Module 20 - Assessment

What is self-assessment
Section 140A
• An assessee is required to submit his return of
income or fringe benefits u/s 115WD or 115WH or
139 or 142 or 148 or 153A or 158BC.
• Before submitting return he is supposed to find out

income tax and/or interest and shall deposit before
submitting return of income.
• From 1 April 2008 all corporate assessees & other

s t
assesses (who are subject to compulsory audit u/s

44AB) will have to make electronic payment of tax
through internet banking facility, or through internet
using debit/credit cards.
Section 140A continued ………………….
• Proof of deposit should be submitted in return of
income ( i.e. BSR code/bank, serial No. of challan, the
amount of deposit & dates of deposit).
• Where the amount paid by the assessee is falls short

of the aggregate of tax and interest, the amount so
paid shall f irst be adjusted towards interest payable &
balance, if any, shall be adjusted towards tax payable
• If any assessee fails to pay whole or any part of such

ta x or in teres t or both in a ccorda n ce w ith th e
provisions of sec 140A, he shall be deemed to be an
assessee in default in respect of the tax or interest or
both remaining unpaid, and all the provisions of the
Act shall apply accordingly.
Giving notice to the assessee
Section 142(1)
Assessing of ficer may serve notice to any
person for following purpose:
• Return of Income – if assessee has not

f iled return within time limit u/s 139(1) or
before the end of relevant assessment
year, the assessing of ficer may require to
s u b m i t th e r e tu r n o f i n c o m e i n th e
pres cribed form on or before a date
specified in the notice. Such notice can be
served during the A.Y. or even after the
end of A.Y.
Section 142(1) continued …………….
• Documents & Accounts – The assessing of ficer

may ask the assessee to produce such documents
/ accounts as he may require. however documents
3 years prior to the P. Y. should not be asked.
• Furnishing Information – The assessing of fic er

may require the assessee to furnish in writing (and
verif ied in the prescribed manner) information in
s u c h for m a n d on s u c h p oi n t s or m a t t er s
(including statement of all assets and liabilities of
the assessee, whether included in accounts or not)
as he may require. However is such statement is to
be cal l ed for the pri or approval of Joi nt
Commissioner of Income Tax shall be obtained.
Making inquiry
Section 142 (2) (3)
• 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.
• The assessee shall be given chance of being

heard (except where assessment is made u/s
144) in respect of any material gathered on the
basis of any inquiry or audit u/s 142(2A) &
proposed to be utilized for the purpose of the
assessment.
Summary assessment without calling the assessee
Section 143(1)
• u/s 143(1) the assessing officer can complete

the assessment without passing a regular
assessment order.
• The assessment is completed on the basis of

return submitted by the assessee.
• With effect from April 1, 2008 Two stage

procedure for assessment is adopted - in first
stage all the tax returns are processed to correct
arithmetical mistakes, internal inconsistencies,
tax calculations & verification of tax payment.
Sec. 143(1) continued ……………..
- in the second stage certain percentage of tax returns
a re selected for scrutiny/a udit on the ba sis of
probability of detecting tax evasion (processing is
done by computer software).
• If any incorrect claim is apparent from any information
in the return an intimation is sent to the assessee
specifying the sum determined to be payable by or the
amount of refund due to, the assessee.
• Incase no adjustment is required the

acknowledgement of the return shall be deemed to be
the intimation.
• An intimation of tax or interest due u/s 143(1) should

not be sent after the expiry of one year from the end of
financial year in which the return is made.
Scrutiny under section 143(3)
The scheme of scrutiny is applicable as follows

• The return of income(loss) should have been made
u/s 139 or in response to notice u/s 142(1).
• The assessing of fic er considers it necessary 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.
• The notice shall be served on the assessee u/s

142(2) – the notice requires the assessee to
produce any evidence which the assessee may rely
in support of the return.
Section 143(3) continued…………
• Notice shall be served within 6 months from the end of
the financial year in which return is furnished.
• After hearing such evidence as the assessee may

produce in response to the notice u/s 143(2) and such
other evidence as the assessing of fic er may require
and after taking into account all the relevant material
which the assessing officer has gathered, he shall pass
an assessment order in writing determining
(a) the total income or loss of the assessee
(b) the sum payable by (or refundable to) the assessee
on the basis of such assessment order.
• The assessment u/s 143 should be completed within

21 months from the end of relevant assessment year.
Best Judgement Assessment
Section 144
The assessing of ficer can make an assessment
of the total income or loss to the best of his
judgment in the following cases:
1. If any person fails to make a return required u/s

139(1) and has not made a return or a revised
return under section 139(4) or 139 (5).
2. If any person fails to comply with all the terms

of a notice u/s 142(1) or fails to comply with
the direction requiring him to get his accounts
audited in terms of sec.142 (2A).
Section 144 continued ………………
3. If any person, after having filed a return, fails
to comply with the terms of a notice u/s
143(2), requiring his presence or production
of evidence and documents.
4. If the assessing officer is not satisfied about

the correctness or the completeness of the
accounts of the assessee or if no method of
accounting has been regularly employed by
the assessee.
Section 144 continued …………………..
Other points to be remembered –
• In the case of best judgment assessment, an assessee
has a right to f il e an appeal u/s 246A or to make an
application for revision u/s 234 to the commissioner.
• Best judgment assessment can only be made after

giving the assessee an opportunity of being heard. Such
opportunity shall be given by issue of notice to the
assessee to show cause why the assessment should not
b e c o m p le t e d t o t he b e st o f jud g m e nt and t hat
opportunity for hearing will not be necessary where
notice u/s 142(1) has already been issued.
• A refund cannot be granted u/s 144.
• Assessment u/s 144 shall be completed within Two

years from the end of relevant assessment year.

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Module 20 - Assessment

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What is self-assessment

• Before submitting return he is supposed to ﬁnd out

• From 1 April 2008 all corporate assessees & other

assesses (who are subject to compulsory audit u/s

• Where the amount paid by the assessee is falls short

• If any assessee fails to pay whole or any part of such

• Return of Income – if assessee has not

• Documents & Accounts – The assessing of ficer

• Furnishing Information – The assessing of fic er

• The assessee shall be given chance of being

• u/s 143(1) the assessing oﬃcer can complete

• The assessment is completed on the basis of

• With effect from April 1, 2008 Two stage

• Incase no adjustment is required the

• An intimation of tax or interest due u/s 143(1) should

The scheme of scrutiny is applicable as follows

• The assessing of fic er considers it necessary to

• The notice shall be served on the assessee u/s

• After hearing such evidence as the assessee may

• The assessment u/s 143 should be completed within

1. If any person fails to make a return required u/s

2. If any person fails to comply with all the terms

4. If the assessing oﬃcer is not satisﬁed about

• Best judgment assessment can only be made after

• A refund cannot be granted u/s 144.

• Assessment u/s 144 shall be completed within Two

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