Section 143(3) Scrutiny Assessment

Income tax assessment is the process of verification of the knowledge a taxpayer has provided within the returns submitted by a taxpayer to the tax department. An assessment is dispensed by the tax department after the filing of a tax return by an assessee.

The aim of conducting the assessment is for the tax department to verify the return filed for correctness with reference to the quantity of taxable income declared and tax paid. There are various styles of revenue enhancement assessment. During this article, we briefly discuss the concept of a scrutiny assessment under Section 143(3). you’ll be able to find out about the revenue enhancement notice under Section 143(1) here.

Section 143(3) Scrutiny Assessment

Scrutiny Assessment

Scrutiny assessment under Section 143(3) may be a detailed assessment of a tax return filed by a taxpayer. In an exceeding scrutiny assessment, a tax officer would perform various tests and processes to substantiate the correctness and genuineness of assorted claims, deductions, and so on, made by the taxpayer within the revenue enhancement return. The target of a 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.

Scrutiny assessment under Section 143(2) would be applicable for the subsequent scenarios:

A taxation return has been filed under Section 139 or in response to a revenue enhancement notice under Section 142(1).

The Assessing Officer or taxation Authority deems it necessary or expedient to confirm that the taxpayer has not understated the income or has not computed excessive loss or has not under-paid revenue enhancement in any manner.

Income Tax Notice u/s 143(2)

To initiate a scrutiny assessment, the concerned taxation officer must first issue a tax notice under Section 143(2). Within the revenue enhancement notice under Section 143(2), the Assessing Officer would request the taxpayer to appear face to face or complete the method through e-Assessment and/or produce information and papers which the tax officer ascertains to be significant for specifying the taxable income and tax payable. A taxation notice under Section 143(2) should be served within a period of six months from the tip of the yr within which the return is filed. For instance, if a revenue enhancement return is filed on 2nd November 2018, notice under Section 143(2) may be served on the assessee up to September 30, 2019. If the notice is issued on 29th September 2019 and is received by the assessee after 30th September 2019, it’s not a legitimate notice.

The taxpayer or his/her authorized representative can appear before the Assessing Officer and can place his arguments, supporting evidence, and so on, on various matters/issues PRN by the Assessing Officer.

Section 143(3) Scrutiny Assessment

Scrutiny Assessment Hearing

While conducting a scrutiny assessment, the concerned tax officer will provide ample opportunity for the assessment to be heard and to provide documents or evidence to support the knowledge filed in an exceedingly accurate instrument. Just in case of failure to supply information or non-cooperation by the taxpayer, the tax officer is empowered to finish the most effective judgment assessment under section 144.

In case of co-operation of the taxpayer and submission of knowledge, after hearing/verifying such evidence and taking under consideration all the knowledge produced by the taxpayer, the Assessing Officer would pass an order. On the passing of the order by the Assessing Officer, the assessee has one amongst the alternatives below:

To accept as true with the order gone along the tax authority and pay any tax demand or receive a refund or accept the loss determined

Can make a revision application to the Commissioner of taxation under section 263/264

Appeal the order

Time Limit for Scrutiny Assessment

As per Section 153, the deadline for creating a scrutiny assessment under section 143(3) is:

Within 21 months from the top of the assessment year within which the income was first assessed. [For the assessment year 2017-18 or before]

18 months from the end of the assessment year within which the income was first assessable. [For the assessment year 2018-19]

12 months from the tip of the assessment year within which the income was first assessable [For the Assessment year 2019-20 and onwards]