TDS/TCS, Returns, Refund & Recovery
right, and having retained and used it, is bound to Fifteenth
make the party good , just as an individual would be under
like circumstances. The obligation to refund money received and retained without right implies and carries with
it the right to interest.
In view of the above judgment of the Apex Court it is settled that if resident deductor is entitled for the refund of
tax deposited u/s 195, then it has to be refunded with interest u/s 244A, from the date of payment of such tax.
ASSESSMENT
Assessment means to compute the income & tax of the assessee. It begins with self-assessment and ends
Provision of section 140A is as follows –
Where any tax is payable (after deducting relief, rebate, advance payment of tax or tax deducted
or collected at source or MAT or AMT credit, if any) on the basis of return furnished the assessee is
date, then such interest or fee should be paid along with self-assessment tax.
Where the amount paid by the assessee falls short of the aggregate of tax, interest and fee, the amount
any, shall be adjusted towards tax payable.
After assessment, any amount paid under this section shall be deemed to have been paid towards such
assessment.
If an assessee fails to pay whole or any part of such tax or interest or both in accordance with the
provisions of sec. 140A, he shall be deemed to be an assessee in default.
After submission of return or on non-submission of return by the assessee, assessment is made by the Income
Intimation u/s 143(1);
Scrutiny Assessment u/s 143(3);
3. Best Judgment Assessment u/s 144;
Income Escaping Assessment u/s 147
following manner:
1. Pre-Assessment Inquiry
accounts, documents etc. [Section 142(1)(ii) & (iii)]
PP-DTL&P
INTIMATION BY ASSESSING OFFICER
No intimation shall be
necessary or expedient to ensure that the assessee has not understated his income, declared excessive loss
or under-paid the tax.
assessee may rely, in support of the return.
No notice shall be served on the assessee after the expiry of 6 months from the end of the
After collecting such information and hearing such evidence as the assessee produces in response
gathered;
assessee and determine the sum payable by him or refund of any amount due to him on the basis of such
assessment
Assessment u/s 143(3) should be completed within 18 months (from A.Y. 2020-21: 12 months) from the end of
the relevant assessment year.
TDS/TCS, Returns, Refund & Recovery
139(4C) or (4D)
: The Finance Act, 2018 has inserted a new sub-section (3A) in Section 143 that the Central
and accountability by:
to the extent technologically feasible.
(b) Optimising utilization of the resources through economies of scale and functional specialization.
(c) Introducing a team-based assessment with dynamic jurisdiction.
As part of e-governance initiative to facilitate conduct of assessment proceedings electronically, Income-tax
department has launched ‘E-Proceeding’ facility. Under this initiative, CBDT has made it mandatory for the
had issued the instructions and notice formats for conducting scrutiny assessments electronically. As per the
instruction, except search related assessments, all scrutiny assessments shall be conducted only through the
An amendment has been made in sub-section (3A) of section 143 of the Act to,-
i. expand the scope so as to include the reference of section 144 of the Act relating to best judgement
assessment in the said sub-section;
ii. (ii) provide that Central Government may issue any direction under sub-section (3B) of the said section
upto 31st March, 2022.
In the following situations assessment shall be made under this section –
b. If the person fails to comply with the terms of notice u/s 142(1); or
c. If the person fails to comply with the directions u/s 142(2A) requiring him to get his accounts audited; or
d. If the person fails to comply with the terms of notice u/s 143(2), requiring his presence or production of
evidence and documents.
under an obligation to make an assessment under this
mandatory in nature.
The assessment u/s 144 can only be made after giving the assessee a reasonable
opportunity of being heard. Such opportunity shall be given by serving a “Show cause notice” calling upon the
Such opportunity need not be given, where notice u/s 142(1) has already been issued.
18 months (from A.Y. 2020-21: 12 months) from
the end of relevant assessment year
PP-DTL&P
on the application of an assessee) –
Call for and examine the record of any proceeding in which an assessment is pending; and
Having regard to the nature of the case or the amount involved or for any other reason,
The Income-tax Act is amended to provide for an alternate dispute resolution mechanism which will facilitate
expeditious resolution of disputes in a fast track basis. The provision relating to alternate dispute resolution
mechanism are as under:
(hereafter in this section referred to as the draft order) to the eligible assessee# if he proposes to make
any variation in the income or loss returned which is prejudicial to the interest of such assessee.
# Eligible assessee means:
(i) Any person in whose case the variation referred to arises as a consequence of the order of the
(ii) Any foreign company
2. On receipt of the draft order, the eligible assessee shall, within 30 days of the receipt by him of the draft
order:
(b) File his objections, if any, to such variation with, –
(i) The Dispute Resolution Panel; and
$ Dispute Resolution Panel means a collegium comprising of 3 Commissioners of Income-tax constituted
by the Board for this purpose.
end of the month in which,—
(i) The acceptance is received; or
The time limit is irrespective of time limit given u/s 153 (or 153B) for passing an assessment order.
4. The Dispute Resolution Panel shall, in a case where any objections are received, issue such directions,
considering the following:
TDS/TCS, Returns, Refund & Recovery
a. Draft order;
c. Evidence furnished by the assessee;
authority;
e. Records relating to the draft order;
f. Evidence collected by it; and
g. Result of any enquiry made by it.
6. The Dispute Resolution Panel may, before issuing any directions:
b. Cause any further enquiry to be made by any income tax authority and report the result of the
same to it.
it shall not set aside any proposed variation or issue any direction for further enquiry and passing of the
assessment order.
opinion of the majority of the members.
10. No direction shall be issued unless an opportunity of being heard is given to the assessee and the
of the revenue, respectively.
11. No direction shall be issued after 9 months (irrespective of any limitation given u/s 153) from the end of
the month in which the draft order is forwarded to the eligible assessee.
the assessment without providing any further opportunity of being heard to the assessee, within 1
month from the end of the month in which the direction is received.
13. The provisions of this section shall not apply to any assessment or reassessment order passed by the
in sec. 144BA
chargeable to tax has escaped assessment$ for any assessment year.
A reassessment proceeding may end without creating a tax liability.
Following shall deem to be the cases where income chargeable to tax has escaped assessment –
1. Where no return of income has been furnished by the assessee although his total income (or the total
PP-DTL&P
income of any other person in respect of which he is assessable under this Act) exceeded the maximum
amount which is not chargeable to tax;
2. Where a return of income has been furnished by the assessee but no assessment has been made and
excessive loss, deduction, allowance or relief in the return;
3. Where the assessee has failed to furnish a report in respect of any international transaction which he
was so required u/s 92E;
4. Where an assessment has been made, but—
computed.
5. Where a return of income has not been furnished by the assessee or a return of income has been
furnished by him and on the basis of information or document received from the prescribed income-tax
the maximum amount not chargeable to tax, or as the case may be, the assessee has understated the
income or has claimed excessive loss, deduction, allowance or relief in the return.
India.
Section 147 can be applied only on ’reason to believe’ that income chargeable
to tax has escaped assessment. It cannot be applied merely on suspicion, gossip or rumour. There must be
nexus between material and belief. Furthermore, before issuing any notice for assessment or reassessment,
Once an assessment has been reopened, any income –
may also be included in the assessment in the course of the proceedings of this section.
Where an assessment is reopened u/s 147 and the assessee –
has not opposed any part of the original assessment order for that year either u/s 246 to 248 or u/s 264;
and
shows that he had been assessed on an amount or to a sum not lower than what he would be rightly
liable for even if the income alleged to have escaped assessment had been taken into account, or the
assessment or computation had been properly made.
– then the proceedings u/s 147 shall be dropped.
If an assessment/reassessment is made u/s 147, then tax shall be chargeable
at the rates at which it would have been charged had the income not escaped assessment.
TDS/TCS, Returns, Refund & Recovery
notice.
Notice u/s 148 cannot be issued during pendency of assessment proceedings
Notice u/s 148 can be issued subject to the following time limit –
Time limit for issue of notice Size of escaped Person authorised to issue notice
income
Upto 4 years from the end of the Any amount
relevant assessment year Joint Commissioner
Beyond 4 years and upto 6 Rs. 1,00,000 or
years from the end of relevant more Chief Commissioner or Chief Commissioner or
assessment year. Principal Commissioner or Commissioner.
In case income is in relation to any Notice u/s 148 has to be issued within 16 years
from the end of the relevant A.Y.
in any entity) located outside India
has escaped assessment
Upto 4 years from the end of Any amount
relevant assessment year Joint Commissioner.
Beyond 4 years and upto 6 Rs. 1,00,000 or
years from the end of relevant more Chief Commissioner or Chief Commissioner or
assessment year. Principal Commissioner or Commissioner.
Up to 6 years from the end of Escaped income
relevant assessment year is of any amount
The above time limit is for issuance of notice and not for service of notice. If the notice is issued
within the above time limit but served to the assessee after the above time limit, shall be a valid notice.
Where an assessment u/s 143(3) or 147 has been made for the relevant
assessment year, no action shall be taken under this section after the expiry of 4 years from the end of relevant
assessment year, unless any income chargeable to tax has escaped assessment by reason of failure on the
part of the assessee –
No order of assessment, reassessment shall be made
u/s 147 after the expiry of 9* months from the in which notice u/s 148 was .
PP-DTL&P
Intimation of summary assessment 143(1)
Issuance of notice for scrutiny 143(2) Must be served within 6 months from the end of the
assessment
Completion of Scrutiny assessment 153(1) Assessment must be completed within 18 months
u/s 143(3) (from A.Y. 2020-21: 12 months) from the end of the
relevant assessment year.
Completion of Best judgment
assessment u/s 144
Issuance of notice for Income 149 Notice must be issued within 6 years (maximum;
escaping assessment u/s 147 6years, in some cases 16 years) from the end of the
relevant assessment year
Completion of Income escaping 153(2) Assessment must be completed within 9 months from
assessment u/s 147
assessment u/s 148 was served.
An order of fresh assessment in pursuance of an order u/s 254, 263 or 264 may be made for setting aside or
canceling an assessment.
U/s 254 Within 91 received by
the Principal Chief Commissioner or Principal Commissioner or Chief Commissioner
or Commissioner
U/s 263 or 264 Within 92 passed by
the Principal Commissioner or Commissioner.
1 Where such order is received on or after 01-04-2020: Within 12 months
2 Where such order is passed on or after 01-04-2020: Within 12 months
An income-tax authority, is empowered (suo moto or on application by assessee) to –
rectify any mistake apparent in an order passed by him; or
amend any intimation issued u/s 143(1) or deemed intimation
amend any intimation issued u/s 200A(1) or 206CB(1).
order sought to be amended was passed.
However, in respect of an application made by the assessee or deductor or collector, the authority shall, within
a period of 6 months from the end of the month in which the application is received by it, pass an order –
TDS/TCS, Returns, Refund & Recovery
making the amendment; or
refusing to allow the claim.
deductor or collector, an opportunity of being heard must be given to the assessee, before passing such order.
On completion of assessment, a demand notice is served for additional demand raised in the assessment.
The assessee should make the payment of amount demanded within 30
detrimental to revenue if the full period of 30 days is allowed, then he may with the previous approval of the
If the payment is not made within 30 days
(or time allowed in the notice), interest shall be payable @ 1% for every month (or part thereof) of the delay
[Section 220(2)]
An assessee in default shall be liable to a penalty of an amount not exceeding the amount of tax in arrears.
[Section 221(1)]
Where any sum is determined to be payable by the assessee or by the deductor or collector u/s 143(1)
or 200A(1) or 206CB(1), the intimation under those sections shall be deemed to be a notice of demand for the
purposes of this section.
APPEALS
superior court of an injustice done by an inferior one”. The party complaining is styled as the “appellant”. The
other party is known as “respondent”. The right to appeal must be given by express enactment and cannot be
implied- Harihar Gir vs CIT [1941] 9 ITR 246 (Pat.).
APPELLATE HIERARCHY
1st Commissioner Assessee only
(Appeals) Telltale
2nd Income Tax Appellate Against the order of Commissioner
Tribunal (ITAT) (Appeals)
Assessee or the
3rd High Court Against the order of ITAT (the case must Commissioner (or
involve substantial question of law) Principal Commissioner)
of Income tax
Final Supreme Court Against the order of High Court
