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Self, Escaping, Best Judgement Assesement and Remedies

The document outlines various types of tax assessments, including self-assessment, escaped income, and best judgement assessment, detailing the conditions under which they are applied and the consequences for non-compliance. It also describes the remedies available to assessees, such as applying for cancellation of assessments and appealing to higher authorities. Penalties for failure to pay taxes and the process for reassessing income that has escaped assessment are also highlighted.

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8 views2 pages

Self, Escaping, Best Judgement Assesement and Remedies

The document outlines various types of tax assessments, including self-assessment, escaped income, and best judgement assessment, detailing the conditions under which they are applied and the consequences for non-compliance. It also describes the remedies available to assessees, such as applying for cancellation of assessments and appealing to higher authorities. Penalties for failure to pay taxes and the process for reassessing income that has escaped assessment are also highlighted.

Uploaded by

sarsunaps
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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TYPES OF ASSESSMENT:

SELF ASSESSMENT: (Sec. 140A)

If any tax is payable on the basis of any return required to be furnished under Sec. 139 or 142 or Sec. 148 or Sec. 153 A,
after taking into account the amount of tax already paid, the assessee shall be liable to pay such tax before furnishing the
return and the receipt of the same should be attached to the return.

After a regular assessment is made under Sec. 148 or 144 tax paid on self assessment shall be deemed to have been paid
towards such regular assessment.

Failure by the assessee to pay tax will result in a penalty at 2% of such tax or part there of, which would be recovered from
him by way of penalty for every month during which the default continues.

Reasonable opportunity of being heard must be given to the assessee before levying penalty.

ESCAPED INCOME (Sec. 147)

The assessing authority generally completes the assessment of a particular year once and for all.

But sometimes due to some mistake or omission on the part of the assessee or revenue authorities, escapement of income
results.

The power to assess and reassess income or recomputed the loss or depreciation allowances is vested with the Assessing
Officer under the following circumstances:

1. The Assessing Officer has reason to believe that income chargeable to tax has escaped assessment.

2. He has reason to believe that such escape is due to the omission or failure on the part of the assessee to make a return
for any assessment year or to disclose truly and fully all material facts necessary for his assessment,

In consequence of information received after the original assessment, the Assessing Officer has reason to believethat
income has escaped assessment for any year.

The following are deemed to be cases where income chargeable to tax has escaped assessment:

1. If income chargeable to tax has been under assessed.

2. If such income has been assessed at low a rate.

3. If such income has been made the subject of excessive relief under the Act of 1961.

4. If excessive loss or depreciation allowance has been computed.

Best Judgement Assessment: (Sec. 144)

The Assessing Officer makes a best judgement assessment in any of the following three cases:

1. When the assessee fails to make the return required by any Notice given under Sec. 139 (1) and has not made a belated
return or a revised return.

2. When an assessee fails to comply with all the terms of a notice issued to him under Sec. 142 (1) or fails to comply with a
requirement of audit under Sec. 142 (2A).
3. When a person who had made a return fails to comply with all the terms of a Notice issued to him under Sec. 143 (2)
(Assessment on the basis of evidence produced)

Here, Assessing Officer takes all relevant material he has gathered and makes the assessment of the total Income or loss to
the best of his judgement. He determines the sum payable by the assessee or refundable to him on the basis of such
assessment.

The assessee affected by the judgement may apply to the Assessing Officer for cancellation of the assessment.
Consequences of best judgement assessment made under Sec. 144:

1. Assessee is liable to a penalty.

2. He is liable to prosecution if the default was failure to file his return required by a notice under Sec. 142 (1).

3. If the assessee is a firm, registration is refused or may be cancelled if it is already registered.

4. If the assessee is a company in which the public are not substantially interested, it would lose ita opportunity for
distribution of further dividend in order to escape the additional income tax.

5. in an appeal against the quantum of assessment, the assessee cannot bring on record any new facts before the appellate
authorities.

REMEDIES OPEN TO THE ASSESSEE:

1. The assessee may apply to the Assessing Officer for cancellation of the assessment.

2. He may also appeal to the Joint Commissioner against the assessment.

3. If his application for cancellation is dismissed by the Assessing Officer, he may go on appeal to the Joint Commissioner
against such order also.

4. The assessee can file an appeal to the Appellate Tribunal against the Joint Commissioner's orders.

5. If any question of law arises out of the Tribunal's. order, reference to the High Court and appeal to the Supreme Court
will also lie.

6. The assessee may seek relief at the hands of the Commissioner of Income Tax. But this remedy will not be available if
appeal is filed to the Tribunal.

7. So, a remedy from a Commissioner be availed of either after expiry of the time limit for filing appeals to the Joint
Commissioner or where appeal to the Joint Commissioner or where appeal to the Joint Commissioner has been filed, after
the appeal is disposed of by the Appellate Assistant Commissioner.

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