N.A.D.T.

, Nagpur
APRIL, 2009

AS SESS MENT
PRO CED URE
SEC . 139 o nwar ds
by
Dr Vinay Kumar Singh

1
Additional Director (Faculty),
NATIONAL ACADEMY OF DIRECT
TAXES, NAGPUR
 Introduction to Income-

LAW tax .

Voluntary I.T.I.s
CITIZENS OF
compliance
INDIA I.T.O.s

Asstt/Dep. Cs
Elections C.s I.T. (Appeal) I.T.
ORDERS Addl./Jt.C.s I.T.
LEGISLATURE C.s I.T.
I.T.A.T.
OF INDIA C.C.s I.T.
S.C. / H.C. C.B.D.T.
Interpretation of
intention of legislature M.O.F.

CASE
Intension of legislature STATUTE LAWS

GOAL POLICY LAW ADMINISTRATION

-Collection of revenue for -EQUITY -Standard text -RULES

PUBLIC GOODS -NEUTRALITY -Conveys intention -PROCEDURE
-Redistribution of income -EFFICIENCY of legislature to -CONVENTIONS
-Behaviour modification -PREDICTABILITY Administrators &
-ADEQUACY compliers

2
 PRINCIPLES OF NATURAL Introduction to Income-
tax .
JUSTICE
• Law is made by the
LEGISLAT EXECUTIV
URE E representatives of the citizens
JUDICIA
RY • All public servants work for the
citizens of the country
• Executive has the responsibility
of ensuring compliance of the
Law
• Income tax authorities are
QUASI-JUDICIAL in nature
• While exercising this
responsibility, and while dealing
with citizens, they must follow
the basic principles of natural
justice:
– APPRECIATION OF EVIDENCE
– OPPORTUNITY OF BEING
HEARD
3
– SPEAKING ORDER
LIMITATIONS ON AUTHORITY OF
Introduction to Income-
tax .
EXECUTIVE
• LIMITATION OF POWER
– No action can be taken by an executive that
impinges upon any of the rights of the citizens,
EXECUTIV unless the Law authorizes such action
E
– Action can only be taken by the authority to
whom the power is delegated, ONLY within his
JURISDICTION
– There must be application of mind by that
authority
– Action must be BONA-FIDE & NON-
DISCRIMINATORY (NEUTRALITY)

• LIMITATION OF TIME
– Time limits often defined in the Act for certain
actions
– No action possible once BARRED BY TIME
LIMITATION

• LIMITATION OF INTERPRETATION
4
– Words (& phrases) defined in the statute
 Introduction to Income-
tax .
INCOME-TAX AUTHORITIES
Sec. 116. There shall be the following classes of income-tax
authorities for the purposes of this Act, namely :
(a) the Central Board of Direct Taxes constituted under the Central
Boards of Revenue Act, 1963 (54 of 1963),
(b) Directors-General of Income-tax or Chief Commissioners of
Income-tax,
(c) Directors of Income-tax or Commissioners of Income-tax or
Commissioners of Income-tax (Appeals),
(cc) Additional Directors of Income-tax or Additional Commissioners of
Income-tax or Additional Commissioners of Income-tax (Appeals),
(cca) Joint Directors of Income-tax or Joint Commissioners of Income-
tax,
(d) Deputy Directors of Income-tax or Deputy Commissioners of
Income-tax or Deputy Commissioners of Income-tax (Appeals),
(e) Assistant Directors of Income-tax or Assistant Commissioners of
Income-tax,
(f) Income-tax Officers,
(g) Tax Recovery Officers,
(h) Inspectors of Income-tax.
5
 Introduction to Income-
tax .
INCOME-TAX AUTHORITIES
EXECUTIVE
Sec. 2 (7A)
Sec. 2 (28)

Sec. 2 (25)
Sec. 2 (9A) / 2(9B) / 2(19A)/ 2(19C)
Sec. 2 (1C) / 2(1D) / 2(28C)/ 2(28D)

Sec. 2 (16)
Sec. 2 (15A)

Sec. 2 (12)

Sec. 117 (1)

6
 Introduction to Income-
tax .
ASSESSING OFFICER
Sec. 2 (7A) Assessing Officer means
the Assistant Commissioner or Deputy
Commissioner or Assistant Director or
Deputy Director or the Income-tax
Officer who is vested with the relevant
jurisdiction by virtue of directions or
orders issued under sub-section (1) or
sub-section (2) of section 120 or any
other provision of this Act,
and the Additional Commissioner or
Additional Director or Joint
Commissioner or Joint Director who is
directed under clause (b) of sub-section
(4) of that section to exercise or
perform all or any of the powers and 7
 Introduction to Income-
tax .
ASSESSING OFFICER
Sec. 2 (7A) Assessing Officer
Sec. 120 Jurisdiction of income-tax authorities
(1) Income-tax authorities shall exercise all or any of the
powers and perform all or any of the functions conferred
on, or, as the case may be, assigned to such authorities
by or under this Act in accordance with such directions as
the Board may issue for the exercise of the powers and
performance of the functions by all or any of those
authorities.
Explanation. For the removal of doubts, it is hereby
declared that any income-tax authority, being an
authority higher in rank, may, if so directed by the Board,
exercise the powers and perform the functions of the
income-tax authority lower in rank and any such direction
issued by the Board shall be deemed to be a direction
issued under sub-section (1).
(2) The directions of the Board under sub-section (1) may
8
authorise any other income-tax authority to issue orders
 Introduction to Income-
tax .
ASSESSING OFFICER
Sec. 2 (7A) Assessing Officer
Sec. 120 Jurisdiction of income-tax authorities
4) Without prejudice to the provisions of sub-sections (1) and (2), the
Board may, by general or special order, and subject to such
conditions, restrictions or limitations as may be specified therein,
(a) authorise any Director General or Director to perform such
functions of any other income-tax authority as may be assigned to
him by the Board;
(b) empower the Director General or Chief Commissioner or
Commissioner to issue orders in writing that the powers and
functions conferred on, or as the case may be, assigned to, the
Assessing Officer by or under this Act in respect of any specified
area or persons or classes of persons or incomes or classes of
income or cases or classes of cases, shall be exercised or
performed by an Additional Commissioner or an Additional
Director or a Joint Commissioner or a Joint Director, and, where
any order is made under this clause, references in any other
provision of this Act, or in any rule made thereunder to the
Assessing Officer shall be deemed to be references to such
9
Additional Commissioner or Additional Director or Joint
 Introduction to Income-
tax .
ASSESSMENT OF INCOME
Sec. 2 (24)
RETURN OF INCOME
for the
Sec. 2 (9) Sec. 2 (34)
ASSESSMENT YEAR / PREVIOUS YEAR

Sec. 2 (8)

ASSESSMENT
of ASSESSEE
INCOME

TAX Sec. 2 (7)

Sec. 2 (43)
10
 Introduction to Income-
tax .
ASSESSEE
Sec 2(7) assessee means a person by
whom any tax or any other sum of
money is payable under this Act, and
includes
(a) every person in respect of whom any
proceeding under this Act has been
taken for the assessment of his
income or assessment of fringe
benefits or of the income of any other
person in respect of which he is
assessable, or of the loss sustained
Not necessary to have by him or by such other person, or of
actual proceedings the amount of refund due to him or to
inititiated and pending such other person ;
for being considered a
assessee (b) every person who is deemed to be
ITO vs. DDA [200] 252 an assessee under any provision of
ITR 772 (SC) this Act ; 11
 Introduction to Income-
tax .
PERSON
Sec(31) person includes
(i) an individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of
individuals, whether incorporated or
not,
(vi) a local authority, and
(vii) every artificial juridical person, not
falling within any of the preceding sub-
clauses.
Explanation. For the purposes of this clause, an
association of persons or a body of
individuals or a local authority or an
artificial juridical person shall be deemed to
be a person, whether or not such person 12 or
 Introduction to Income-
tax .
PREVIOUS YEAR / ASSESSMENT YEAR
Sec 2 (34) Sec 3

Sec 3 Previous year

defined.
3. For the purposes of this Act,
previous year means the
financial year immediately
preceding the assessment
year :
Provided that, in the case of a
business or profession
newly set up, or a source of
income newly coming into
Sec 2 (9) assessment year existence, in the said
means the period of twelve financial year, the previous
months commencing on the 1st year shall be the period
day of April every year ; beginning with the date of
setting up of the business
or profession or, as the 13
 Introduction to Income-
tax .
PREVIOUS YEAR / ASSESSMENT YEAR

Financial Act Part 1 , First

schedule of Finance
Act

Sec 4 Charge of income-tax.

(1) Where any Central Act enacts that income-tax shall be
charged for any assessment year at any rate or rates,
income-tax at that rate or those rates shall be charged
for that year in accordance with, and subject to the
provisions (including provisions for the levy of additional
income-tax) of, this Act in respect of the total income of
the previous year of every person :
e.g..
Sec 158B, Provided that where by virtue of any provision of this Act
Sec 174(1) income-tax is to be charged in respect of the income of
a period other than the previous year, income-tax shall
be charged accordingly.
(2) In respect of income chargeable under sub-section (1), 14
income-tax shall be deducted at the source or paid in
 Introduction to Income-
tax .
INCOME
Sec 2 (24)

SALARIES Sec 17
HOUSE Sec 22
PROPERTY Sec 28
HEADS OF BUSINESS OR
INCOME PROFESSION
CAPITAL GAINS Sec 45
Sec 14 OTHER Sec 56
SSOURCES
15
 Introduction to Income-
tax .
INCOME
Rs. Rs.
OPENING STOCK 100 SALE RECEIPTS 300
PURCHASES 200 CLOSING STOCK 200
ELECTRICITY 100
GROSS PROFIT 100
------ ------
500 500
------ ------

SALARIES GROSS PROFIT 100

30 INTEREST ON LATE PAYMENTS
RENT 20 10
TRAVELLING 10
OFFICE EXPENSES
10
NET PROFIT 40 -------
------ 110
110
Net profit as per accounting / books may be different from the ‘profit & gains’ referred
in IT Act as certain expenses clamed may not be allowable as deduction.
16
 Introduction to Income-
tax .
RETURN OF INCOME
Return of income

Section 139 (1) Every person, if his total income or the total income of
any other person in respect of which he is assessable under this Act
during the previous year exceeded the maximum amount which is not
chargeable to income-tax, shall, on or before the due date, furnish a
return of his income or the income of such other person during the
previous year, in the prescribed form and verified in the prescribed
manner and setting forth such other particulars as may be prescribed.

Rule 12 - Return of income

and Return of Fringe benefits

ITR - 1 TO 8

17
 Introduction to Income-
tax .
ASESSMENT
Sec 139 (1)

Sec 2 (8)
18
 Introduction to Income-
tax .
ASESSMENT
Sec 2 (8) assessment includes reassessment
;
Sec (40) regular assessment means the assessment made
under subsection (3) of section 143 or section 144 ;

Sec 143 (3)

(3) On the day specified in the notice -

(i) issued under clause (i) of sub-section (2), or as soon

afterwards as may be, after hearing such evidence and after
taking into account such particulars as the assessee may
produce, the Assessing Officer shall, by an order in writing,
allow or reject the claim or claims specified in such notice and
make an assessment determining the total income or loss
accordingly, and determine the sum payable by the assessee
on the basis of such assessment. ................
19
 Introduction to Income-
tax .
ASESSMENT
Sec 2 (8) assessment includes reassessment
;
144. Best judgment assessment

 Sec 144 (1) If any person-

(a) fails to make the return required under sub-section (1) of
section 139 and has not made a return or a revised return under
subsection (4) or sub-section (5) of that section, or
(b) fails to comply with all the terms of a notice issued under
subsection (1) of section 142 or fails to comply with a direction
issued under sub-section (2A) of that section, or
(c) having made a return, fails to comply with all the terms of a
notice issued under sub-section (2) of section 143,
The Assessing Officer, after taking into account all relevant
material which the Assessing Officer has gathered, shall, after
giving the assessee an opportunity of being heard, make the
assessment of the total income or loss to the best of his
judgment and determine the sum payable by the assessee on
the basis of such assessment: 20
 Introduction to Income-
tax .
ASESSMENT
Sec 2 (8) assessment includes reassessment
;
Income escaping assessment

Sec 147. If the Assessing Officer has reason to believe that

any income chargeable to tax has escaped assessment for any
assessment year, he may, subject to the provisions of sections
148 to 153, assess or reassess such income and also any
other income chargeable to tax which has escaped
assessment and which comes to his notice subsequently in the
course of the proceedings under this section, or recompute the
loss or the depreciation allowance or any other allowance, as
the case may be, for the assessment year concerned
(hereafter in this section and in sections 148 to 153 referred to
as the relevant assessment year): …………..

21
 Introduction to Income-
tax .
ASESSMENT
Sec 2 (8) assessment includes reassessment
;

Self-assessment
 
Sec 140A (1) Where any tax is payable on the basis of any
return required to be furnished under section 139 or section
142 or, as the case may be, section 148, after taking into
account the amount of tax, if any, already paid under any
provision of this Act, the assessee shall be liable to pay such
tax together with interest payable under any provision of this
Act for any delay in furnishing the return or any default or
delay in payment of advance tax, before furnishing the return
and the return shall be accompanied by proof of payment of
such tax and interest.

22
 Introduction to Income-
tax .
ASESSMENT
Sec 2 (8) assessment includes reassessment
;
Processing of Return

Sec 143(1) Where a return has been made under section 139,
or in response to a notice under sub-section (1) of section 142,
such return shall be processed in the following manner
namely :-
•The total income or loss shall be computed after making the
following adjustments namely:-
(i) any arithmetical error in the return; or
(ii) an incorrect claim, if such incorrect claim is
apparent from any information in the return;
…………………

(d) An intimation shall be prepared or generated and sent to

the assessee…
(e) The amount of refund due to the assessee ….. shall be 23
 Introduction to Income-tax .

ASESSMENT
RETURN OF INCOME SELF
for the ASSESSM
ASSESSMENT YEAR / PREVIOUS YEAR
ENT
PROCESSING OF RETURN

Sec 2 (29)
LEGAL
Sec 2 (29)
BOOKS REPRESENTATI
OF VE
ACCOUNT
S
DOCUMEN ASSESSEE
TS AUTHORISED
Sec 2 (22AA) REPRESENTATI
VE
Sec 288 (2)
ASSESSMENT of INCOME

REASSESSMENT of INCOME

TAX
24
 Introduction to Income-
tax .
ASESSMENT
Sec 2 (29) legal representative has the meaning
assigned to it in clause (11) of section 2 of the Code of Civil
Procedure, 1908 (5 of 1908)
Code of Civil Procedure, 1908
Sec 2 (11) "legal representative" means a person who in law
represents the estate of a deceased person, and includes
any person who intermeddles with the estate of the deceased
and where a party sues or is sued in a representative
character the person on whom the estate devolves on the
Secdeath of the
2(12A) partyor
books sobooks
suing or
of sued;
account includes ledgers, day-
books, cash books, account-books and other books, whether kept
in the written form or as print-outs of data stored in a floppy,
disc, tape or any other form of electro-magnetic data storage
device;

Sec 2 (22AA) document includes an electronic record as

defined in clause (t)3 of sub-section (1) of section 2 of the
Information Technology Act, 2000 (21 of 2000); 25
 Introduction to Income-
tax .
AUTHORISED REPRESENTATIVE
Sec 288. (1) Any assessee who is entitled or required to attend
before any income-tax authority or the Appellate Tribunal in
connection with any proceeding under this Act otherwise than
when required under section 131 to attend personally for
examination on oath or affirmation, may, subject to the other
provisions of this section, attend by an authorised
representative.
 (2) For the purposes of this section, "authorised
representative" means a person authorised by the assessee in
writing to appear on his behalf, being-
(i) a person related to the assessee in any manner, or a person
regularly employed by the assessee; or
(ii) any officer of a scheduled bank with which the assessee
maintains a current account or has other regular dealings; or
Explanation.-In this section, "accountant" means a chartered accountant
(iii) any legal practitioner who is entitled to practise in any civil
within the meaning of the Chartered Accountants Act, 1949 (38 of 1949),
court in India; or
and includes, in relation to any State, any person who by virtue of the
(iv) an accountant; or
provisions of sub-section (2) of section 226 of the Companies Act, 1956 (1 of
1956), is entitled to be appointed to act as an auditor of companies
registered in that State.
Chartered Accountants Act, 194926
Section 2(1)(b) "chartered accountant" means a person who is a member
 Introduction to Income-
tax .
AUTHORISED REPRESENTATIVE
Sec 288. (2) For the purposes of this section, "authorised
representative" means..

(v) any person who has passed any accountancy examination

recognised in this behalf by the Board-,' or
(vi) any person who has acquired such educational qualifications
as the Board may prescribe for this purpose; or
(via)any person who, before the coming into force of this Act in
the Union territory of Dadra and Nagar Haveli, Goa, Daman
and Diu, or Pondicherry, attended before an income-tax
authority in the said territory on behalf of any assessee
otherwise than in the capacity of an employee or relative of
that assessee; or]
(vii) any other person who, immediately before the
commencement of this Act, was an income-tax practitioner
within the meaning of clause (iv) of sub-section (2) of section
61 of the Indian Income-tax Act, 1922 (11 of 1922), and was
actually practising as such.
27
 
 Introduction to Income-
tax .
TAX

28
 Introduction to Income-
tax .
TAX

29
 Introduction to Income-
tax .
TAX

30
 Introduction to Income-
tax .
TAX
XYZ
T.D.S.

PAYMEN
TS

ASSESSEE
ADVANCE
TAX

SELF SELF
ASSESSME ASSESSMENT
TAX
NT [+
INTEREST
]
TAX DEMAND

ASSESSING
ASSESSME
OFFICER
NT 31
 Introduction to Income-
tax .
AGRICULTURAL INCOME
CONDITIONS : (i) Person to whom Para A of Part I applies : Individual, HUF, AOP,
BOI, AJP (ii) Total income > the max non-taxable income (iii) Agri income > Rs
5000
COMPUTE AGRI INCOME FROM EACH INCOME PARTIALLY AGRICULTURE,
SOURCE SEPERATELY PARTIALLY BUSINESS

+
+
+
DEEMED AGRI INCOME – SHARE IN
AOP [R-5]
+ +

ANY LOSS MAY BE ADJUSTED AGAINST

OTHER AGRI INCOME EXCEPT THE LOSS
- ARISING FROM SHARE OF AOP

SUM OF AGRICULTURAL INCOME FROM NET

IF IT IS A LOSS, DEEMED
- ALL SOURCES
UNABSORBED AGRI LOSS OF A PY OF
EARLIER (8) AY
AGRI
INCO Carried
TO BE NIL

ME forward 32
 Introduction to Income-
tax .
ASESSMENT

TOTAL INCOME
Sec 2 (45)

33
 Introduction to Income-
tax .
TOTAL INCOME
Sec 2(45) total income means the total amount of income
referred to in section 5, computed in the manner laid down in
this Act
Sec 5 (1) Subject to the provisions of this Act, the total income
of any previous year of a person who is a resident includes all
income from whatever source derived which
 (a) is received or is deemed to be received in India in such year
by or on behalf of such person ; or
 (b) accrues or arises or is deemed to accrue or arise to him in
India during such year ; or
 (c) accrues or arises to him outside India during such year :
Provided that, in the case of a person not ordinarily resident in
India within the meaning of sub-section (6) of section 6, the
income which accrues or arises to him outside India shall not be
so included unless it is derived from a business controlled in or a
profession set up in India.
34
 
 Introduction to Income-
tax .
TOTAL INCOME
Sec 2(45) total income means the total amount of income
referred to in section 5, computed in the manner laid down in
this Act
Sec 5 (2) Subject to the provisions of this Act, the total income
of any previous year of a person who is a non-resident includes all
income from whatever source derived which
 (a) is received or is deemed to be received in India in such year
by or on behalf of such person ; or
 (b) accrues or arises or is deemed to accrue or arise to him in
India during such year.
 Explanation 1. Income accruing or arising outside India shall not
be deemed to be received in India within the meaning of this
section by reason only of the fact that it is taken into account in a
balance sheet prepared in India.
 Explanation 2. For the removal of doubts, it is hereby declared
that income which has been included in the total income of a
person on the basis that it has accrued or arisen or is deemed to
have accrued or arisen to him shall not again be so included on35
 Introduction to Income-
tax .
GROSS TOTAL INCOME
CHAPTER VI A DEDUCTIONS IN RESPECT OF
CERTAIN INCOME
Sec 80B In this chapter -
(5) "gross total income" means the total income
computed in accordance with the provisions of this Act,
before making any deduction under this Chapter

-
GROSS TOTAL DEDUCTIONS
INCOME UNDER
CHAPTER VI A
= TOTAL INCOME

36
 Introduction to Income-
tax .
TOTAL INCOME
SALARY + INCOME OF OTHER
+ PERSONS
INCLUDED IN
HOUSE PROPERTY TOTAL INCOME
+ (CHAPTER V)
+ for
BUSINESS & PROF adjustment of
INCOME ON WHICH
+ NO INCOME-TAX IS losses,
OTHER SOURCES PAYABLE UNDER CHAPTER VI
+ +
CHAPTER VII

LTCG CASH CREDITS,

+ +
UNEXPLAINED
INVESTMENTS,
STCG EXPENDITURE ETC.
(Sec
68,69A,69B,69C,69D)

-
DEDUCTIONS
GROSS TOTAL
INCOME
UNDER
CHAPTER VI A
= TOTAL INCOME

37
 Introduction to Income-
tax .
RESIDENT

Sec 2 (42) resident means a person who is resident in

India within the meaning of section 6

Sec 2 (30) non-resident means a person who is not a

resident , and for the purposes of sections 92, 93 and
168, includes a person who is not ordinarily resident
within the meaning of clause (6) of section 6 ;

38
 Introduction to Income-
tax .
RESIDENT
10 9 8 7 6 5 4 3 2 1
1998-

2004-

2005-

2007-
2000-

2001-

2002-

2003-

2006-
1999-
00

01

03

05
99

02

04

06

07

08
2008-09

≥ 182
DAYS

≥ 60
≥ 365 DAYS DAYS

NON-RESIDENT IN ≥ 9 YEARS

≤ 729 DAYS

39
 Assessment Procedure
.
ASSESSMENT PROCEDURE

• CHAPTER XIV
of INCOME TAX ACT FORMS
NOTIFICATIONS
1961 CIRCULARS

• PART III
• ASSESSMENT of INCOME TAX RULES
PROCEDURE 1962

• ASSESSMENT
• Sec 139 to 158 PROCEDURE
CASE LAWS • Rule 12 to 15

40
 Assessment Procedure
.
RETURN OF INCOME
Sec 139 (1) Every person,
• being a company or a firm; or
(b) being a person other than a company or a firm, if his
total income or the total income of any other person
in respect of which he is assessable under this Act
during the previous year exceeded the maximum
amount which is not chargeable to income-tax, shall, on
or before the due date, furnish a return of his
income or the income of such other person during the
previous year, in the prescribed form and verified in
the prescribed manner and setting forth such
other particulars as may be prescribed :

Sec 2 (33) prescribed means prescribed by rules made under this Act ;

41
 Assessment Procedure
.
prescribed form
RETURN OF INCOME
Rule 12. (1) The return of income required to be furnished
under sub-section (1) or sub-section (3) or sub-section (4A) or
sub-section (4B) or sub-section (4C) or sub-section (4D) of
section 139 or clause (i) of sub-section (1) of section 142 or
sub-section (1) of section 148 or section 153A or the return of
fringe benefits required to be furnished under sub-section (1) or
sub-section (2) of section 115WD relating to the assessment
year commencing on the 1st day of April, 2008 shall,
(a) in the case of a person being an individual where the total
income includes income chargeable to income-tax under the
head Salaries or income in the nature of family pension as
defined in the Explanation to clause (iia) of section 57 but does
not include any other income except income by way of
interest chargeable to income-tax under the head Income from
other sources, be in Form No. ITR-1 and be verified in the
manner indicated therein;
(b) in the case of a person being an individual not being an
individual to whom clause (a) applies or a Hindu 42
undivided family where the total income does not include
 Assessment Procedure
.
prescribed form
RETURN OF INCOME
A snapshot from https://incometaxindiaefiling.gov.in/portal/individual_huf.do

43
 Assessment Procedure
.
prescribed form
RETURN OF INCOME
A snapshot from ITR-1

RULE 12 (1) (a) “...............................verified in the manner indicated therein”

44
 Assessment Procedure
.
RETURN OF INCOME
Sec 139 (1) Every person,
(b) being a company or a firm; or
or the
(b) being a person other than a company or a firm, if his total income
total income of any other person in respect of which he
is assessable under this Act during the previous year exceeded
the maximum amount which is not chargeable to income-tax, shall, on or before
the due date, furnish a return of his income or the income of such other
person during the previous year, in the prescribed form and verified in the
prescribed manner and setting forth such other particulars as may be
Sec 2(7) assessee
prescribed : means a person by whom any tax or any other sum of money is
payable under this Act, and includes
(b) every person who is deemed to be an assessee under any provision of this Act

CHAPTER XV LIABILITY IN SPECIAL CASES

Sec 159 – LEGAL REPRESENTATIVE (a)Agent of a non-resident

Sec 160 – REPRESENTATIVE ASSESSEE (b) Guardian / Manager of

minor/lunatic/idiot
Sec 163 – AGENT
(c) Court of wards/
Sec 168 – EXECUTOR Administrator General/
Sec 170 – SUCCESSOR Trustee appointed by court
(d) Trustee (trust with 45
 Assessment Procedure
.
RETURN OF INCOME
Sec 139 (1) Every person,
(b) being a company or a firm; or
(b) being a person other than a company or a firm, if his total income or the total
income of any other person in respect of which he is assessable under this Act
during the previous year exceeded the maximum amount which is not
chargeable to income-tax, shall, on or before the due date, furnish
a return of his income or the income of such other person during the
previous year, in the prescribed form and verified in the prescribed
manner and setting forth such other particulars as may be prescribed :
Explanation 2.In this sub-section, due date means,
(b) where the assessee is (i) a company; or (ii) a person (other than a company)
whose accounts are required to be audited under this Act or under any
other law for the time being in force; or (iii) a working partner of a firm whose
accounts are required to be audited under this Act or under any other law for the
time being in force, the 30th day of September of the assessment year;
(substituted by Finance Act 2008, w.e.f. 1.4.2008)
(b) …….
(c) in the case of any other assessee, the 31st day of July of the assessment year
46
 Assessment Procedure
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RETURN OF INCOME
PROVIS
Sec 139 O-1
One by six scheme …
(1)
Who should file; when; PROVIS
……...up to AY 2005-06
how O-2
PROVIS Every co. / firm to file return
O-3
PROVIS Filing of return reqd, if TOTAL INCOME without
Sec 139 O-4 giving effect to Exemptions u/s 10A, 10B, 10BA
or deduction u/ Chap VI A exceeds amount
not chargeable to tax

Provided also that every person, being an individual or a Hindu undivided family or
an association of persons or a body of individuals, whether incorporated or not, or
an artificial juridical person, if his total income or the total income of any other
person in respect of which he is assessable under this Act during the previous year,
without giving effect to the provisions of section 10A or section 10B or
section 10BA or Chapter VI-A exceeded the maximum amount which is not
chargeable to income-tax, shall, on or before the due date, furnish a return of
his income or the income of such other person during the previous year, in the
prescribed form and verified in the prescribed manner and setting forth such other
particulars as may be prescribed.
47
 Assessment Procedure
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RETURN OF INCOME
Scheme of filing of
returns by
salaried
employees
through
Schemeemployer,
for bulk
2004
filing of returns by
(1 Filing of return by salaried employees through employer
salaried
A) employees,2002
(1 E – filing of return Electronic furnishing of returns of
B) income scheme 2007
Return to be filed for carrying forward a LOSS under ‘Profits
(3) & gains from business & profession’ or ‘capital gains’

Sec 80. Notwithstanding anything contained in this Chapter, no loss which

has not been determined in pursuance of a return filed in accordance
with the provisions of sub-section (3) of section 139, shall be carried
forward and set off under sub-section (1) of section 72 or sub-section (2) of
section 73 or sub-section (1) or sub-section (3)] of section 74 or sub-section (3)
of section 74A.

48
 Assessment Procedure
.
RETURN OF INCOME
Scheme of filing of
returns by
salaried
employees
through
Schemeemployer,
for bulk
2004
filing of returns by
(1 Filing of return by salaried employees through employer
salaried
A) employees,2002
(1 E – filing of return Electronic furnishing of returns of
B) income scheme 2007
Return to be filed for carrying forward a LOSS under ‘Profits
(3) C / F LOSS RETURN & gains from business & profession’ or ‘capital gains’

(4) BELATED RETURN Up to one year from the end of relevant AY or assessment

Filing of return reqd, if TOTAL INCOME without giving

(4 CHARITABLE TRUST
effect to Sec 11 & 12 exceeds max amount not taxable
A)
Filing of return reqd, if TOTAL INCOME without giving
(4 POLITICAL PARTY
effect to Sec 13A exceeds max amount not taxable
B)
49
 Assessment Procedure
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RETURN OF INCOME

For certain institutions / associations/trade unions - Filing of

return reqd, if TOTAL INCOME without giving effect to
clause 21 / 22B/ 23A / 23B / 23C of Sec 10 exceeds max
(4 INSTITUTIONS U/S 10 amount not taxable
C)
UNIVERSITY Every University, college or educational institute referred in clause
(4 COLLEGE (ii) or (iii) of Sec 35 (1) not otherwise required to file return – REQD.
D)
On discovery of omission / wrong statement – up to one
(5) REVISED RETURN year from the end of relevant AY or assessment
Information to income exempt, assets, bank account, credit card,
(6) be furnished expenditure, other outgoings s may be PRESCRIBED

(6 Audit report etc Audit return, principal place, branches, partners, members etc
A) If AO considers return defective – opportunity for rectify
(9) DEFECTIVE RETURN
within 15 days / time allowed by AO 50
 Assessment Procedure
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RETURN OF INCOME
Sec 139 (9) Where the Assessing Officer considers that the
return of income furnished by the assessee is defective, he
may intimate the defect to the assessee and give him an
opportunity to rectify the defect within a period of fifteen
days from the date of such intimation or within such
further period which, on an application made in this behalf,
the Assessing Officer may, in his discretion, allow;
and if the defect is not rectified within the said period of
fifteen days or, as the case may be, the further period so
allowed, then, notwithstanding anything contained in any
other provision of this Act, the return shall be treated as
an invalid return and the provisions of this Act shall apply
as if the assessee had failed to furnish the return :
Provided that where the assessee rectifies the defect after the
expiry of the said period of fifteen days or the further period
allowed, but before the assessment is made, the Assessing
Officer may condone the delay and treat the return as a valid 51
return.
 Assessment Procedure
.
RETURN OF INCOME
Sec139(9) Explanation. For the purposes of this sub-section,
a return of income shall be regarded as defective
unless all the following conditions are fulfilled, namely :
(a) the annexures, statements and columns in the return
of income relating to computation of income chargeable
under each head of income, computation of gross total
income and total income have been duly filled in;
(b) the return is accompanied by a statement showing the
computation of the tax payable on the basis of the
return;
(bb) the return is accompanied by the report of the audit
referred to in section 44AB, or, where the report has been
furnished prior to the furnishing of the return, by a copy of
such report together with proof of furnishing the report;

52
 Assessment Procedure
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RETURN OF INCOME
Sec139(9) Explanation. For the purposes of this sub-section,
a return of income shall be regarded as defective
unless all the following conditions are fulfilled, namely :
(c) the return is accompanied by proof of
(i) the tax, if any, claimed to have been deducted or collected
at source and the advance tax and tax on self-
assessment, if any, claimed to have been paid
Provided that where the return is not accompanied by proof
of the tax, if any, claimed to have been deducted or collected
at source, the return of income shall not be regarded as
defective if
(a) a certificate for tax deducted or collected was not
furnished under section 203 or section 206C to the person
furnishing his return of income;
(b) such certificate is produced within a period of two years
specified under sub-section (14) of section 155;
(ii) the amount of compulsory deposit, if any, claimed to have 53
 Assessment Procedure
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RETURN OF INCOME
Sec139(9) Explanation. For the purposes of this sub-section,
a return of income shall be regarded as defective
unless all the following conditions are fulfilled, namely
:
(d) where regular books of account are maintained by the
assessee, the return is accompanied by copies of
• manufacturing account, trading account, profit and
loss account or, as the case may be, income and
expenditure account or any other similar account and
balance sheet;
(ii) in the case of a proprietary business or profession, the
personal account of the proprietor; in the case of a firm,
association of persons or body of individuals, personal
accounts of the partners or members; and in the case of a
partner or member of a firm, association of persons or
body of individuals, also his personal account in the firm,
association of persons or body of individuals;
54
 Assessment Procedure
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RETURN OF INCOME
Sec139(9) Explanation. For the purposes of this sub-section,
a return of income shall be regarded as defective
unless all the following conditions are fulfilled, namely
:
(e) where the accounts of the assessee have been
audited, the return is accompanied by copies of the
audited profit and loss account and balance sheet and
the auditors report and, where an audit of cost
accounts of the assessee has been conducted, under
section 233B of the Companies Act, 1956 (1 of 1956), also
the report under that section;
(f) where regular books of account are not maintained by
the assessee, the return is accompanied by a statement
indicating the amounts of turnover or, as the case
may be, gross receipts, gross profit, expenses and net
profit of the business or profession and the basis on
which such amounts have been computed, and also 55
disclosing the amounts of total sundry debtors, sundry