Sec. 140(A) Self Assessment
This section is applicable if a return is submitted u/s 139/142/148/158BC. This section provides for assessment by assessee himself. It requires that :
The assessee shall work out his taxable income;
� He shall compute his tax liability;
� He shall compute his interest liability u/s 234A, 234B and 234C;
� He shall pay amount of tax alongwith interest;
� He shall submit the proof of such payment alongwith return.
Following points should also be noted :
(a) where assessee makes short payment, the payment made under this section shall, first be adjusted towards interest and thereafter towards tax.
(b) if an assessee fails to pay the amount of tax/interest/both (partly or fully) he shall be deemed to be an assessee in default. It will attract penalty.
Sec. 142 Inquiry before Assessment :
142(1) - Notice :
� To furnish the return, when no return has been made within time allowed u/s 139(1)
� To produce or cause to be produce such accounts or documents as may be required (only 3 years books of accounts can be summoned)
� To furnish other information (prior approval of JCIT shall be obtained before requiring the assesse to furnish a statement of all assets and liabilities not included in the accounts).
142(2) – Enquiry :
Make any enquiry necessary for obtaining full information of the income or loss of any person.
142(2A) to 142(2D) – Special Audit :
If the A.O. having regard to the complexity involved in the assessment and interest of revenue feels necessity of audit of the accounts of assessee, he can direct the assessee to get his account audited and to submit audit report. Following special points may also be noted :
(i) This power can be exercised at any stage of assessment thus it is not allowed to exercise this power after completion of assessment.
(ii) The A.O. can exercise power under this section even though the accounts of assessee have already been audited.
(iii) The A.O. has to take prior approval of CCIT/CIT.
(iv) The appointment of auditor shall be made by CCIT/CIT.
(v) The expenses of audit including the remuneration of audit shall be determined by CCIT/CIT but paid by assessee.
(vi) The assessee has to submit audit report within time allowed. The time allowed should not exceed 180 days.
Failure to comply notice u/s 142(1)/142(2A) shall attract :
a) Best judgment assessment u/s 144.
b) Penalty : Sum of Rs. 10,000/- for each such failure [u/s 271(i)(b)]
c) Prosecution.
3. Sec. 143 Intimation Assessment :
It is not an assessment. It is just an initial processing of the return submitted by an assessee. Important points to be considered :
(i) The scheme shall be applicable only if return has been submitted u/s 139 or 142(1);
(ii) The department will not make any adjustment to the income declared in return.
(iii) It is not necessary for the department to issue intimation of assessment in all cases. The intimation shall be issued only if :
a) any sum is payable by the assessee;
b) any sum is refundable to the assessee;
(iv) the intimation of demand/refund shall be sent within 1 year from the end of the financial year in which return is made.
(v) An intimation of demand shall be deemed to be notice of demand u/s 156.
(vi) The assessee can not file an appeal u/s 246A or revision application u/s 264 against the intimation because department is now accepting income declared in return without making any adjustment.
4. Sec. 143(3) Scrutiny Assessment :
Why Scrutiny?
Scrutiny means checking of books of accounts and documents etc. The system of scrutiny is framed to ensure that the assessee has not understated the income or computed excessive loss.
When ?
If assessee has submitted return u/s 139/142(1)
How ?
Service of notice u/s 143(2). The A.O. shall serve a notice requiring the assessee to attend his office or to produce evidence (e.g. books). Such notice can served upon assessee within 12 months from the end of month in which the return is filed.
� Pass order - Sum payable or refundable
� Non compliance of a notice u/s 143(2) attract
(a) Best judgment assessment
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