Scrutiny Assessment u|s 143 (3) of Income Tax Act, 1961 | AY 2019-20 | Taxpundit

Every taxpayer has to furnish the details of his income to the Income-tax Department. These details are to be furnished by filing his return of income. Once the return of income is filed by the taxpayer, the next step is the processing of the return of income by the Income-tax Department. The Income-tax Department examines the return of income for confirming its correctness. The process of examining the return of income by the Income-tax Department is called “Assessment”. Assessment also includes re-assessment or best judgment assessment under section 144​.​

Under the Income-tax Law, there are four major assessments as given below:

1. section 143(1), i.e., Summary assessment without calling the assessee i.e. taxpayer.
2. Assessment under section 143(3), i.e., Scrutiny assessment.
3. Assessment under section 144, i.e., Best judgment assessment.
4. Assessment under section 147​, i.e., Income escaping assessment.​

Meaning of Scrutiny Assessment :

​​Assessment u/s 143(3) is a detailed assessment and is referred to as scrutiny assessment. At this stage, a detailed scrutiny of the return of income will be carried out. The scrutiny is carried out to confirm the correctness and genuineness of various claims, deductions, etc., made by the taxpayer in the return of income.

Scope of Assessment u/s 143(3) :

The objective of scrutiny assessment is to confirm that the taxpayer has not understated the income or has not computed excessive loss or has not underpaid the tax in any manner.

To confirm the above, the Assessing Officer carries out a detailed scrutiny of the return of income and will satisfy himself regarding various claims, deductions, etc., made by the taxpayer in the return of income.

Procedure of Scrutiny Assessment :

In case of Assessment under section 143(3), a scrutiny is carried out to confirm the correctness and genuineness of various claims, deductions, etc., made by the taxpayer in the return of income. The other procedures in this regard are as follows:

1. If the Assessing Officer or prescribed i​ncome tax authority considers it necessary or expedient to ensure that the taxpayer has not understated the income or has not computed excessive loss or has not underpaid the tax in any manner, then he will serve on the taxpayer a notice requiring him to attend his office or to produce or cause to be produced any evidence on which the taxpayer may rely on in support of the return.

2. The provisions of notice are governed by section 143(2). In other words, to carry out assessment under section 143(3), the Assessing Officer should serve a notice under section 143(2)​.

3. Notice under section 143(2)​ shall be served on the taxpayer within a period of six months from the end of the financial year in which the return is filed.

4. The taxpayer or his representative (as the case may be) will appear before the Assessing Officer and will place his arguments, supporting, etc., on various matters/issues as required by the Assessing Officer.

5. After hearing/verifying such evidence and taking into account such particulars as the taxpayer may produce and such other evidence as the Assessing Officer may require on specified points and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the taxpayer and determine the sum payable by him or refund of any amount due to him on the basis of such assessment.​

Time Limit for making Assessment u/s 143(3) :

As per section 153, the time limit for making assessment under section 143(3) is:-

1. Within 21 months from the end of the assessment year in which the income was first assessable. [For assessment year 2017-18 or before]

2. 18 months from the end of the assessment year in which the income was first assessable. [for assessment year 2018-19]

3. 12 months from the end of the assessment year in which the income was first assessable [Assessment year 2019-20 and onwards]

Note: If reference is made to TPO, the period available for assessment shall be extended by 12 months

Visit our website : www.taxpundit.org
GST Case Laws : gst.taxpundit.org

Follow us on Twitter : @Taxpundit1
Follow us on Facebook : /taxpundit.org

Like, Share this video and subscribe to our channel. Thanks for watching.

scrutiny assessment,assessment 143 3,assessment order 143 3,income tax assessment order 143 3,scrutiny assessment u s 143 3,due date for completion of assessment u s 143 3,time limit for assessment u s 143 3,notice u s 143 2,format of reply to notice u s 143 2,reply to income tax notice u s 143 2 limited scrutiny,reply to income tax notice u s 143 2 complete scrutiny,complete scrutiny,limited scrutiny,notice u s 143 2 time limit,income tax,income tax india,