R prasanth sir sagar

Bca nttf it ajra info tesh

1) Self Assessment u/s 140 A : This simply means that the person is calculating his own tax liability and
thereafter filing ITR after payment of selfcalculated tax. Since assessee himself calculates the tax and
income returned – 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. However, the system of self-assessment is
only to make the work of IT Dept easier – it is not the end of assessment. It is simply paying tax and filing
of Return by the assessee. The IT Dept only gives an acknowledgement / intimation u/s 143(1). The
assessee can file ITR as Self assessment under the different sections of 139 (Return within due date /
Belated Return / Return of Loss etc.) or in response to notice u/s 142(1) or 148 or 153A There is no
assessment order by the Dept. under Self Assessment simply because, the assessment is not being done
by the department. Since the assessment is not being done by the IT Department, for legal purpose the
acknowledgment / intimation by IT Department is not considered as ‘Assessment’.

2) Regular / Scrutiny Assessment u/s 143(3): On the basis of return of income filed, AO may undertake
deep 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. Assessment made under this section would be final
and the department cannot open the case again – unless there are valid reasons (‘reasons to believe’).

3) Best Judgement 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 AO himself, on the basis of the best of his judgment. The Best
judgment Assessment can be made by an A.O. 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. U/s 144 A.O. cannot assess income below returned income and
cannot assess loss higher than the returned loss. Even in case there is no return for the year, the AO has
to base his calculation on certain logical/rational/ scientific and reasonable ways viz . based on ratios,
growth rate of industry / sector. The assessment order should therefore be a speaking order.
Assessment u/s 144 can also be resorted to if AO is not satisfied with the correctness / completeness of
Books of Accounts. Also the AO can reject Books of accounts u/s 145 if assessment proceedings are in
process u/s 143(3) / 144 / 147 / 153A – and in such case, the AO shall assess the income and tax to the
best of judgement (ie. as per the requirements / procedure of sec 144) and complete assessment
proceedings under the particular section under which the proceedings are going on.