CA Abbas Gulamhusainwala - PowerPoint Presentation

Slide1

CA Abbas Gulamhusainwala

Head Office

609/A, Atlantis Heights, Sarabhai Main Road, Near Genda Circle, Vadodara- 390023+91 265 2329099

Branch Offices

Vadodara &

GodhraSlide2

2

Assessment Procedures

IMPORTANCESlide3

Assessments

3

Various assessments under Income-tax LawAssessment under section 143(1)

Assessment under section 143(3)

Assessment under section 144Slide4

Assessments

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Assessment under section 143(1)Upon filing the return under section 139 or in response to notice section 142(1), the return shall be processed withinOne year from the end of the financial year in which the return is made.Return shall not be necessary before the expiry of the period specified above, where a notice has been issued to the

assessee under sub-section (2): w.e.f. 1.4.2017 means AY 2017-18Provided that such return shall be processed before the issuance of an order under sub-section (3). Slide5

Assessments

5

The permissible adjustments under processing of intimationAny arithmetical error

Any incorrect claimDisallowance of claimed loss

Disallowance of expenditures

Disallowance of deductions

like wrong rate of special tax rate, interest u/s 234A/B/C

if such incorrect claim is apparent from any information in the return;  HRA claim, claim u/s 80G if PAN of

donee

is not mentioned

if

RoI

of the previous year is not furnished in due date

indicated in the audit report but not taken into account in

RoI

Deductions u/s 10AA, 80IA, 80IAB, 80IB, 80IC, 80ID and 80IE, if the

RoI

is furnished beyond the due date

W.E.F.

01.04.17

Addition of income

Income appearing in Form 26AS or Form 16A or Form 16 and not been included in

RoI

Assessment under section 143(1)Slide6

Assessments

6

No such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode.If response received from the assessee, if any, shall be considered before making any adjustment, and if no response is received within thirty days of the issue of such intimation, such adjustments shall be made.

Assessment under section 143(1)Slide7

Assessments

7

Assessment under section 143(3)Limited Scrutiny

Complete Scrutiny under CASS system

Complete Scrutiny under manual selectionSlide8

Assessments

8

Where a return has been furnished u/s 139, or in response to a notice u/s 142(1), the AO or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the AO or to produce, or cause to be produced before the AO any evidence on which the assessee may rely in support of the return:Provided that no notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished.

Notice under section 143(2)

Assessment under section 143(3)Slide9

Assessments

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Sample Notice of “Limited Scrutiny” Assessment under section 143(3)Slide10

Assessments

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Specific issue based enquiry is conducted based on selected parameter(s) of Annual Information Report (AIR) Central Information Branch (CIB) informationNon-reconciliation with Form No. 26AS dataAO’s scope of inquiry shall be limited to the 'Limited Scrutiny' issues.Such cases shall be completed expeditiously in a limited number of hearings.

Instruction No. 20/2015; Dated 29.12.2015 Instruction No. 5/2016; Dated 14.07.2016

Limited Scrutiny

Assessment under section 143(3)Slide11

Assessments

11

Conversion of Limited Scrutiny into Complete scrutiny If during the course of assessment, it comes to the notice of the AO that there is potential escapement of income exceeding Rs. 5 Lakh (Rs. 10 Lakh for 7 specified metros namely Delhi, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad and Ahmedabad)AO may taken up “Complete Scrutiny” after written approval from Pr. CIT/CIT,

Instruction No. 20/2015; Dated 29.12.2015 Instruction No. 5/2016; Dated 14.07.2016

Limited Scrutiny

Assessment under section 143(3)Slide12

Assessments

12

Conversion of Limited Scrutiny into Complete Scrutiny AO shall be required to form a reasonable view that there is possibility of under assessment of income if the case is not examined under 'Complete Scrutiny‘.While forming a view, the AO would ensure that: there exists credible material or information available on record for forming such view; this reasonable view

should not be based on mere suspicion, conjecture or unreliable source; and there must be a direct nexus between the available material and formation of such view.Before granting an approval in writing, the Pr. CIT/CIT shall be satisfied about merits of the case.

Once it is converted to Compete Scrutiny, AO may go beyond issues noted in forming his view.

Applicable for the cases selected in CASS 2015 and CASS 2016.

Instruction No. 5/2016; Dated 14.07.2016

Limited Scrutiny

Assessment under section 143(3)Slide13

Assessments

13

Complete coverage of all incomes, deductions claims and exemptions claimed by assessee not restricted to specific issue.Selection can be made under Manual or Compulsory ScrutinyReason for selection in manual scrutiny:Non filing of RoI

Declaring lesser income/more loss as compared to P.Y.Claiming large refunds in RoI

Claiming deduction under business income

Complete Scrutiny

Assessment under section 143(3)Slide14

Assessments

14

Reason for selection in compulsory scrutiny:Additions more than 10 Lakh in earlier assessment year and confirmed or pending before appellate authorityAdditions more than 10 Crore in case of transfer pricing in earlier AY and confirmed or pending before appellate authorityAll assessment pertaining to Survey under section 133AAssessment in search and seizure cases

RoI filed in response to notice under section 148Cases where registration u/s 12AA has not been granted or cancelled and assessee claimed exemption u/s 11

Cases in respect of which specific and verifiable information pointing out tax evasion given by Govt. Dept./ Authorities

Selection based on Computer Aided Scrutiny Selection (CASS)

Complete Scrutiny

Assessment under section 143(3)Slide15

Assessments

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Sample Notice of “Complete Scrutiny” Assessment under section 143(3)Slide16

Assessments

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Sample Questionnaire on “Complete Scrutiny” Assessment under section 143(3)Slide17

Assessments

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Assessment under section 143(3)Sample Questionnaire on “Complete Scrutiny”Slide18

Assessments

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Points to be considered for better presentationAuthorized representative under section 288Check whether notice is issued by the jurisdictional AOCheck whether notice is received in time limit – Section 292BBCheck information called for in the assessment

Extend of information on specific issue or special items of RoI considered in notice

Assessment under section 143(3)Slide19

Assessments

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Sample Submission against questionnaire Assessment under section 143(3)Slide20

Assessments

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Assessment under section 143(3)Sample Submission against questionnaireSlide21

Assessments

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Sample Submission against questionnaire Assessment under section 143(3)Slide22

Assessments

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Points to be considered for better presentationIn case of loan and other credits onus on the assesseePreceding period informationThird party informationInformation called under section 131 from outsiders

Evidences relied in the matterCase laws

Assessment under section 143(3)Slide23

ASSESSMENT

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SHOW CAUSE NOTICEIn all cases under scrutiny, where the AO proposes to make additions or disallowances, the assessee would be given a fair opportunity to explain his position on the proposed additions/disallowances in accordance with the principle of natural justice.Draft proper reply to show cause notice considering below situation.

The adjustment of the AO is completely wrong in law

The adjustment of the AO on debatable issue

The adjustment of the AO is correct in law

PF deposited after due date, disallowance u/s 40(a)(

i

)

Eligibility of claim under section 80 IA, 80 IB, 10AA…..

Addition u/s 68, Business Expenses, Deemed dividend…..Slide24

ASSESSMENT

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ADDITIONAL / FRESH CLAIM OF DEDUCTION IN ASSESSMENTCan a assessee make a fresh or additional claim not made earlier in the return filed or by revising it???CBDT's Circular No. 14(XL-35) dated 11-4-1955 - Officers of the Department must not take advantage of ignorance of an assessee as to his rights.

Goetze (India) Ltd. v. CIT 284 ITR 323 (SC) judgment dated 24-3-2006 held that the claim of deduction not made in the return cannot be entertained by the assessing officer otherwise than by filing a revised return.Jute Corporation India Ltd v. CIT 187 ITR 688 (SC) ( 1991) -

appellant authority are entitled to execute the additional claim.

Pruthvi

Brokers and Shareholders Pvt Ltd

349 ITR 336 (

Bom

)

-

assessee is entitled to raise before appellate authorities additional grounds in terms of additional claims not made in return filed by it

.

Assessee may claim deduction during the appellate proceeding. However, assessee should ensure that all necessary evidence is submitted during assessment proceedings and is available on record.Slide25

ASSESSMENT

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PROTECTIVE ASSESSMENTTo protect the interest of the revenue, the AO may tax income in the hands of the assessee on protective basisThis matter can be resolved once the assessment is made on substantive basis in the hand of other assesseeIn case of search, documents pertains to transaction of other person fund from assessee’s premise

Investment by other party jointly with the assesseeThe AO can no press for recovery of demand in case of protective assessmentUnder law, a protective order of assessment can be passed but not the protective order of penaltySlide26

ASSESSMENT

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An opportunity of being heard shall be given to assessee before making assessment under section 144.AO should consider all the material on record for framing an assessment order Assessment under section 144

BEST JUDGEMENT ASSESSMENT where

Fails to make the return u/s 139(1) or has not made return or revised return u/s 139(4) and u/s 139(5)

fails to comply with notices issued u/s 142(1) or direction u/s 142(2A)

Has furnished

RoI

, fails to comply with all terms of notice issued u/s 143(2)

AO is not satisfied with correctness and completeness of account

OR

method of accounting followed is not notified Slide27

RE - Assessments

27

Ways to reassess the income under Income-tax LawIncome Escaping assessment under section 147

Assessment under section 153A / 153CSlide28

Assessments

28

Notice under section 148 is to be issued within 4 , 6 or 16 years from the end of the relevant assessment year.4 years, if escaped income is less than Rs. 1 Lakh6 years, if escaped income is or more than Rs. 1 Lakh16 years, if relates to an asset located outside India.AO is duty bound to provide the copy of reason recorded within reasonable time - GKN

Driveshafts India Ltd 259 ITR 19 (SC)

Income escaping assessment under section 147Slide29

Assessments

29

Assessing Officer reopened assessment by noticing that assessee claimed credit for TDS against current year's income on professional receipts which were not offered for taxation - However, it was noticed that Assessing Officer had earlier issued notice for rectification under section 154 on same subject matter - Neither any order had been passed under section 154 nor such proceedings had been dropped - Whether since initiation of two parallel proceedings on a similar subject matter cannot sustain, proceedings under section 147 could not stand during continuation of proceedings under section 154 - Held, yes– Sushil Kumar Jain 71 taxmann.com 136 (Delhi-Trib.) (2016)

Income escaping assessment under section 147Slide30

Assessments

30

Where assessee engaged in power generation for captive consumption, provided reason for inter-division transaction price and AO allowed deduction u/s 80-IA after scrutinizing claim minutely, reassessment was unjustified.– Vishal Fabrics (P.) Ltd. 71 taxmann.com 97 (Gujarat) (2016)Where assessee had disclosed all material facts relating to tax free dividend income at time of making assessment, initiation of reassessment proceedings merely on basis of change of opinion that assessee did not offer any expenditure for disallowance u/s 14A in respect of said income, was not sustainable.– Sun Pharmaceutical Industries Ltd 381 ITR 387 (Delhi) (2016)

Income escaping assessment under section 147Slide31

Assessments

31

Where Assessing Officer passed an order under section 147, read with section 143(3) for making assessment without issuing notice under section 143(2), it would be invalid; Assessing Officer could not justify that order invoking section 292BB or section 148 – Sanjeev Aggarwal 159 ITD 302 (Chandigarh-Trib.) (2016)Unless escapement of income was indicated, mere fact that assessee had made huge cash withdrawal from bank for purchase which was very much doubtful, could not be a ground for reopening assessment– Amit K. Shah 71 taxmann.com 256 (Ahmedabad-Trib.) (2016)

Income escaping assessment under section 147Slide32

Assessments

32

Reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn on the basis of reasons not recorded. It is for the Assessing Officer to disclose and open his mind through the reasons recorded by him. He has to speak through the reasons. Further, the reasons recorded should be self-explanatory and should not keep the assessee guessing for reasons. Reasons provide link between conclusion and the evidence.– Hindustan Lever Ltd 268 ITR 332 (Bombay) (2004)Income escaping assessment under section 147Slide33

Assessments

33

Where during original assessment proceedings, AO after examining are aspect of share application money received by assessee, through issuance of questionnaire, framed assessment making no addition on that account, reopening of assessment on ground of suspicion on creditworthiness of investors after four years would amount to change of opinion which is not permissible in law.Perusal of the reasons for initiating re-assessment shows that there is not even an allegation that there has been failure on the part of the petitioner/assessee to fully and truly disclose all the material particulars necessary for re-assessment.– Allied Strips Ltd. 384 ITR 424 (Delhi) (2016)

Income escaping assessment under section 147Slide34

Assessments

34

Assessee deposited cash in his savings bank account but did not file return of income - AO sent a letter of inquiry to assessee to verify source of said cash deposit. In absence of any response, AO formed belief that income of assessee had escaped assessment and, consequently, assessed such cash deposits. Whether AO sent an invalid letter of enquiry as no proceeding was pending before him and, consequently, it was not obligatory on assessee to respond - Held, yes - Whether, therefore, assessee's non-response could not constitute material to form belief of escapement of income - Held, yes - Whether, AO proceeded on fallacious assumption that bank deposits constituted undisclosed income, over-looking fact that source of deposits need not necessarily be income of assessee and, therefore, action of AO not justified - Held, yes– Amrik Singh 159 ITD 329 (Amritsar-Trib.) (2016)

Income escaping assessment under section 147Slide35

Assessments

35

Where assessee filed revised return, which was processed under section 143(1), and subsequently AO issued on assessee a notice under section 148. Assessee raised objection with regard to issue of notice under section 148 instead of issuing same under section 143(2). Act of AO in issuing notice under section 148 within time limit available for issue of notice under section 143(2) was not as per law.– Vardhman Holdings Ltd. 158 ITD 843 (Chandigarh - Trib.) (2016)Income escaping assessment under section 147Slide36

Assessments

36

Points to be considered for better presentationReason to believe that any income chargeable to tax has escaped assessmentReason to believe and not reason to suspectBased on direct and circumstantial evidences and not on mere suspicion, gossip or rumourIn case of re-assessment after 4 years,

Reason to believe for income escapement andEscapement is on account of failure of the assessee to disclose fully and truly facts of the matter

Income escaping assessment under section 147Slide37

Assessments

37

Points to be considered for better presentationW.e.f. 1.6.2016, based on the information called under section 133C(2), the AO may reopen the case as there is an escapement of incomeExplanation 2- [(ca) where a return of income has not been furnished by the assessee or a return of income has been furnished by him and on the basis of information or document received from the prescribed income-tax authority, under sub-section (2) of section 133C, it is noticed by the Assessing Officer that the income of the assessee exceeds the maximum amount not chargeable to tax, or as the case may be, the

assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return;]

Income escaping assessment under section 147Slide38

Assessments

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Points to be considered for better presentationVerify RoI for disclosure of escaped incomeRecompute the income and deductions before filing return against the noticeInvalid reason for re-opening Cash deposit in bank

– Bir Bahadur Singh

Sijwani

68 SOT 197 (Delhi-Trib.)

Source of purchase of flat

–

Smt.

Maniven

Vajli

Shah

283 ITR 453 (Bombay)

Income escaping assessment under section 147Slide39

RE - Assessments

39

Assessment under search cases

At the time of search

Post search investigation

Assessment u/s 153ASlide40

RE - Assessments

40

Assessment under section 153A The AO shall issue notice to the person searched to file ROI for 6 assessment years preceding the year of search

AO to assess / reassess total income for six assessment years

Any proceeding pending on the date of initiation of search shall abate

However any appeal, revision and rectification proceeding shall not abate

If this proceeding will be annulled, all the abated assessment shall stand revived

Taxable at rate chargeable to such yearSlide41

RE - Assessments

41

Where the AO is satisfied that any money, billion, jewellery to any other valuable article or things, or books of accounts or documents seized or requisitioned belonging to person other than refereed in section 153A.

Such notice can be issued by the AO having jurisdiction of the other person

There must be incriminating material to establish link of other person

AO can make protective

assessment

u/s

153C

Assessment under section 153C Slide42

Assessments

42

Documents based on which AO initiated proceedings u/s 153C did not belong to assessee, notice u/s 153C is invalid and assessment framed to be cancelled – Meghmani Organics Ltd 221 Taxman 25 (Guj.) & Vijaybhai N. Chandrani 333 ITR 436 (

Guj.)IT Dept. can inspect data of contained in laptops of auditors, where data relating to client for proper assessment – S.R. Batliboi

& Co. 227 CTR 238 (SC)

Addition based on third party statement after search without incremental material found during search is not sustainable

–

Balaji

Wire (P.) Ltd 304 ITR 393 (Delhi)

Assessment proceedings are invalid based on invalid search warrant

–

Suvidha

Association 320 ITR 461 (

Guj

.)

Assessment under section 153A / 153CSlide43

RE - Assessments

43

Points to be consider for better presentationSystematically arrange and make analysis of all the seized documents.Sort the documents assessee-wise, assessment year wise, premises wise and having financial relevance/irrelevance.If the documents are financially relevant, ascertain how they are explainable vis-à-vis books of accounts or other details available with the Income Tax Department or are found / seized from the premises searched or surveyed .List out the explanation for critical seized paper and corresponding transactions into books of accounts.

Assessment under section 153A / 153CSlide44

Assessments

44

The notice under section 143(2) was issued beyond the statutory time of one year from the end of the month in which the return was filed the assessment was void-ab-initio – Mahi Valley Hotels & Resorts 287 ITR 360 (Gujarat) (2006)Whether notice having been served upon assessee on very next working day (Monday), applying logic of section 10 of Clauses Act, it can be said that there was sufficient compliance and notice was valid – Gujarat State Plastic Manufacturers Association 359 ITR 516 (Gujarat) (2013)

Reopening notice u/s 148 was not sustainable in absence of notice u/s 143(2) – Sukhini P. Modi

367 ITR 682 (Gujarat)

Service of Notice - Section 143(2)Slide45

Assessments

45

Where no return was filed in compliance of notice u/s 148, issuing of notice u/s 143(2) was not mandatory – Uday Bhagwan Industries 33 Taxmann.com 226 (Agra)In cases of search assessment U/s 153BC , issuance of notice u/s 143(2) is mandatory – Hotel Blue Moon 321 ITR 362 (SC)In case of search assessment u/s 153A, issuance of notice u/s 143(2) is not mandatory

– Ashok Chaddha – 337 ITR 399 (Delhi)In case of search assessment u/s 153A, issuance of notice u/s 143(2) is mandatory

–

Narendra

Singh 130 ITD 509 (Agra)

Service of Notice - Section 143(2)Slide46

Assessments

46

“Where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was—not served upon him; or not served upon him in time; or served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.”

Notice deemed to be valid in certain circumstances - Section 292BBSlide47

Assessments

47

Section 292BB would apply with regard to failure of 'service' of notice and not with regard to failure to issue notice– Silver Line 383 ITR 455 (Delhi) (2016) In case of order passed u/s 144C and objection is taken to the DRP before final order passed, is valid under section 292BB– Alpine Electronics Asia Pte. Ltd. 41 ITR 247 (Delhi) (2012)

“Issue” or “Service” - Section 292BBSlide48

REVISION OF ORDERS

48

Revisions of the orders under Income-tax LawRevision of orders prejudicial to revenue under section 263

Revision of other orders under section 264Slide49

REVISION

49

Pr. CIT/CIT may call for and examine the record if foundAny order passed by the AO is erroneous and Order is prejudicial to interests of the revenue

After giving an opportunity of being heard and after making inquiry as he deems necessary, pass order for enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment."record

" shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination.

Pr. CIT/CIT must record reason for order is erroneous.

The revision order is appealable before ITAT.

Revision of orders prejudicial to revenue under section 263Slide50

REVISION

50

What constitute order passed by AO is erroneous:Without making inquiries or verification which should have been madeAllowing any relief without inquiring into the claimNot been made in accordance with any order, direction or instruction issued by the Board u/s 119, ORnot been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person.

Revision of orders prejudicial to revenue under section 263Slide51

REVISION

51

Where Assessing Officer after making proper and detailed enquiries, took a view that amount received by assessee as gift from his relatives was a genuine transaction, impugned revisional order passed by Commissioner directing Assessing Officer to enquire into capacity of donors and to decide about genuineness of gift afresh, was not sustainable – Nirav Modi 71 taxmann.com 272 (Bombay) (2016)

Revision of orders prejudicial to revenue under section 263Slide52

REVISION

52

Section 263 does not require any specific show cause notice detailing specific grounds on which revision of assessment order is tentatively being proposed affecting initiation of exercise in absence thereof or to require commissioner to confine himself to terms of notice and foreclosing consideration of any other issue or question of fact; Commissioner is free to exercise his jurisdiction on consideration of all relevant facts, provided an opportunity of hearing is afforded to assessee to contest facts on basis of which he had exercised revisional jurisdiction– Amitabh Bachchan [2016] 384 ITR 200 (SC)

Revision of orders prejudicial to revenue under section 263Slide53

REVISION

53

There can be no doubt that so long as the view taken by the Assessing Officer is a possible view, the same ought not to be interfered with by the Commissioner under section 263 merely on the ground that there is another possible view of the matter. Permitting exercise of revisional power in a situation where two views are possible would really amount to conferring some kind of an appellate power in the revisional authority.– Electro House [1971] 82 ITR 824 (SC) Landmark case

Revision of orders prejudicial to revenue under section 263Slide54

REVISION

54

On basis of documents unearthed during search at third party premises indicating payments made to persons holding public office, assessments of assessee were reopened for both years - Assessee had denied any connection with incriminating document - Assessing Officer was satisfied with said explanation and, accordingly, did not make any addition to total income in both years - Placing on amendment made in Explanation 2(a) to section 263, Commissioner revised said order - Whether since Commissioner had not brought any material on record to substantiate his inference, Commissioner had passed impugned revision orders only to carry out fishing and roving enquiries with objective of substituting his views with that of Assessing Officer - Held, yes – Narayan Tatu Rane [2016] 70 taxmann.com 227 (Mum.- Trib.)

Revision of orders prejudicial to revenue under section 263Slide55

REVISION

55

Where original assessment order had been revised under section 264 and, thus, no longer existed, order passed by Commissioner under section 263 revising original assessment was void-ab-initio.– New Mangalore Port Trust [2016] 382 ITR 434 (Karnataka)Revision of orders prejudicial to revenue under section 263Slide56

REVISION

56

Pr. CIT/CIT may either of his own motion or on an application by the assessee for revision, may pass revision order, not being an order prejudicial to the assessee.Applies only to subordinate authority of Pr. CIT/CIT.Pr. CIT/CIT cannot revise order made u/s 263.Pr. CIT/CIT cannot revise order made more than 1 year.In respect application made by assessee, period of 1 year is consider from date of communication to him or came to know of it.

Pr. CIT/CIT may also condone delay in filing of application if sufficient cause for not making application within time.

Revision of other orders under section 264Slide57

REVISION

57

In following cases revision u/s 264 is not allowed:Appeal has not been made before DCIT(A) / CIT(A) / ITAT and time is not expired or assessee has not waived his right of appeal before CIT(A) / ITATAppeal is pending before DCIT(A); orOrder has been made subject to appeal to CIT(A)/ITATApplication fees Rs. 500/- for every application.

Pr. CIT/CIT may call all for the record of any proceeding under this Act in which any such order has been passed and may make such inquiry or cause such inquiry to be made, as he thinks fit.

Revision of other orders under section 264Slide58

REVISION

58

CBDT Circular No. 367 dated 26.07.1983 - “Subject of an Appeal”Section 264(4)(c) provides that the Commissioner shall not revise any order where the order has been made the subject of an appeal to the CIT(A) / ITAT. A doubt has been raised whether in the following situations the order can be said to have been made ‘subject of an appeal’:appeal was withdrawn by the assessee and it was dismissed as such;

appeal was dismissed on the ground that the appeal was incompetent;appeal was dismissed on ground of limitation.Board is of the view that the order cannot be said to have been made ‘subject of an appeal’ if the appeal has been disposed of by the CIT(A) / ITAT, without passing an order u/s 251(1) or 254(1) on merits.

Revision of other orders under section 264Slide59

REVISION

59

Revision powers u/s 264 are very wide. It is open to the CIT to entertain even a new ground, not urged before the lower authorities, while exercising revision powers. – C. Parikh & Co. 122 ITR 610 (Guj.)A new claim for deduction made by the assessee in revision petition can be examined on merits – Rashtriya Vikas Ltd. 196 ITR 694 (All.)

Even an order passed in violation of the principles of natural justice can be corrected u/s 264 – Mohammadi Begum 158 ITR 662 (AP)A petition for revision u/s 264, may be made against orders which are not appealable under the statute – Dwarka

Nath

57 ITR 349 (SC)

Revision of other orders under section 264Slide60

REVISION

60

A petition for revision u/s 264, may be made against levy of penal interest – Geeta Ram Kali Ram 121 ITR 708 (All)An applicant must be granted an oral hearing by the CIT before disposing of his application U/s 264. A written submission cannot be substituted for oral argument before the CIT, while dealing with a revision petition. The CIT should fix the date for hearing and give an opportunity of hearing before passing an order – Dulalchand Pramanick Vs CIT 84 ITR 720 (Ori.) &

Industrial Rubber Products Vs CIT. 194 ITR 141(Mad.)If the CIT does not give an opportunity of being heard to the assessee, his orders are liable to be quashed – S. K. Veeraraghavan

Vs CIT 71 ITR 823(Mad.)

Revision of other orders under section 264Slide61

REVISION

61

Revision order passed u/s 264 should not be prejudicial to the assessee even indirectly. Order of penalty u/s 271(1)(c) which is not initiated in original order of AO, shall be cancelled – M. V. Kenlucky 60 ITD 492 (Pune–Trib.)Power under section 264 is wide enough to include rectification of a 'bona fide' error committed by an assessee, while claiming exemptions. – Kewal Krishan Jain 42 taxmann.com 84 (P & H)

Intimation u/s 143(1) is regarded as an order for purposes of section 264; application u/s 264 is maintainable against intimation order. – Vijay Gupta 238 Taxman 505 (Delhi)No payment of prescribed fees cannot be ground for rejection of application u/s 264 – Vijay Gupta 238 Taxman 505 (Delhi)

Revision of other orders under section 264Slide62

REVISION

62

Where original assessment order had been revised u/s 264, order passed by Commissioner u/s 263 revising original assessment was void-ab-initio - New Mangalore Port Trust 382 ITR 434 (Karnataka)Where assessee sought to exclude some exempted income from total income, but by mistake omitted to do so, revision could not be denied - Sanchit Software & Solutions (P.) Ltd. 349 ITR 404 (Bombay) Dispute between partners of assessee-firm which ultimately, resulted in consent decree, was a sufficient cause for condoning delay in filing revision petition

- Narinder Kumar 24 taxmann.com 32 (Delhi)Where CIT relied on verification report of AO, copy of same was not furnished to petitioner, there was violation of natural justice, and order u/s 264 could not be sustained - Smt. Rekha

Saha

320 ITR 568 (Calcutta)

Revision of other orders under section 264Slide63

TIME LIMIT FOR COMPLETION OF ASSESSSMENT/ RE-ASSEESMENT/ REVISON

63

ASSESSMENTTIME LIMITScrutiny Assessment u/s 143(3) /Best Judgement Assessment u/s 14421 months from the end of relevant assessment year.33 months if referred to TPO.Income escaping assessment u/s 147

9 months from the end of financial year in which notice u/s 148 was served.Assessment in case of search u/s 153A / 153C

21 months from the end of

financial year in which

last of the

authorizations

for search or for

requisition

was

executed

33 months if referred to TPO.

Revision

order u/s 263

2 years

from the end of financial year in which order sought to be revised was passed

Revision

order u/s 264

1 year

from the end of the financial year in which such application is made by the assessee for revision

Slide64

After completion of

assessment / re-assessment / revision64

Reply to notice of demand with stay requestReply to keep the penalty proceeding in abeyance, if filing an appeal to CIT(A)

Verify if any mistake in the assessment order and file rectification petition under section 154

Steps to be taken after completion of Assessment / Re-Assessment / RevisionSlide65

Questions

?

Thanks

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20 August, 2016

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