A brief presentation made be me to an audience consisting of semi qualified accountants giving the basics of Income-tax assessments and appeals in India. The contents may undergo a change from time to time based on amendments to the Indian Income-tax Act, 1961.

1. Basics of Income-tax Assessments
Procedures, Appeals & Revision
29th November, 2013
PRESENTED AT THE
COURSE FOR PROFESSIONAL ACCOUNTANTS
ORGANISED BY BOMBAY CHARTERED
ACCOUNTANTS’ SOCIETY
CA Ameet N. Patel

2. TIME FOR FILING RETURN OF INCOME [SEC.
139 (1)]
Different Situations
Due Date for
filing Return
1. Where the assessee is a company
i. Required to file a Transfer Pricing report under section
92E
ii. In any other case
30th November
30th September
2. Where the assessee is person other than a company –
i.
In case where accounts of the assessee are required
30th September
to be audited under any law
ii.
Where the assessee is “working partner” in a firm
whose accounts are required to be audited under
any law
iii.
In any other case
30th September
31st July

3. FILING OF RETURNS - STEPS
 Compute
income for each Source of Income
 Aggregate
the income from various sources
under the respective Heads of Income
 Arrive
at the Gross Total Income
 Claim
the Deductions available
 Arrive
at the Total Income

4. FILING OF RETURNS - STEPS
 Compute
 Reduce
 Add
the Tax payable on the Total Income
the Rebates, if any from the tax payable
Surcharge as applicable to the tax
 Add
the Education Cess to the figure of tax plus
surcharge
 Arrive
at the Gross Tax Liability

5. FILING OF RETURNS - STEPS
 From
the Gross Tax payable, reduce the TDS
 Arrive
at the Net Tax Payable or the Refund due as
the case may be
 If
the net tax payable is equal to or more than Rs.
10,000 then Advance Tax is payable
 Advance
tax is payable in 3 installments (4 in case
of companies) during the previous year itself

6. FILING OF RETURNS - STEPS

If there is a shortfall in payment of advance tax then
calculate Interest u/s. 234B and/or 234C

If the return is filed late then calculate Interest u/s. 234A

From the net tax payable, reduce the Advance Tax

Add the Interest to the balance amount to arrive at the
Self Assessment Tax Payable / Net Refund Due

7. FILING OF RETURNS - STEPS

Pay the Self Assessment Tax

File the Return physically or upload the return
electronically.

8. ADVANCE TAX [SECTION 211]

Advance tax is payable in 3 Instalments
(4 in case of Companies)

Payable on
15th June
 15th September
 15th December
 15th March


and
Where first installment of 15th June is payable only if the
assessee is a company.

9. SELF ASSESSMENT TAX [SECTION 140A]
When on computation of income for the year for the
purpose of filing the return of income it is found that
some tax remains payable even after adjustment of
advance tax along with deducted/collected at source,
such balance tax along with interest thereon is
required to be paid as self-assessment tax before filing
the returns of income.
 From A.Y 2013-14, any return uploaded without paying
the Self-assessment tax would not be accepted by the
Income-tax department and considered defective.


10. RETURN OF INCOME [SECTION 139]

Normal Return

Belated Return

Revised Return

Loss Return

Defective Return

11. NORMAL RETURN
 Who
is required to file return of income

Company or a firm – mandatory requirement

Others – total income exceeds basic threshold
limit (i.e. INR 2,00,000 for A.Y. 2013-14)

Any person who is otherwise not required to
furnish return of income will be required to file a
return if he has any asset located outside India
or has signing authority in any account located
outside India.

12. BELATED RETURN
 Any
person who has not furnished a
return
within the time allowed u/s 139(1) or
 Within the time allowed under a notice issued u/s
142(1),
but filed before the end of one year from the
relevant assessment year or the completion of
the assessment, whichever is earlier


13. REVISED RETURN
Can be filed if the assessee discovers an omission
or wrong statement
 Replaces the original return
 Can be filed before the end of one year from the
relevant assessment year or the completion of the
assessment, whichever is earlier
 Can be revised further
 Belated return cannot be revised


14. LOSS RETURN

Return must be filed within the prescribed time limits

If not filed, no carry forward of loss, however carry
forward of loss under House property head, unabsorbed
depreciation & unabsorbed family planning expenses are
permissible

15. DEFECTIVE RETURN
Incomplete return
 Assessee may be given an opportunity to rectify the
defect
 If the defect not rectified, the return treated as
invalid.
 Return defective if:
 columns of return not filled or annexures not
attached;
 computation of income tax not attached;
 proof of tax deposited is not produced within the
period of two years,
 Non furnishing of tax audit report; etc
 Self-assessment tax is not paid (from A.Y 201314)


16. RETURN IS FILED – WHAT NEXT?

Either a summary assessment (Section 143(1))
and/or

A regular (scrutiny) assessment (Section 143(3))

17. SUMMARY ASSESSMENT [SEC.
143(1)

To be issued only if there is a demand or a refund due.

If no demand/refund then Acknowledgement is
deemed to be the intimation

Time limit – the end of one year from the relevant
assessment year or the completion of the assessment,
whichever is earlier

18. SCRUTINY ASSESSEMENT [SEC.
143 (2)/(3)]



Time limit for issuing notice
Time limit for completing the scrutiny
Type of questions that are being asked

19. REFUNDS [SECTION 237]

A claim for refund shall be claimed in Form No. 30

Adjustment of refund against demand for another
year (Section 245)

20. INTEREST [SECTION 234A
234D]
TO SECTION

For Defaults in furnishing return of income
[SECTION 234A]

For Failure to Deduct and pay tax at source
[SECTION 201(1A)]

Interest for Default in payment of Advance Tax
[SECTION 234B]

21. INTEREST [SECTION 234A
234D]

TO SECTION
For Deferment of Advance Tax [SECTION 234C]
Corporate Assessee [SECTION 234C(1)(a)]
Non Corporate Assessee [SECTION 234C(1)(c)]

Short payment of Advance Tax in case of Capital
Gains/Casual Income [First Proviso to SECTION 234C(1)]

22. INTEREST [SECTION 234A
234D]
 Interest
TO SECTION
on Excess Refund [SECTION 234D]
 For
Making Late Payment of Income tax
[SECTION 220(2)]
 Interest
Payable to Assessee
[SECTION 244A]

23. RECTIFICATION OF MISTAKES
[SECTION 154]

24. RECTIFICATION OF MISTAKES

An income-tax authority may with a view to rectifying any
mistake apparent from the record:
 amend any order passed by it
 amend any intimation or deemed intimation under
section 143(1) and section 200A.
Rectification may also be made on application by the
assessee
 Orders cannot be rectified after expiry of 4 years from the
end of the financial year in which order sought to be
amended was passed
 On rectification plea by assessee – Amendment / refusal
order to be passed within 6 months from the end of the
month in which the application is received by the incometax authority


25. RECTIFICATION OF MISTAKES

Mistake
 Obvious and patent
 Self evident and reached without debate
 Fresh determination of facts should not be required
 Misreading of a clear provision of law/ applying an
inapplicable provision/ overlooking mandatory
provision
 Statutory interpretation should not be involved

Record
 Includes all materials/ documents available at the time
of passing the order of assessment
 Fresh documents/ materials not recorded at the time of
passing the order cannot be considered
 Record of any period can be considered

26. RECTIFICATION OF MISTAKES
 Examples
of mistakes apparent from record
which can be rectified

Error of law or fact

Clerical or arithmetical error

Error in determination of written down value

Overlooking the obligatory provisions of the legislature

Mistakes arising out of retrospective amendment of law

27. REVISION OF ORDERS BY
COMMISSIONER
[SECTION 263 & 264]

28. REVISION OF ORDERS BY
COMMISSION U/S 263

Pre-requisites

Erroneous order
Record shall include and shall be deemed always to have included
all records available at the time of examination by the Commissioner
Revised order should be passed before the expiry of 2 years from
the end of the financial year in which order sought to be revised was
passed
Opportunity of being heard should be given to the assessee before
passing an order under section 263
Powers of Commissioner – Enhance, modify or cancel the
assessment and direct a fresh assessment
Appeal can be filed to the Appellate Tribunal against the order under
section 263






Prejudicial to interests of Revenue

29. REVISION OF ORDERS BY
COMMISSION U/S 264






Revision of orders, on own motion of Commissioner or
on application by the assessee
Revision of order on own motion by the Commissioner,
to be passed within one year from date of order sought
to be revised
Application by assessee should be made within 1 year
from date on which the order in question was
communicated or date on which assessee came to
know of order, whichever is earlier
Order to be passed within 1 year from end of financial
year in which application is made by assessee for
revision
Pre-requisite – Assessee to waive right of appeal
Where appeal against the order has been filed – no
revision possible

30. APPEALS TO
COMMISSIONER(APPEALS)
[SECTION 246A TO 249]

31. APPEALS TO COMMISSIONERS (APPEALS)


Appealable orders (Illustrative):
 Scrutiny assessment order
 Best Judgment assessment order
 Reassessment order
 Rectification order enhancing assessee’s liability
 Appeal against intimation passed under section 200A
 Tonnage tax order
Appeal to CIT(A) within 30 days of
 Date of payment of tax, where appeal is in respect of TDS
under section 195
 Date of service of notice of demand relating to assessment or
penalty
 Date on which intimation of order sought to be appealed against
is served

32. APPEALS TO COMMISSIONERS (APPEALS)



Time extended if sufficient cause proven
Appeal to be filed in prescribed form and manner
CIT(A) fixes a day and place for hearing the appeal, and notice of the
same is given to the appellant and the assessing officer whose order
is being appealed against

During the course of the hearing, CIT(A) may entertain additional
ground/evidence raised by the appellant in seeking modification of
the assessment order passed by the assessing officer

CIT(A)’s order disposing of the appeal is in writing and states
decision and reasons supporting the same

CIT(A) has powers to confirm, reduce, enhance or annul the
assessment
Where possible, CIT(A) to dispose within 1 year from the end of the
financial year in which appeal was filed


33. APPEALS TO TRIBUNAL
[SECTION 252 TO 255]

34. APPEALS TO TRIBUNAL








Should be filed within 60 days of the date on which the order sought
to be appealed against is communicated
Memorandum of cross-objections – within 30 days of receipt of
notice that an appeal has been preferred to the ITAT
Time extended if sufficient cause proven
To be filed in prescribed form and manner
Additional ground/ evidence can be raised for the first time before the
ITAT. In such a case opportunity of being heard should be given to
the assessing officer
After hearing both parties, the ITAT passes an order as it thinks fit
and communicates the same to the assessee and the Commissioner
Where possible, ITAT to dispose within 4 years from the end of the
financial year in which appeal was filed
In case order of stay is made, appeal to be disposed within 180 days
of stay order; else, stay stands vacate

35. APPEALS TO TRIBUNAL

Mistakes apparent from record – Order of ITAT can
be amended within 4 years from date of ITAT order
[Section 254(2)] if it is brought to the notice by the
assessee or the assessing officer

Final fact finding authority

Binding nature

36. APPEAL TO HIGH COURT
[SECTION 260A]

37. APPEALS TO HIGH COURT
Right exercisable u/s 260A
 Preferred against ITAT’s order
 Only for a case involving a “substantial question of
law”
 Should be filled within 120 days of receipt of ITAT’s
order
 Can also be filed by the Tax department
 Rules framed for court proceedings and conduct
has to be observed


38. APPEALS TO SUPREME COURT
 Right
exercisable u/s 261.
 Preferred against High Court’s order
 Only for a case involving a “substantial question
of law”
 Should be filled within 60 days of receipt of
High Court’s order
 Can also be filed by the Tax department
 Rules framed for court proceedings and
conduct has to be observed

39. Write to
patelameet@hotmail.com
if you have any queries