ASSESSMENT PROCEDURE & INCOME TAX AUTHORITIES

DUE DATES FOR FILING IT RETURNS

Due Date for Tax Filing

Category of Taxpayer
*(unless extended)
Individual / HUF/ AOP/ BOI
31st July
(books of accounts not required to be audited)
31st September
Businesses (Requiring Audit)
31st October*
Businesses requiring transfer pricing reports
30th November
(in case of international/specified domestic transactions)
Revised return 31st December
Belated/late return 31st December
31 March (2 years from the end
Updated return
of the relevant Assessment Year)

E FILING OF IT RETURNS

The process of electronically filing Income tax returns through the internet is known as e-Filing
or electronic filing of return. This means you no longer need to visit the nearest Income Tax
Department's office to file your returns physically.

Advantages of Electronic Filing of Income Tax

 It will help the entity in reducing the number of errors.

 E Filing will help taxpayers to save their time and money.

 It will help in maintaining accountability on both sides; from the taxpayer, as well as
from the government authority.

 E Filing of ITR (Income Tax Return) is convenient and flexible because it will be no
longer a time-bound task.

 When E-Filing the taxpayer is guaranteed to obtain delivery confirmation, which has
legal validity in case of disputes.
TYPES OF INCOME TAX ASSESSMENTS

Every assessee, who earns income beyond the basic exemption limit in a Financial Year (FY),
must file a statement containing details of his income, deductions, and other related information.
This is called the Income Tax Return (ITR). Once you as a taxpayer file the income returns, the
Income Tax Department will process it. There are occasions where, based on set parameters by
the Central Board of Direct Taxes (CBDT), the return of an assessee gets picked for an
assessment.

1. Self Assessment: The assessee himself determines the income tax payable. The tax
department has made available various forms for filing income tax return. The assessee
consolidates his income from various sources and adjusts the same against losses or deductions
or various exemptions if any, available to him during the year. The total income of the assessee
is then arrived at. The assessee reduces the TDS and Advance Tax from that amount to
determine the tax payable on such income. Tax, if still payable by him, is called self assessment
tax and must be paid by him before he files his return of income. This process is known as Self
Assessment.

2. Summary Assessment: It is a type of assessment carried out without any human intervention.
In this type of assessment, the information submitted by the assessee in his return of income is
cross-checked against the information that the income tax department has access to. In the
process, the reasonableness and correctness of the return are verified by the department. The
return gets processed online, and adjustment for arithmetical errors, incorrect claims, and
disallowances are automatically done.

3. Regular Assessment: The income tax department authorizes the Assessing Officer or Income
Tax authority, not below the rank of an income tax officer, to conduct this assessment. The
purpose is to ensure that the assessee has neither understated his income or overstated any
expense or loss or underpaid any tax. The CBDT has set certain parameters based on which a
taxpayer’s case gets picked for a scrutiny assessment.

a. If an assessee is subject to a scrutiny assessment, the Department will send a notice

well in advance.

b. The assessee will be asked to produce the books of accounts, and other evidence to
validate the income he has stated in his return.

4. Scrutiny Assessment: After submitting an income tax return, an Income Tax Officer may be
assigned by the Income Tax Department to assess the tax filing. The taxpayer is informed of this
through an Income Tax Notice under Section 143(2). The officer may request information,
documents, and books of accounts for scrutiny assessment, which will be thoroughly examined.
The officer then calculates the income tax payable by the taxpayer, and if there is a mismatch
between the income and the tax due, the taxpayer can either pay the extra amount or receive a
refund.

5. Best Judgement Assessment: The assessee fails to comply with the terms as contained in the
notice issued under Summary Assessment After providing an opportunity to hear the assessee’s
argument, the assessing officer passes an order based on all the relevant materials and evidence
available to him. This is known as Best Judgement Assessment.

6. Income Escaping Assessment: When the assessing officer has sufficient reasons to believe
that any taxable income has escaped assessment, he has the authority to assess or reassess the
assessee’s income. The time limit for issuing a notice to reopen an assessment is 4 years from the
end of the relevant assessment Year.

Some scenarios where reassessment gets triggered are given below.

a. The assessee has taxable income but has not yet filed his return.

b. The assessee, after filing the income tax return, is found to have either understated his
income or claimed excess allowances or deductions.

c. The assessee has failed to furnish reports on international transactions, where he is

required to do so.
PAN

A Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the

form of a laminated card, by the Income Tax Department of India. Each set of numbers is
unique to the individual, HUF, company, etc. PAN is an essential financial document that
is necessary for a wide range of financial transactions. Moreover, it is required for filing
income tax returns, TCS or TDS credits, tax payments, and more.

Financial Transactions That Require PAN

The primary objective of making PAN compulsory is to track different transactions that
come with a taxable component. This enables the government to prevent tax evasion and
subsequent revenue loss.

1. Fixed deposit: If you have a fixed deposit with any bank that exceeds Rs. 50,000 or
aggregates to Rs. 5 lakh for a financial year, you will need to provide your PAN. This is
applicable for deposits you make in banks, NBFCs, cooperative banks, and post offices.

2. Immovable property sale or purchase: Any sale or purchase of an immovable

property that is worth more than Rs. 10 lakh will require a PAN. The previous transaction
limit for this was Rs. 5 lakh.

3. Motor vehicle sale or purchase: You will need to provide PAN mandatorily while
you purchase a four-wheeler. If you are selling your four-wheeler, you will also need to
furnish your PAN. However, PAN is not compulsory during the sale or purchase of a
two-wheeler.

4. Opening a bank account: You have to furnish your PAN if you want to open an
account with any private, nationalised or cooperative bank. PAN will act as identification
proof.

5. Transactions through cash cards: If you are making a transaction worth more than
Rs. 50,000 through any prepaid payment instrument such as social benefit cards, gift
cards or remittances cards, you should furnish PAN details.

6. Life insurance premium payments: If the total payment towards your life insurance
policy in a year exceeds Rs. 50,000, it is necessary to provide your PAN details.

7. Payment of hotel bills: PAN is mandatory for any hotel or restaurant bill payment that
exceeds Rs. 50,000 and is paid in cash upfront.

8. Foreign travel expenses: When you make any cash payment for foreign travel
expenses that exceed Rs. 50,000, you have to provide your PAN details. PAN is also
required if you make a purchase of foreign currencies that is worth Rs. 50,000 or more.
 9. Buying jewellery or bullion: The government has also made PAN compulsory for
purchasing gold bullion or jewellery. You have to furnish PAN if you are buying gold
worth Rs. 2 lakh or more through cash or card payment.

10. Making cash deposits: For making a cash deposit of more than Rs. 50,000 in a
single day, you have to mention your PAN details.

11. Purchasing shares: If you are looking to purchase or sell shares of a company that is
not listed on any of the stock exchanges, you will need to provide a PAN.

12. Purchasing mutual funds or bonds: If you make payments exceeding Rs. 50,000 to
buy units of mutual funds, you need to provide PAN details. Similarly, you have to
furnish PAN details while purchasing bonds or debentures worth more than Rs. 50,000.

APPLYING FOR PAN

Documents Required For PAN Card

Below are the documents required to be submitted along with the PAN card application:

 Identity proof

 Address proof

 Date of birth proof

 Registration certificate in case of companies, firms, HUF and association of persons

OPTION 1 - STEPS TO GET INSTANT E-PAN

Step 1: Go to the Income tax portal Instant e-PAN

Step 2: Enter your Aadhaar number and validate it with OTP. You will see your Name, Date of
birth, etc as per Aadhar, after which you can proceed with the submission

Step 3: You will receive confirmation submission of the application via email. Once e-PAN is
alloted you will be intimated on the same. However, kindly note this point provides only a digital
copy of PAN. If you want a Hard copy, you might have to pay additional fees and request for
delivery using Re-Print option
OPTION 2 - How To Apply For PAN Card Offline

Step 1: Download the ‘Form 49A’ from the NSDL e-Gov OR UTIITSL website

Step 2: Fill in the details in the application.

Step 3: Attach your signature and photograph to the application.

Step 4: Submit the form and the required documents to the nearest PAN centre.

Step 5: Pay the fees for PAN card application.

Step 6: You will get the acknowledgement number from which you can track the status of your
PAN card application status.

Once the documents are verified, a PAN card will be issued within 15 days.

INCOME TAX AUTHORITIES

Administrative [ Income Tax Authorities ][ Sec. 116 ]

1. The Central Board of Direct Taxes constituted under the Central Boards of Revenue Act,
1963 (54 of 1963),
2. Directors-General of Income-tax or Chief Commissioners of Income-tax,
3. 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.
4. Deputy Directors of Income-tax or Deputy Commissioners of Income-tax or Deputy
Commissioners of Income-tax (Appeals),
5. Assistant Directors of Income-tax or Assistant Commissioners of Income-tax,
6. Income-tax Officers,
7. Tax Recovery Officers,
8. Inspectors of 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 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 functions conferred on, or assigned to, an Assessing Officer under this Act;

POWERS OF IT AUTHORITIES

1) Power relating to Discovery, Production of evidence, etc: The Assessing Officer, The Joint
Commissioner, the Chief Commissioner or the Commissioner has the powers as are provided in
a court under the code of Civil Procedure, 1908, when trying to suit for the following matters:
(a) discovery and inspection;
(b) to enforce any person for attendance, and examining him on oath
(c) issuing commissions; and
(d) compelling the production of books of account and other document.
2) Power of Search and Seizure: Today it is not hidden from income tax authorities that people
evade tax and keep unaccounted assets. When the prosecution fails to prevent tax evasion, the
department has the to take actions like search and seizure.

3) Requisition of Books of account, etc: Where the Director or the Director-General or

Commissioner or the Chief Commissioner in consequence of information in his possession, has
reason to believe that (a), (b), or (c) as mentioned under section 132(1) and the book of accounts
or other documents or the assets have been taken under custody by any authority or officer under
any other law, then the Chief Commissioner or the Director General or Director or
Commissioner can authorize any Joint Director, Deputy Director, Joint Commissioner, Assistant
Commissioner, Assistant Director, or Income tax Officer to require the authority to provide sue
books of account, assets or any documents to the requisitioning officer, when such officer is of
the opinion that it is no longer necessary to retain the same in his custody.

4) Power to Call for Information: The Commissioner The Assessing Officer or the Joint
Commissioner may for the purpose of this Act:

(a) can call any firm to provide him with a return of the addresses and names of partners
of the firm and their shares;

(b) can ask any Hindu Undivided Family to provide him with return of the addresses and
names of members of the family and the manager;
 (c) can ask any person who is a trustee, guardian or an agent to deliver him with return of
the names of persons for or of whom he is an agent, trustee or guardian and their
addresses;

(d) can ask any person, dealer, agent or broker concerned in the management of stock or
any commodity exchange to provide a statement of the addresses and names of all the
persons to whom the Exchange or he has paid any sum related with the transfer of assets
or the exchange has received any such sum with the particulars of all such payments and
receipts;

5) Power of Survey: The term 'survey' is not defined by the Income Tax Act. According to the
meaning of dictionary 'survey' means casting of eyes or mind over something, inspection of
something, etc. An Income Tax authority can have a survey for the purpose of this Act.

The objectives of conducting Income Tax surveys are:

• To discover new assessees;
• To collect useful information for the purpose of assessment;
• To verify that the assessee who claims not to maintain any books of accounts is in-fact
maintaining the books;
• To check whether the books are maintained, reflect the correct state of affairs.

6) Collection of Information: For the purpose of collection of information which may be useful
for any purpose, the Income tax authority can enter any building or place within the limits of the
area assigned to such authority, or any place or building occupied by any person in respect of
whom he exercises jurisdiction.