Scribd
Upload
18 views9 pages

Assessment and Reassessment

Uploaded by

Mahaktaj Basha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
18 views9 pages

Assessment and Reassessment

Uploaded by

Mahaktaj Basha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 9

DIRECT TAX – II

Prof.Harsha.R
Faculty of Management and Commerce
Assessment v/s Reassessment, Income
escaping assessment

Prof.Harsha.R
Faculty of Management & Commerce
DIRECT TAXATION
Assessment v/s Reassessment
After filing a tax return, the returns are automatically processed at the Central
Processing Centre (CPC) in Bangalore. The software automatically selects
certain cases for further scrutiny by the Assessing Officer (AO) based on certain
criteria fixed by the Central Board of Direct Taxes (CBDT).
Assessment
The entire proceeding, from the time a taxpayer receives a notice to the time the
assessing officer passes the final assessment order determining the taxpayer’s
final taxable income, is called an assessment proceeding. A scrutiny assessment
notice can be issued within three months from the end of the financial year in
which the return of income has been filed.
DIRECT TAXATION
Assessment v/s Reassessment
Reassessment
If an AO has any reason to believe that any income chargeable to tax has
escaped assessment, the AO has the authority to issue a notice to reopen the case
for scrutiny.
For instance, scrutiny proceedings in the case of Mr Rohan for FY 2023-24,
have concluded, and the tax authorities are in agreement with the income Rohan
has disclosed in his return. Subsequently, the assessing officer receives some
information with regard to a sale of land that Rohan has carried out during FY
2023-24. Rohan did not disclose capital gains in his return for FY 2023- 24. On
the basis of such information, the AO can reopen the assessment.
DIRECT TAXATION

Time Period to Issue Notice


As per law, a valid notice must always be served before an assessment or
reassessment. The notice cannot be sent if three years have passed since the
relevant assessment year. However, a notice can be issued after three years but
within ten years if the Assessing Officer (AO) possesses books of accounts or
documents or any other evidence showing income chargeable to tax, which
escaped assessment. This income evidence should be in the form of an asset,
transaction of an event, or any entries in the books of accounts amounting to
Rs.50 lakhs or more between three to ten years from the relevant assessment
year.
DIRECT TAXATION

Persons Authorized to Issue a Reassessment Notice


• An assessing Officer (AO) currently ranked below the position of an
Assistant Commissioner or Deputy Commissioner will not be
permitted to issue a notice to an assessee.
• This can only be circumvented by the Joint Commissioner, provided
he or she is content that the reasons given by the Assessing Officer
are valid enough for the issuance of any notice to an assessee.
• No associate assessee is supplied with a notice on the expiration of a
four-year period from the conclusion of the AY.
DIRECT TAXATION
Income escaping assessment

Section 147 – Income escaping assessment


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
DIRECT TAXATION
When it is treated that income chargeable to tax has escaped
assessment
For the purpose of this section there are certain cases when income chargeable to
tax is deemed to be escaped assessment and reassessment notices can be issued
under such circumstance –
1. When no return is filed by the assessee even though his total income exceeds
the maximum amount which is not chargeable to income tax.
2. When return is furnished but no assessment is made and AO notices that
assessee has understated the income or has claimed excessive loss,
deduction, allowance or relief in return.
3. When the assessee fails to submit a report in respect of international
transaction as required under section 92E
4. When income chargeable to tax has been under assessed, assessed at loo low
rate or excessive loss or depreciation allowance has been computed.
5. Where a person is found to have assets outside India.
THANK YOU

Prof.Harsha.R
Faculty of Management and Commerce
[email protected]

You might also like