1. Pr esented by: Ashish Goel
Ar ticle Assistant
S . R amanand Aiyar & Co| Char ter ed Accountants
Contact: 9991423232|ashishgoel1205@gmail.com
Income Tax Assessment
Procedures
SRA

2. INDEX
SRA
 Filing of Return of Income
 Types of Assessments
 Scrutiny Assessment under section 143(3)
 Practicality of Scrutiny Assessment
 Appellant Authorities

3. Filing of Return of Income
SRA
Return of Income can be filed under following sections:
 Section 139(1) : Compulsory filing of Return of Income
 Section 139(3) : Return of Loss
 Section 139(4) : Belated Return
 Section 139(4A) : Return of Income of Charitable Trust and Institutions
 Section 139(4B) : Return of Income of Political Parties
 Section 139(4C) : Mandatory filing of return by Scientific Research Associations, Trade
Unions etc.
 Section 139(4D) : Mandatory filing of returns by Universities, colleges etc
 Section 139(5) : Revised Return
 Section 142(1) : Return by serving notice
 Section 148 : Return by serving notice
 Section 153A : Return by serving notice

4. Types of Assessments
SRA
Scrutiny Assessments – Section 143(3)
Best Judgment Assessment – Section 144
Assessment & Reassessment of Income escaping assessment – Section 147
Assessment in case of Search & Requisition – 153A

5. SRA
Processing of Returns : Section 143(1)
•Return is made under section 139 or in response to notice under section 142(1)
•Return us then processed by central processing centre
•Any arithmetical error or any incorrect claim which is apparent from any information is
adjusted
•The tax and interest is calculated and credit and relief is given and if there is any balance
tax/refund left then an intimation u/s 143(1) is generated
•It is to be sent before the expiry of one year from the end of Financial year(FY) in which
the return is filed

6. SRA
Selection of Income Tax Return for Scrutiny
One of the methods of selection of scrutiny is Computer Aided Scrutiny Selection (CASS)
and generally following types of cases are selected randomly for scrutiny through CASS
1. Claiming High Refund
2. Declaring Low net profit margin
3. Claiming Loss return
4. Increasing share capital during the year
5. High volume of unsecured Loans
6. High volume of sundry creditors balances
7. Aggregate Cash deposit of Rs. 10.00 Lakhs and more in the savings bank account
8. High volume of Investments in Mutual Funds

7. SRA
Notice for making Scrutiny Assessment : Section 143(2)
•If Assessing Officer(AO) considers that it is necessary to ensure that the assessee has not
understated his income than he can serve a notice to assessee requiring him, on a date
specified therein, to attend his office and produce or cause to produce any evidence on
which the AO may rely on support of the return
•Time Limit: No notice shall be served on the assessee after the expiry of 6 months from
the end of FY in which return is furnished
•For example : For return filed for FY 2013-14 (AY 2014-15), the notice must be served up
to 30.09.2015

8. Regular/Scrutiny Assessment u/s 143(3)
•A return of income (or loss) has been made u/s 139 or in response to notice u/s 142(1)
•If the AO feels necessary to ensure that the assessee has not understated his income or has
not computed excessive loss or has not underpaid his tax in any manner he can issue notice
u/s 143(2) to initiate the process of assessment
•Time limit – 2 years from the end of the assessment year in which the income was first
assessable
•Reference made to the Transfer Pricing Officer(TPO) u/s 92CA(1)
The AO may refer to the TPO in case there are international transactions of more than Rs
15,00,00,000 with Associate Enterprise for particularly looking into correctness of Arm’s
Length Price
•Time Limit – In case the reference is made to the TPO the order must be passed within 3
years from the end of the AY in which the income was first assessable
SRA

9. Process of Scrutiny Assessment
(a) Service of Notice u/s 143(2) by AO to the assessee asking him to attend the office of AO-
The notice is like that……In connection with the ROI furnished for AY xxxx-xx I have certain points
to discuss with you so you are requested to attend my office in person or by an **authorized representative on
such and such date at such and such time (11:00AM-most probably)
(**A CA/CS/CMA can be authorised representative(AR) only upto stage of tribunal….in the High
courts and Supreme court, only and only an Advocate can be a authorised representative)
(b) Asking for various details like books of accounts, supporting documents & explanations
by sending the questionnaire u/s 142(1)(ii)
(c) Discussing various points with assessee where the AO has difference of opinion and AO
will give a chance to the assessee to justify his point.
(d) Passing of Assessment order u/s 143(3) with Notice of demand, if any – Completing the
assessment
SRA

10. SRA
Most commonly asked information by Assessing Officer
•A brief note on business activities and history of the company/business
•A copy of the return of income with computation of income statement
•Statement showing the shareholding pattern of the company/firm and list of directors
•Audit report u/s 44AB of the Income Tax Act
•Exemptions and Deductions
•Gross and Net Profit Ratio
•Previous Assessment Orders
•Carried Forward Losses
•Loans given to relative parties
•Bank Loan confirmation
•Fixed Assets
•Proof of payment of statutory dues
•Unsecured loan
•A copy of Bank statement
•List of creditors and confirmation
•Details of Bad Debts written off
•Details of Provisions
•Statutory liability outstanding as on 31st March

11. SRA
Aftereffects of Assessments
(a) Increasing the income declared or
(b) Decreasing the loss claimed or
(c) Increasing the tax liability
(d) Reducing the refund claimed
(e) In any way penalizing or prosecuting the assessee.
By giving supporting provisions and decided case laws relied by him in framing the
assessment order

12. SRA
Aftereffects of Assessments
Effects of Assessment:
Total Income/(Loss) as per ROI xxxx
Add: Additions made as above
1) Adjustment made as per sec 92CA(1) xxxx
2) Disallowance made for a particular expense xxxx
Total Income/(Loss) as per sec 143(3) xxxx
Tax Payable
Tax on assessed income xxxx
Add: Interest u/s 234B & C xxxx
Less: Prepaid Tax xxxx
Net Tax Payable xxxx

13. Appellant Authorities
Assessment Order
(within 30 days of service
of notice of demand)
Commissioner (Appeals)
(60 days from the date the order is
Communicated to the assessee or the
commissioner)
Income Tax Appellate Tribunal
(120 days from the date the order is
Communicated to the assessee or the
commissioner)
High Court
Supreme Court
SRA

14. Appellant Procedure in case of a Transfer Pricing Adjustment
and a Foreign Company
Assessment Order
(within 30 days of service of
notice of demand/Draft order)
Commissioner (Appeals)/
Dispute Resolution Panel
Income Tax Appellate Tribunal
High Court
Supreme Court
SRA

15. THANK YOU
SRA