Assessment means
checking, judging or in simple words computing the income and tax on it.
In the Income Tax Act there are four types of Assessment:
1. Self assessment u/s 140A
2. Scrutiny assessment u/s 143(3)
3. Best judgment assessment u/s 144
4. Income escaping assessment u/s 147
Self Assessment u/s
140A
After the end of the financial year every person who is required to
file income tax return, should file his return of income. Thus, an
assessee himself files his return of income, and pay tax as per the
return of income filed. This process of self-calculation of income and
tax is called self-assessment. Since the tax and income under return of
income is calculated by assessee himself therefore, it is called
self-assessment. The Assessing Officer (AO) only checks the return of
income on the face of it and corrects the mistake, if any on it. If
there is any short of tax he call for it and if there is any excess of
tax paid he shall refund the same.
Scrutiny Assessment U/S 143(3)
On the basis of return of income filed, Assessing Officer may
undertake examination of some return of income roughly 2% to 3% of the
total returns filed. In scrutiny assessment the AO calls the assessee to
furnish the explanations and books of accounts. For undertaking the
scrutiny assessment the AO has to issue a notice to the assessee under
section 143(2). If Assessee produces the information and explanations
required by the Assessing Officer (AO) the AO completes the assessment
and determine the Taxable income and income tax liability on the basis
of the information and explanations produced before him.
Best Judgment Assessment U/S 144
Best Judgment Assessment, as the name indicates Best Judgment
Assessment means the computation of income and tax is undertaken by the
Assessing Officer himself, on the basis of the best of his judgment. The
Best judgment Assessment can be made by an Assessing Officer under the
following cases:
1. Assessee does not file his regular return of income u/s 139
2. Assessee does not comply with instructions u/s 142 (1), i.e., notice requiring to file his return of income or 142 (2A), i.e., notice requiring assessee to conduct audit of his accounts.
3. Assessee does not comply with instructions u/s 143(2), i.e., notice of scrutiny assessment.
4. AO is not satisfied regarding completeness of accounts.
Since in all of the above cases either assess does not cooperate with
the Assessing Officer (AO) or does not file return of income or does not
have complete accounts. Thus, the assessing officer cannot calculate the
income and therefore, he has to judge the income on the basis of his
best
assumptions/judgments. The AO must give a hearing to the assessee before
completing the assessment as per best of his judgment. No refund can be
granted under best judgment assessment.
Income Escaping Assessment U/S 147
If the Assessing Officer believes that the income of assessee of any
Previous Year has escaped assessment, the AO can reopen the assessment
and complete it as per new information about income or tax. Assessment
up to last 6 years can be opened. In order to open an income escaping
assessment AO has to issue notice u/s 148 to the assessee.
To know more details and avails service please e-mail to contact@businesswonder.com.