Best Judgment Assessment (Sec.

144)
 WHEN DO?

 Fails to make a return u/s 139(1) or not made a revised return

u/s 139(4) & 139(5).
 Fails to comply with notice u/s 142(1) or fails to comply with
direction of A/Cs audited u/s 142(2A).
 After having filed a return, fails to comply with notice u/s
143(2) of his presence or production of documents.

 Assessing officer is not satisfied about the

correctness/completeness of the A/Cs Refund cannot be granted.
 Assessment can be completed within 21 months from the end
of relevant A.Y.

Reassessment (Sec. 147)

Can be done by A.O. within 4 years from the end of
relevant A.Y.

Appeal lies to CIT (Appeals) (Sec. 246A)

Against the following orders appeal lies with CIT
(appeals):

 Orders passed by the JCIT regarding income assessed

or tax determined.
 Intimation u/s 143(1) where assesses objects to make
adjustments.
 Regarding fringe benefits order and assessment.
  Order of assessment/ reassessment.

Right to claim refund (Sec. 237)

Where the amount of Tax paid by the
assesses is more than that which is assessed by the
authority, he has got the right to claim refund u/s
237.

Sec. 238
Refund could be claimed by the person who
has made excess payment of tax & no one else.
Refund could be claimed within 1 year of
the end of the A.Y.
In case of refund arises in the course of any
proceedings or appeal, no need to file a formal
application, such a refund could be claimed SUO-
MOTTO.

Interest on refund (Sec. 244A)

0.5% per month from the 1ST day of A.Y to
the grant of refund. Interest payable by the assesses
or by the government would be rounded off in
multiple of Rs. 100 and fraction of Rs. 100 would be
ignored.

Set off refund against outstanding

tax (Sec. 245)
The authorities may in lieu of payment of
refund set-off the amount to be refunded against the
sum payable under the act but such action could be
taken only after giving intimation in writing to such
person of the action to be taken.

What is PENALTY?
It is defined as a complaint to a superior
court for an injustice done by an inferior one. The
party complaining is styled as APPELANT and other
party is RESPONDENT.

APPEALS
 Some Penalties
 Sec. 271(1)(c): Concealment of INCOME
Penalty: Max.: 300% tax sought
to be evaded.
Min.: 100% tax sought to be
evaded.
 Sec. 271B: Failure to get A/Cs audited u/s
44AB or failure to submit audit
 Report.
Penalty: 0.5% of total sales OR
Rs. 1 Lakh which is LESS.
 Sec. 271C: Failure to deduct tax.
Penalty: Equal to fail TDS or Tax
Paid.
 Sec. 271F: Failure to submit Return.
Penalty: Rs. 5000.
 Sec. 272B: Failure to obtain/ quote false/
failure to quote PAN No.
Penalty: Rs. 10000.

Fringe Benefit Tax

 Sec. 115WA: Basis of charges:

 FB are provided by ‘Employer’.

 Provided to his/its ‘Employee’.
 Benefits are provided during P.Y.

 Rate of Tax: 30% + (SC+EC+SHEC)

Fringe Benefits
Sr % of
no Expenditur
. Fringe Benefits e
1 free/ concessional ticket for 100%
private journey for employee or
 his family members
Any contribution to approved 100% in
2 superannuation fund for excess of
employee Rs. 1 lakh
Any specified security/ seat Equity
100% of fair
allotted/ transferred, directly or
mrkt. Value
3 indirectly by the Employer to
on the date
employee free of cost or @
of transfer
concessional rate

Deemed Fringe Benefits

Sr % of
no Expenditur
. Deemed Fringe Benefits e
1 Entertainment 20%
Provision of hospitality of every
2 20%
kind by employer to any person
Conference expenditure(other
3 20%
than FEES)
Sales promotion including
4 20%
publicity
Employee's welfare (Do Not
5 include Statutory Obligation & 20%
First-Aid Kit in Hazardous Job)
6 Conveyance 20%
Use of Hotel Boarding, Lodging
7 20%
facility
Repair, Running, Fuel expenditure
8 & Dep., maintenance exp. Of 20%
MOTOR CAR & AIR CRAFT
9 Maintenance of any 20%
accommodation(other than for
 training purpose ) in nature of
GUEST HOUSE
10 Festival Celebration 50%
Use of the HEALTH CLUB & OTHER
11 50%
CLUB FACILITY
12 GIFTS, SCHOLERSHIP 50%
13 TOUR, TRAVEL, FOREIGN TRAVEL 5%

 It is NOT DEDUCTIBLE tax.

 It is allowed as DEDUCTION in case of computation of

BOOK PROFIT.

Due Dates
 For CO. OR Other than Co. having income
from BUS./PROFFESION & books are
required to be AUDITED OCTOBER 31

 For Others JULY 31

Returns Forms
For
m For Whom Remarks
No.
Consolidated i.e
ITR- Income Tax+FB
5 Firms, AOP,BOI return
 Consolidated i.e
ITR- Co.'s other than Co.'s who Income Tax+FB
6 claim Exemption u/s 11 return
Consolidated i.e
ITR- Income Tax+FB
7 Persons including Co. return
ITR- Person not liable to submit
-----
8 income-tax return

Assessment of Partnership Firm

 Computation of BOOK PROFIT:
Net Profit (As per P&L A/c)
Add.: Remuneration to Partner if Debited to P&L A/c
Add.: Interest to Partners in excess of 12%

Some IMP Notes

 Income from HOUSE PROPERTY, CAPITAL GAIN &
OTHER SOURCES are NOT to be INCLUDED.

 BUS. LOSS NOT INCLUDED

Carried Forward
 BUS. DEPRICIATION INCLUDED
 Deduction u/s 80C to 80U is to be IGNORED.

Remuneration permissible to Partners

  Profession Firm refereed to Sec. 44AA:

First 1 lakh of B.P 50,000 or 90% of 1 lakh

Next 1 lakh 60%
Balance 40%

 In Other Cases:

First 75,000 of B.P 50,000 or 90% of 75000

Next 75,000 60%
Balance 40%