1. Proce dure
ssm ent
Asse
Bos e, IIT
Sha nkar
TU, Puri
MS

2. Assessment Procedure
Definition of Assessment
Assessment is a process of determining
true and correct income of a tax payer.
It starts with filing of Income Tax
returns and ends in determination of
tax payable or refundable.

3. Assessment Procedure
Assessment procedure:
• Filing of return by assessee.
• Notice for filing of return.
• Issue of notices u/s 142(1) & 143(2).
• Causing enquires to collect information.
• Determination of income or loss.
• Determination of tax payable or
refundable.

4. Assessment Procedure
Filing of I.T. returns : Sec. 139
 Company & Firm compulsory.
 Others – if gross total income exceeds
the basic exemption limit.
Due dates:
Company & compulsory
audit cases : 30thSept of A.Y.
Others : 31st July of A.Y.

5. Assessment Procedure
There are provisions for filing loss
returns u/s 139(3). Such returns may be
filed within the due dates u/s 139(1) to
get the benefit of carry forward of loss.
Loss determined can be carried forward to
subsequent years for set off against
future income, upto a certain time limit.

6. Assessment Procedure
Returns can be filed even after due
dates, u/s 139(4) upto one year from
the end of relevant A.Y. but before
completion of assessment.

7. Assessment Procedure
Returns already filed within due dates
or filed in response to notice u/s
142(1) can be revised, if some
mistakes are detected. This can also
be done within one year from the end
of A.Y. u/s 139(5) , but before
completion of assessment.

8. Assessment Procedure
If an assessee does not file a return, but
the A.O. thinks that he has taxable
income, then a notice u/s 142(1)(i) may
be issued to him, asking him to file a
return within a specified time.
Such notice can be issued only after the
expiry of the due date for filing of
return.

9. Assessment Procedure
Where a return is filed u/s 139 or in
response to notice u/s 142(1) processing
is done by making adjustments of any
arithmetical error or any incorrect claim
apparent from information in the return
If any tax etc. is found due, an intimation
prepared or generated is sent asking the
assessee to make payment of tax or if
any refund is due, it is granted.

10. Assessment Procedure
An intimation will also be sent to the
assessee where adjustment is made to
the returned loss but no tax is payable
nor any refund becomes due .
However every intimation must be sent to
the assessee within one year from the
end of the relevant financial year in
which return was filed.

11. Assessment Procedure
Types of Assessments:
 Scrutiny Assessment.
 Best Judgement Assessment.
 Income Escaping Assessment.
 Search Assessment.

12. Assessment Procedure
Scrutiny Assessment.
Some of the cases are selected for scrutiny
assessment u/s 143(3), as per the norms
laid down by the Board. In such cases
detailed enquiries and investigations are
made to ascertain true and correct
income.

13. Assessment Procedure
Notice u/s.143(2) is issued to the
assessee asking him to submit
documents in support of his return.
Such notice must be issued within one year
from the end of the month in which
return was filed/six months from the
end of F.Y. in which the return was filed.
( by F.A. 2008)

14. Assessment Procedure
 Notice u/s.142(1)(ii) is also issued to the
assessee asking him to submit certain
documents and evidences which the
assessing officer may require.

15. Assessment Procedure
The A.O., after considering the materials
gathered on enquiry and the evidences
submitted by the assessee, shall pass an
assessment order determining the total
income or loss and ascertain the tax
payable or refundable.

16. Assessment Procedure
Sec.144- Best Judgement Assessment.
If any assessee
 (a) fails to file return u/s 139. or
 (b) fails to comply with notices u/s 142()
or 142(2A). or
 (c) fails to comply with notice u/s 143(2).

17. Assessment Procedure
The A.O. can make assessment to the best
of his judgement, based on the materials
he has collected and the materials
available on records and determine the
tax payable.

18. Assessment Procedure
Sec.147- Income Escaping
Assessment.
If the A.O. has reason to believe that
income has escaped assessment he may
assess or re-assess the income that has
escaped assessment.
The reasons to be recorded in writing and
notice u/s 148 is to be issued asking the
assessee to file a return.

19. Assessment Procedure
Restrictions for reopening :
• No assessment beyond 6 years can be
reopened.
• No assessment beyond 4 years can be
reopened unless there is an escapement
of income of Rs.1 lakh or more.
• Approval of higher authorities may have
to be obtained in some cases.

20. Penal provision
Assessment Procedure
Assessments are to be completed within
the prescribed time limit. Time limit for
completion of assessments u/s 143(3) or
144, assessments re-opened u/s.147 and
other assessments following order of
the appellate or other authorities.

21. Penal provision
Assessment Procedure
Time limit : Sec. 153
 Assessments u/s 143(3) or 144 - 21
months from the end of relevant A.Y.
 Re-opened u/s.147 - 9 months from the
end of relevant F.Y. in which notice u/s
148 was served,

22. Assessment Procedure
Set aside by ITAT- 9 months from the
end of relevant F.Y. in which the
appellate order was received by
CIT/CCIT.
Set aside by CIT u/s 263 or 264- 9
months from the end of relevant F.Y. in
which the order was passed by the CIT.
No time limit for giving effect to the
finding or direction of appellate orders.