Section: 140A

Definition: Self-assessment is when the taxpayer himself determines his tax liability before filing the return of income.

Key Points:

• The assessee determines: Total income, tax payable, interest payable, and any tax already paid
• Payment of tax: Tax and interest must be paid before filing the return
• Self-computed: The taxpayer computes his own liability
• No notice required: This is done voluntarily by the assessee

Process:

1. Calculate total income
2. Compute tax liability
3. Calculate interest under Section 234A, 234B, 234C if applicable
4. Deduct TDS/TCS and advance tax already paid
5. Pay balance tax and interest
6. File return of income

Section: 143(1)

Definition: This is an automated, preliminary assessment done by the Centralized Processing Centre (CPC) to verify the return filed by the assessee.

Key Points:

• Automated process: Done by computer system at CPC
• Time limit: Within 1 year from the end of the financial year in which return is filed
• Adjustments made: Arithmetical errors, incorrect claims, disallowance of losses
• No personal hearing: Purely mechanical verification

Notice under Section 143(1):

Intimation: This is technically an intimation, not a notice. It may show:

• Refund due to assessee
• Demand payable by assessee
• No refund/no demand (nil intimation)

Adjustments Permitted:

1. Arithmetical errors in the return
2. Incorrect claims apparent from information in the return
3. Disallowance of loss claimed if return is filed beyond due date
4. Disallowance of expenditure under Section 40(a)(ia) for non-deduction of TDS
5. Addition based on information in Annual Information Statement (AIS)/Tax Information Statement (TIS)

Section: 143(2) and 143(3)

Definition: Detailed examination of return of income to verify the correctness and completeness of the return.

Notice under Section 143(2):

When issued: When Assessing Officer (AO) wants to conduct detailed scrutiny

Time limit: Must be issued within 3 months from the end of the financial year in which return is filed

Contents: Notice to appear before AO or to produce evidence/documents

Process of Scrutiny Assessment:

1. Notice under Section 143(2) issued to assessee
2. Assessee appears before AO (personally or through authorized representative)
3. AO examines books of accounts, documents, evidence
4. AO may issue further notices for information/documents
5. AO may conduct enquiries, surveys, or investigations
6. Assessee given opportunity of being heard
7. AO passes assessment order under Section 143(3)

Time Limit for Assessment:

• Normal cases: 21 months from the end of the Assessment Year
• Cases with search/requisition: 21 months from end of Financial Year in which last authorization for search/requisition executed
• Cases with income escaping assessment: Extended time limits apply

Powers of Assessing Officer:

• Call for information and documents
• Conduct enquiries
• Summon witnesses
• Conduct survey under Section 133A
• Make additions, disallowances, or modifications to returned income

Section: 144

Definition: When the assessee fails to cooperate in assessment proceedings, the AO can make assessment to the best of his judgment.

When Applicable:

• Assessee fails to file return despite notice under Section 142(1)
• Assessee fails to comply with notice under Section 143(2)
• Assessee fails to comply with terms of notice for information/documents
• Assessee fails to get accounts audited as required
• Assessee does not allow AO to verify books and records

Notice Requirements:

Notice under Section 144: Not a separate notice, but AO must give reasonable opportunity of being heard before making best judgment assessment

Basis of Assessment:

• Available material and evidence
• Third-party information
• Past history of assessee
• Industry standards and benchmarks
• Reasonable estimates based on available data

Key Points:

• Not arbitrary: Must be based on some reasonable basis
• Judicial review: Courts can examine if assessment is truly based on "best judgment"
• Burden of proof: Shifts to assessee to prove assessment is excessive

Sections: 147, 148, 148A, 149, 150, 151

Definition: When income has escaped assessment (not assessed or under-assessed), the AO can reopen the case and reassess.

Grounds for Reassessment (Section 147):

• Income has escaped assessment
• Income has been under-assessed
• Excessive loss/depreciation/relief has been allowed
• Excessive refund has been granted

Notice under Section 148:

When issued: When AO has reason to believe that income has escaped assessment

Contents: Notice requiring assessee to file return of income

Show Cause Notice (Section 148A): Before issuing Section 148 notice (for assessments from AY 2021-22 onwards), AO must issue show cause notice under Section 148A(b) and consider assessee's reply

Time Limits for Reassessment (Section 149):

• Within 3 years: If escaped income is less than Rs. 50 lakhs (from AY 2021-22)
• Within 10 years: If escaped income is Rs. 50 lakhs or more (from AY 2021-22)
• Special cases: Different time limits for search cases, foreign assets, etc.

Procedure:

1. AO records reasons for believing income has escaped assessment
2. Approval obtained from superior authorities (if required)
3. Show cause notice issued under Section 148A(b) (from AY 2021-22)
4. Assessee's reply considered
5. Order passed under Section 148A(d) disposing of objections
6. Notice under Section 148 issued
7. Assessee files return in response
8. Assessment proceedings conducted
9. Reassessment order passed under Section 147 read with 143(3) or 144

Relevant Sections: 143(3), 144, 147

Definition: Assessment made to protect the interests of revenue when there is uncertainty about who is liable to pay tax on a particular income.

When Made:

• Doubt about ownership of income: When same income may belong to different persons
• Competing claims: Multiple persons claiming the same deduction/exemption
• Transfer of assets: When it's unclear if transfer is genuine
• Protective measure: To ensure revenue is not lost due to limitation

Key Features:

• Precautionary: Made as a protective measure
• Alternative to regular assessment: If regular assessment becomes final, protective assessment becomes void
• No double taxation: Only one assessment will ultimately be enforced
• Clear mention: Order should clearly state it is protective in nature

No Specific Notice:

Protective assessment is made through regular assessment procedures using notices under Section 143(2), 144, or 148 as applicable