54. ASSESSMENT / SCRUTINY – How Your File is Assessed / Scrutinised

Law and procedure for Assessment:

The salient features of the new assessment procedure are:

  1. The requirement of passing the assessment order in all cases where returns are filed, has been dispensed with. The matter now generally ends with the filing of return and issue of the Acknowledgement Slip.

  2. The Assessing Officer shall send intimation where any tax or interest is found payable by the assessee or the refund is due to the Assessee.

  3. Any tax or income found due on the returned income or any refund found payable shall be demanded from or granted to the assessee along with the intimation.

  1. Intimation should be sent within one year from the end of the financial year in which the return is filed. Consequently no tax or interest can be demanded after the expiry of such period.

  2. In cases where no amount is payable by the assessee or refund due to the assesses, the acknowledgement of the return shall be deemed to be intimation.

  3. Scrutiny assessments shall be carried out in certain cases selected by the Assessing Officer.

Compulsory Scrutiny:

As per latest instructions, the following cases will be compulsorily taken up for scrutiny:

  • For Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad:
  1. If deductions claimed u/s 8OCCC to 80U are Rs. 10 lakhs or more.
  2. In case of refund claimed of Rs. 10 lakhs or more.
  3. In case where addition/disallowance of Rs. 5 lakhs and above has been confirmed by CIT (A) in any three preceding years.
  • For other places:
  1. If deductions claimed under Sec. 8OCCC to 80U are Rs. 5 lakhs or more.
  2. In case of refund claimed of Rs. 5 lakhs or above.
  3. In case where addition/disallowance of Rs. 1 Iakh & above has been confirmed by CIT (A) in any three preceding years.
  • All search, seizure and survey (u/s 1 33A) cases.

  • Cases where income of Rs. 2 Iakhs or more has been claimed as exempt.

  • Cases where the value of International Transaction (u/s 92B) exceeds Rs. 5 crore.

  • All cases of Professional with gross receipt of Rs. 50 Iakh or more and income declared is less than 20% of gross received.

  • All case of contractors having gross contract receipts of more than Rs. 2 crores and net income is less than 5% of gross contract receipts.

  • All cases of stock brokers and sub brokers having brokerage of Rs. 50 Iakhs or more and taxable income of less than 10% of gross brokerage.

  • All cases of stock brokers and sub brokers claiming bad debts of Rs. 5lakhs or more.

 
Sec. 143(3) : Scrutiny Assessments by Income Tax Department
“Penalties” Under Income Tax Act. 1956
How is a Search Operation Conducted by Income Tax Department ?
Surveys for Checking Ostentatious Expenditure
Surveys for Enforcing Compliance with Provisions of TDS
“Summon” U/s 131 of Income Tax Act.
Investigation by Income Tax Department:
Appellate Authorities of Income Tax Department
Power to Call for Information U/s Sec. 133(6) of Income Tax Act.
Specific Surveys U/s 133A(1) of Income Tax Act.
Types Of Income Subject To TDS [Deduction Of Tax At Source]
Pre-Requisite For Claiming Income Tax Refund
Benefits of Filing Income Tax Returnsn
Section-139(9): Defective Tax Return
 
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How is a Search Operation Conducted by Income Tax Department ?
The provisions relating to search and seizure are contained in section 132 of the Income Tax Act, 1961.
 
Sec. 143(3) : Scrutiny Assessments by Income Tax Department
Scrutiny assessment refers to the examination of a return of income by giving an opportunity to the assessee to substantiate the income declared and the expenses, deductions, losses, exemptions, etc. claimed in the return with the help of evidence..
 
“Penalties” Under Income Tax Act. 1956
Penalties by way of monetary payments are charged under the Income Tax Act for various defaults relating to payment of taxes, maintenance of accounts, for noncompliance and non co-operation during proceedings, for evasion of tax, etc..
 
Income of Individuals And HUFs – As a Tax Payers Under Income Tax Act, 1961.
The individual tax payers and also the HUFs while proceeding to calculate the net taxable income in the first phase are required to arrive at the gross total income under different heads of income...
 
Types Of Income Subject To TDS [Deduction Of Tax At Source]
The following types of incomes are mainly subject to deduction of tax at source: (a) Salaries Section 192. (b) Interest on securities Section 193..
 
Pre-Requisite For Claiming Income Tax Refund
For claiming income tax refund the first prerequisite is that there should have been excess tax paid or deducted at source on the basis of return of income.
 
Section-139(1) : Provision for Voluntary Income Tax Return
Every person,— (a) being a company or a firm; (whether having income or loss) or (b) being a person other than a company or a firm if his total income or the total ncome of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall file a return of his income in the prescribed form.
 
Benefits of Filing Income Tax Returnsn
We have heard many a times that every individual whose total income exceeds the maximum exemption limit is obligated to furnish his/her Income Tax Return or ITR.
 
Section-139(9): Defective Tax Return
Where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of 15 days from the date of intimation.
 
Section 139(5) : Revised Income Tax Return
If any person, having furnished a return u/s 139(1), or in pursuance of a notice issued under section 142(1), discovers any omission or any wrong statement therein, he may furnish a revised return at any time.
 
Section-139(4A) : Income Tax Return of Charitable and Religious Trusts
Every person in receipt of income derived from property held under trust or other legal obligation wholly or partly for charitable or religious purposes or of income being voluntary contributions referred to in section 2(24)(iia) shall.
 
Section-139(4) : Belated Income Tax Return
If an assessee has not furnished a return of his income within the time allowed to him under section 139(1) or within the time allowed under a notice issued under section 142(1).
 
 
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