Assessment under section 143 of income tax act.

1. PALLAV DODRAJKA
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2. TOPIC:
ASSESSMENT U/S 143
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3. Assessment
• The Income Tax Department examines the return
of income filed under section 139 for its correctness.
• The process of examining the return of income by the Income-
Tax department is called as “Assessment”.
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4. Assessment Under Section 143
Assessment under section 143 of Income Tax Act consist of:
1. Summary assessment without presence of assessee under 143(1)
2. Scrutiny assessment under section 143(3)
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5. Section 143(1) Summary Assessment
Correct Tax is discovered by adjusting basic errors, like:
1. Any arithmetical error in the return,
2. An incorrect claim made in return,
3. The loss claimed or carried forward of any previous year in return shall
be disallowed if return is filed after the date specified in Section 139(1),
4. Deduction under section 80 shall also be dis allowed if return is filed
after the due date.
5. The expenditure shown in the audit report but not claimed while
preparing income tax return shall be disallowed.
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6. Assessment Under Section 143(1): Process
1. Formation of comparative statement showing the calculation of
assessee and calculation of the AO.
2. Intimation is given to the assessee in writing or electronic mode.
3. Response of assessee is incorporated in the return,
4. If the response is not received in 30 Days from the issuance date the
adjustments should be incorporated.
5. Adjustments are made and Tax liability & interest on it is calculated.
6. Tax liability so computed is adjusted against advance tax, TDS, TCD
or any relief allowable.
7. Intimation is prepared and sent to assessee stating amount payable or
refund receivable.
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7. Time Limit
Assessment of the return can be done in two immediate consecutive
assessment year after end of the previous year for which return was filed.
Example: If return was filed for FY 2015-16 on date 31/09/2016 then no
intimation shall be sent after 31.03.2018. i.e. two assessment year 2016-17
and year 2017-18.
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8. Section 143(2)
To ensure that the income furnished is not understated or any excessive
loss is claimed or has not underpaid the tax. The AO may call the assessee
by serving a notice to remain present by himself or by representative and
submit the evidences and documents to prove the genuinity of the income
tax return.
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9. Section 143(3): Scrutiny Assessment
Introduction :
The detailed checking of the income tax return furnished by the assessee is
done at this stage by the assessing officer. Here the AO verifies the
genuineness and correctness of the deductions, claims etc done by the
assessee.
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10. Assessment Under Section 143(3): Process
1. If AO deems fit, then a notice may be served to assessee to remain
present in the office and produce the evidence related to the income
tax return.
2. The AO needs to issue notice as per provisions of Section 143(2) to
carry assessment under this.
3. Assessee or his representative should remain present in the office of
the AO for placing supporting evidences arguments
4. After gathering all the evidences and considering its correctness, the
AO shall make an assessment of the total income or loss and determine
the sum payable by him or refund of any amount due to him.
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11. Time Limit
As per section 153, assessment under section 143(3) shall be made within
a period of two years from the end of the relevant assessment year.
Example: If income tax return is filed of FY 2015-16 is filed on
30/09/2016, then assessment shall be made within 3 years from the end of
relevant FY i.e. last date of completion of the assessment will be 31/03/
2019.
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12. Section 143(4)
This section relates to the tax paid or refund received after such
assessment process is done under Section 143(3) or Section 144.
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13. Assessment Under Section 143(4): Process
1. Any tax or interest, paid at the time of receipt of intimation under
Section 143(1) shall be deemed to be paid under such assessment i.e.
Section 143(3) or 144.
2. If after such regular assessment it is discovered, that excess refund was
issued under section 143(1) as compared to assessment done under
Section 143(3), then the excess amount so received shall be considered
as tax payable by the assessee.
Example: If Refund of Rs. 1,00,000 was issued at the time of assessment
under section 143(1), but during the assessment under 143(3), it was
discovered that refund to be issued was of only Rs 75,000. So Rs. 25,000
will be deemed to be tax payable by the assessee.
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