Should the AO necessarily wait till the litigation is decided before passing the assessment order ?  No. Income-tax assessment has to made every year and cannot be held up until the final result of a legal proceeding which may pass through several courts………….CIT V. H Hirjee (1953) 23 ITR 427 (SC)  What if the AO does not sign the assessment order?  Invalid order …….Kalyan kumar Roy V. CIT (1996) 219 ITR 214 (SC) 130  What if the AO does not state the computation of tax in the assessment order, but such computation was given in the demand notice sent

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Assessment Procedure

Sec 143  Does the Evidence Act apply in case of assessment ?  Though the provisions of the Evidence Act do not apply to assessment proceeding, when the authorities are called upon to consider the effects of a document, the general provisions embodied in Sec 91, 92 & 94 of Evidence Act will apply. ........ AVN Jagga Row V. CIT (1987) 166 ITR 862 (AP) Evidence Act, 1872 Sec 91. Evidence of terms of contracts, grant and other dispositions of property reduced to form of document - When the terms of a contract, or of a grant, or of any other disposition of property have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions herein before contained.

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Assessment Procedure

Sec 143 Evidence Act, 1872 92. Exclusion of evidence or oral agreement - When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying adding to, or subtracting from, its term: Proviso (1) - Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto, such as fraud, intimidation, illegality, want for due execution, want of capacity in any contracting party, want or failure of consideration, or a mistake in fact or law. Proviso (2) - The existence of any separate oral agreements to matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this proviso applies, the Court shall have regard to the degree of formality of the document. Proviso (3) - The existence of any separate oral agreement, constituting, a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved. 132

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Assessment Procedure

Sec 143 Evidence Act, 1872 92. Exclusion of evidence or oral agreement Proviso (4) - The existence of any separate oral agreement, constituting, a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved, except in cases in which such contract, grant or disposition of property, is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents. Proviso (5) - Any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of that description may be proved. Provided that the annexing of such incident would not be repugnant to, or inconsistent with, the express terms of the contract. Proviso (6) - Any fact may be proved which shows in what manner the language of a document is related to existing facts. Sec 94. Exclusion of evidence against application of document of existing facts - When language used in a document is plain in itself, and when it applies accurately to existing facts, evidence may not be given to show that it was not 133 meant to apply to such facts.

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Assessment Procedure

Sec 143  Can the AO take circumstantial evidence into account ?  In case of the circumstantial evidence, the totality of circumstances has got to be taken into account, and the combined effect of all the circumstances is determinative of the question as to whether or not a particular fact is proved. ........ CIT V. Rameshwar Prasad Bagla (1968) 68 ITR 653 (All)  Can the AO reject affidavits filed by the Assessee ? It cannot be rejected straightaway on the ground that no material evidence is filed to prove. Rejection of an affidavit is not justified unless the assessee is either cross-examined or called upon to produce documentary evidence in support of the affidavit sworn by him ……… ……….L Sohan Lal Gupta V. CIT (1958) 33 ITR 786 (All)  Can the AO reject the documents filed by the assessee as evidence – on what ground ?  Yes. The AO can look into the genuineness & validity of documents filed by assessee and reject them if not found to be not genuine or valid ………….ITO V. K Jayaraman (1987) 168 ITR 757 (Mad)  The taxing authorities are not required to put up blinkers while looking at the documents produced before them. They are entitled 134 to look into the surrounding circumstances to find out th ereality of the

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Assessment Procedure

Sec 143  Assessee objected to the use of some material by the AO on the ground that it was an evidence not admissible in the court of law and the AO has powers of a civil court  Is the objection valid?  Proceedings under the IT Act are not judicial proceedings. AO is NOT fettered with or bound by technical rules about evidence contained in the Indian Evidence Act, and he is entitled to act onmaterial which may not be acceptable as evidence in a court of law. ........ Dhankesari Cotton Mills V. CIT (1954) 26 ITR 775 (SC)  This does not mean that when the taxing authorities are desirous of invoking the provisions of Evidence Act, they are prevented from doing so ........ Chuharmal V. CIT 172 ITR 250,255 (SC)  The assessment of income is made on the basis of inference on evidence which in criminal or civil justice may be insufficient ........ Debi Burman V. CIT Tax LR 452, 456-57 (Cal)  Assessee filed an affidavit from a third party confirming that a particular transaction challenged my AO did take place. Can the AO reject the affidavit ?  A declaration in an affidavit cannot be rejected in the absence of any evidence to show that the declaration was bogus and unreliable ……… ……….Lakshmi Narayan Gadodia & Co (1943) 91 ITR 18 (SC) 135  Onus on AO to show that it is unreliable  Material to support

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Assessment Procedure

Sec 143  On whom lies the burden of proof in the assessment proceedings ?  For establishing that statement or information filed in return is not correct ?  On AO. He can establish this by showing that (e.g…)  information given by assessee in return is not consistent with other information, documents, accounts, explanations, evidence provided by him  Information given by assessee is false as established from other material on record which assessee was confronted with, but could not explain satisfactorily  Failure of the assessee to provide any documentary support of claims made by him & failure to offer any acceptable explanation for such a failure  Information or explanation provided by assessee proves that his returned income is not computed as per law  Circumstantial evidence on record, after taking explanation or objections of assessee into consideration establishes that his returned income is not correct  The income returned is not in conformity with the books of accounts, and no acceptable explanation is offered by the assessee  The books of accounts are rejected after taking into consideration 136 whatever the assesee has to offer as explanation or evidence

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Assessment Procedure

Sec 143  On whom lies the burden of proof in the assessment proceedings ?  For establishing that statement or information filed in return is correct ?  On assessee. He can establish this by (e.g…)  Providing details, documents, information required by AO  Confirmation of certain transactions from third parties  Explanations about missing information / documents  Showing link between income returned and books of acounts  For establishing that an explanation submitted by the assessee is not acceptable?  On AO. He can establish this by (e.g…)  SPEAKING ORDER  detailing the reasons , i.e.. Material and logic because of which the explanation submitted by the assessee is not acceptable  For establishing that a document submitted by the assessee is not reliable?  On AO. He can establish this by (e.g…)  SPEAKING ORDER  detailing the reasons , i.e.. Material and logic 137 because of which the document submitted by the assessee is not reliable

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Assessment Procedure

Sec 143  Can the AO take into account the statement of a third party?  Yes. But only after giving the assessee an opportunity of cross examining the third party . The cross-examination of the third party by the assessee should be recorded and kept on record, and due consideration must be given to any inconsistencies arising out of such cross-examination. ……………….State of Kerala V. KT Shaduli Yusuf (1977) 39 ST 478 (SC)  If the AO does not mention the reasons for making an addition, is the order valid ? It is INVALID liable to be quashed……………….Mahindra & Mahindra V. UOI (AIR) (1979) SC 798, 823; CIT V. Sunderlal (1974) 96 ITR 310  Can the AO rely on evidence that has never been brought to the notice of the assessee?  No. It will violate the principles of natural justice. …………. MO Thomakutty V. CIT (1958) 34 IR 501 (Ker)  Opportunity to assessee to rebut material is essential…………. Ponkunnam Traders V. Addl ITO (1972) 83 ITR 508 (Ker)  Can the AO make an addition on the ground that the assessee has been evading taxes in earlier years?

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Assessment Procedure

Sec 143 Time limit for completion of assessments and reassessments.

Sec 153. (1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of (a) two years from the end of the assessment year in which the income was first assessable ; or (b) one year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, is filed under subsection (4) or sub-section (5) of section 139, whichever is later : Provided that in case the assessment year in which the income was first assessable is the assessment year commencing on the 1st day of April, 2004 or any subsequent assessment year, the provisions of clause (a) shall have effect as if for the words two years, the words twenty-one months had been substituted : Provided further that in case the assessment year in which the income was first assessable is the assessment year commencing on the 1st day of April, 2005 or any subsequent assessment year and during the course of the proceeding for the assessment of total income, a reference under sub-section (1) of section 92CA (i) was made before the 1st REFERENCE TO TRANSFER PRICING OFFICER day of June, 2007 but an order under sub-section (3) of that

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Assessment Procedure

Sec 143 FILING OF RETURN 139 (1) 31.7. 09

AY 2 00 9-10

1.4. 09

AY 2009-10 1.4. 10 31.3. 10

139 (4) / (5)

31.3. FY 2 010 -1111 30.9. 10

1.4. 11

Notice u/s 143 (2) Notice u/s 142 (1) (ii)/ (iii) ORDER u/s 143 (3) / 144

31.12 FY 20 10.11 -11 30.9. 11

T I M E

31.3. 12

L I M I T 140

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