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Regular / Scrutiny Assessment [Section 143(3)] — On the basis of Return of Income and after Hearing Additional Evidence

1.   Compulsory Service of Notice to the Assessee [Section 143(2)]

Where a return has been furnished under section 139, or in response to a notice under section 142(1), the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that—

(i)         the assessee has not understated the income or

(ii)        has not computed excessive loss or

(iii)       has not under-paid the tax in any manner,

shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return.

However, no notice under this sub-section shall be served on the assessee after the expiry of 6 months from the end of the financial year in which the return is furnished.

Prescribed Authority U/s 143(2)[Rule 12E].—

The prescribed authority under section 143(2) shall be an income-tax authority not below the rank of an Income-tax Officer who has been authorised by the Central Board of Direct  Taxes to act as income-tax authority for the purposes section 143(2).

2.   Authentication of Notices and Other Documents [Section 282A]

Notices and documents required to be issued by income-tax authority under the Act shall be issued by such authority either in paper form or in electronic form in accordance with such procedure as may be prescribed.

3.   Notice Deemed to be Valid in certain circumstances [Section 292BB]:

Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was—

(a)        not served upon him: or

(b)        not served upon him in time; or

(c)        served upon him in an improper manner.

However, nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.

4.   Consequences of Failure to Comply with Notice under Section 143(2):

The consequence of a default in complying with the notice under section 143(2), may entail an ex parte, best judgment assessment under section 144. Such a default may also attract penalty under Section 271(1) (b) which has been fixed at Rs. 10,000.

5.   Assessment after Evidence [Section 143(3)]

The Assessing Officer, on the day specified in the notice under section 143(2) or as soon afterwards, as may be, shall, by order in writing, make an assessment of the Total Income or the loss of the assessee and determine the sum payable by him or refund of any amount due to him on the basis of such assessment. The assessment shall be made after hearing:

(i)         such evidence as the assessee may produce on the dates specified, from time to time and such other evidence as the Assessing Officer may require on specified points:

(ii)        all relevant material gathered by him.

Meaning of the word 'Hearing' [Section 2(23C)]:

"Hearing" includes communication of data and documents through electronic mode.

(1)   Deduction not to be Allowed i© claim is not made in the Return of Income:

As per section 80A(5), where the assessee fails to make a claim in his return of income for any deduction under Section 10A or Section 10AA or Section 10B or Section 10BA or under any provision of Chapter VIA under the heading 'C—Deductions in respect of certain incomes Le. sections 80-IA to 80RRB, no deduction shall be allowed to him thereunder.

(2)   New Scheme for Scrutiny Assessment [Section 143(3A)/(3B)/(3C)]

(i)      Central Government to make a scheme for making assessment [Section 143(3A)]:

The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of making assessment of total income or loss of the assessee under section 143(3) so as to impart greater efficiency, transparency and accountability by—

(a)        eliminating the interface between the Assessing Officer and the assessee in the course of proceedings to the extent technologically feasible:

(b)        optimising utilization of the resources through economies of scale and functional specialisation:

(c)        introducing a team-based assessment with dynamic jurisdiction.

(2)    Provisions of section 143(3A) may not apply or apply with modification in certain cases [Section 143(3B)]:

The Central Government may, for the purpose of giving effect to the scheme made under section 143(3A), by notification in the Official Gazette, direct that any of the provisions of this Act relating to assessment of total income or loss shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification.

Provided that no direction shall be issued after 31.3.2020 (extended up to 31.3.2022, by the Finance Act, 2020).


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