Income Tax Assessment

Income Tax Assessment Cases – Indian Tax Planning (ITP) ITP Indian Tax Planning Lead Advisor: Ankush Aggarwal info@indiantaxplanning.in +91 98718 22710 Navigate Income Tax Assessments Confidently Practical, legally-sound guidance on notices (142/143/148/148A), detailed scrutiny, reassessment and appeals — designed for salaried taxpayers, professionals and businesses. Book Assessment Consultation Download Notice Checklist Prefer email? Write to info@indiantaxplanning.in or call +91 98718 22710. Our Tax Assessment Services Comprehensive support for all stages of the income tax assessment process Notice Response & Representation Professional drafting of responses to notices under sections 142(1), 143(2), 148, and 148A with proper documentation and legal arguments. Assessment Hearing Support Representation during assessment proceedings, preparation for hearings, and strategic guidance for interactions with tax authorities. Appeal Drafting & Filing Preparation and filing of appeals before CIT(A), ITAT, and higher appellate authorities with well-researched legal grounds. Reassessment Defense Strategic defense against reassessment proceedings, including challenging validity of notices and protecting against income escapement allegations. Penalty Proceedings Defense Representation in penalty proceedings under sections 270A, 271(1)(c), and related provisions with emphasis on reasonable cause defenses. Tax Litigation Advisory Strategic advice on tax litigation matters, case evaluation, settlement options, and representation before appellate authorities. The Income Tax Assessment Process — Practical roadmap 1 Return Filing & Processing (Sec 143(1)) Check auto-populated TDS, reportable income, and verify refund or tax payable. Keep audit trail for all claims. Tip: reconcile Form 26AS / AIS before filing. Tip: store digital copies of bills & proofs for 6 years. 2 Notice Issuance (142/143/148/148A) Identify the statutory basis of the notice and the specific information sought. Treat 148A as the chance to prevent reassessment. Action: prepare a fact-sheet answering the AO’s stated “information”. 3 Detailed Scrutiny & Hearing Submit documents, affidavits, and legal points. Keep hearings short, factual and documentary. Tip: follow a one-page cover note summarizing the case facts for the AO. 4 Final Assessment Order & Next Steps If additions are made — analyze legal grounds, gather contemporaneous evidence and consider CIT(A) appeal within 30 days. Strategy: request stay of demand where recoverability causes hardship (follow legal requirements). Actionable Guide to Assessment Notices Notice under Section 143(2) — Scrutiny What it means: The return is selected for detailed examination to verify income, deductions and disclosures recorded in the return. Immediate checklist (what to prepare) Signed copy of filed ITR, computation of income and bank statements. Proofs for claimed deductions (80C, 80D, 80G), home loan certificate, rent receipts (if HRA relief claimed). Form 16 / Form 26AS / AIS reconciliation and TDS certificates. Supporting invoices / contracts for any business/ professional income. Sample short reply (send within timeframe) Subject: Response to Notice u/s 143(2) — AY XXXX-XX To, The Assessing Officer, [Ward/Circle], [Address] Dear Sir/Madam, In response to Notice u/s 143(2) dated [date], please find attached: 1) Copy of ITR and computation 2) Bank statement for FY [xxxx-xx] 3) Copies of proofs for deductions claimed (Annexure A) 4) Reconciliation of TDS / Form 26AS (Annexure B) We request an opportunity for hearing on [2-3 preferred dates]. Kindly confirm the mode (physical / video) and list of any additional documents required. Yours faithfully, [Taxpayer / Authorised Representative] Ankush Aggarwal — Lead Advisor, Indian Tax Planning Tip: always attach an indexed annexure with page numbers to help the AO review quickly. Notice under Section 148A/148 — Re-assessment Purpose & new procedural point: Section 148A mandates a preliminary inquiry before issuing a notice — you can prevent a full reassessment by providing a robust explanation at this pre-initiation stage. How to respond to 148A (practical strategy) Identify the “information” relied upon by the AO (often mentioned in the notice) and address it pointwise. Provide documentary evidence that income did not escape assessment (bank records, ledger extracts, documentary proof of transactions). If income was omitted by bona fide error — explain facts and offer to cooperate (avoid speculative statements). Possible timeline & limitation In general reassessment can be initiated within 3 years from end of relevant AY; in specified cases up to 10 years. For 148A responses act quickly — the law provides a short window to respond before issuance of formal 148 notice. Notice under Section 142(1) — Inquiry for documents / clarification What to do: Supply exactly what is asked, in the format requested. If you cannot produce something, state reason and propose alternative proof. Common traps to avoid Do not volunteer extra admissions beyond what is requested. Do not ignore the timeline — late compliance often leads to adverse inference (Section 144). Post-Assessment Remedies & Appeals — Quick reference 1. CIT(A) — Commissioner (Appeals) First level appeal. File within **30 days** from date of service of order (extension available with condonation application in limited circumstances). Form: Form No. 35. Prepare a succinct grounds-of-appeal and rely on documentary evidence and precedents. 2. ITAT — Income Tax Appellate Tribunal Appeal against CIT(A) order. Practice directions, limitation periods and procedural compliance are critical here. Tip: File a concise paper book and be ready with oral arguments on legal points and fact matrix. 3. High Court & Supreme Court Further appeal only on **substantial question of law**. Consider settling factual disputes at lower forums to preserve legal points for higher courts. Costs & timelines escalate — weigh commercial sense before litigating at apex forums. Need help drafting grounds of appeal? Book a drafting session. Landmark Rulings — What they mean for you Recording of ‘Reasons to Believe’ — GKN Driveshafts (Supreme Court) Holding: AO must record valid reasons supporting issuance of a notice (previously under old s148). Practical effect: challenge the validity of reassessment proceedings when reasons are infirm. Faceless Assessment & natural justice (High Court rulings) Holding: Even under faceless systems, principles of fair hearing and adequate opportunity cannot be bypassed. Practical effect: insist on clear communications and record of opportunity to explain. Cash credits under Section 68 (Various High Courts) Holding: Taxpayer must establish identity, creditworthiness and genuineness of transaction. Practical effect: maintain complete documentation for all cash credits and be prepared to demonstrate source. Burden of

GST Refund Process

Exports under LUT (without payment of IGST) allow businesses to claim a refund of unutilized Input Tax Credit (ITC) on inputs and services used for zero-rated supplies. This ensures smooth cash flow and encourages export competitiveness under GST.

Income Tax Assessment and Appeals

Understanding Income Tax Assessment in India

Filing an income tax return is just the first step in staying compliant. Income Tax Assessment is the process through which the department verifies the accuracy of reported income, deductions, and taxes paid. Depending on the case, assessments can be summary, scrutiny, or best judgment, each serving to ensure transparency and correctness. Understanding this process helps taxpayers respond efficiently to notices, claim legitimate deductions, and avoid penalties.