Section 142 of Income Tax Act "Inquiry before assessment"
142. (1) For the purpose of making an assessment under
this Act, the Assessing Officer may serve on any person who
has made a return under section 115WD or section 139 or in
whose case the time allowed under sub-section (1) of section
139 for furnishing the return has expired a notice requiring
him, on a date to be therein specified,-
(i) where such person has not made a return within the time
allowed under sub-section (1) of section 139 or before the
end of the relevant assessment year, to furnish a return of
his income or the income of any other person in respect of
which he is assessable under this Act, in the prescribed
form and verified in the prescribed manner and setting forth
such other particulars as may be prescribed, or :
Provided that where any notice has been served under this
sub-section for the purposes of this clause after the end of
the relevant assessment year commencing on or after the 1st
day of April, 1990 to a person who has not made a return
within the time allowed under sub-section (1) of section 139
or before the end of the relevant assessment year, any such
notice issued to him shall be deemed to have been served in
accordance with the provisions of this sub-section,
(ii) to produce, or cause to be produced, such accounts or
documents as the Assessing Officer may require, or
(iii) to furnish in writing and verified in the prescribed
manner information in such form and on such points or
matters (including a statement of all assets and liabilities
of the assessee, whether included in the accounts or not) as
the Assessing Officer may require :
Provided that-
(a) the previous approval of the Joint Commissioner shall be
obtained before requiring the assessee to furnish a
statement of all assets and liabilities not included in the
accounts;
(b) the Assessing Officer shall not require the production
of any accounts relating to a period more than three years
prior to the previous year.
(2) For the purpose of obtaining full information in respect
of the income or loss of any person, the Assessing Officer
may make such inquiry as he considers necessary.
(2A) If, at any stage of the proceedings before him, the
Assessing Officer, having regard to the nature and
complexity of the accounts, volume of the accounts, doubts
about the correctness of the accounts, multiplicity of
transactions in the accounts or specialised nature of
business activity of the assessee, and the interests of the
revenue, is of the opinion that it is necessary so to do, he
may, with the previous approval of the Principal Chief
Commissioner or Chief Commissioner or Principal Commissioner
or Commissioner, direct the assessee to get the accounts
audited by an accountant, as defined in the Explanation
below sub-section (2) of section 288, nominated by the
Principal Chief Commissioner or Chief Commissioner or
Principal Commissioner or Commissioner in this behalf and to
furnish a report of such audit in the prescribed form duly
signed and verified by such accountant and setting forth
such particulars as may be prescribed and such other
particulars as the Assessing Officer may require :
Provided that the Assessing Officer shall not direct the
assessee to get the accounts so audited unless the assessee
has been given a reasonable opportunity of being heard.
(2B) The provisions of sub-section (2A) shall have effect
notwithstanding that the accounts of the assessee have been
audited under any other law for the time being in force or
otherwise.
(2C) Every report under sub-section (2A) shall be furnished
by the assessee to the Assessing Officer within such period
as may be specified by the Assessing Officer :
Provided that the Assessing Officer may, suo motu, or on an
application made in this behalf by the assessee and for any
good and sufficient reason, extend the said period by such
further period or periods as he thinks fit; so, however,
that the aggregate of the period originally fixed and the
period or periods so extended shall not, in any case, exceed
one hundred and eighty days from the date on which the
direction under sub-section (2A) is received by the assessee.
(2D) The expenses of, and incidental to, any audit under
sub-section (2A) (including the remuneration of the
accountant) shall be determined by the Principal Chief
Commissioner or Chief Commissioner or Principal Commissioner
or Commissioner (which determination shall be final) and
paid by the assessee and in default of such payment, shall
be recoverable from the assessee in the manner provided in
Chapter XVII-D for the recovery of arrears of tax :
Provided that where any direction for audit under
sub-section (2A) is issued by the Assessing Officer on or
after the 1st day of June, 2007, the expenses of, and
incidental to, such audit (including the remuneration of the
Accountant) shall be determined by the Principal Chief
Commissioner or Chief Commissioner or Principal Commissioner
or Commissioner in accordance with such guidelines as may be
prescribed and the expenses so determined shall be paid by
the Central Government.
(3) The assessee shall, except where the assessment is made
under section 144, be given an opportunity of being heard in
respect of any material gathered on the basis of any inquiry
under sub-section (2) or any audit under sub-section (2A)
and proposed to be utilised for the purposes of the
assessment.
(4) The provisions of this section as they stood immediately
before their amendment by the Direct Tax Laws (Amendment)
Act, 1987 (4 of 1988), shall apply to and in relation to any
assessment for the assessment year commencing on the 1st day
of April, 1988, or any earlier assessment year and
references in this section to the other provisions of this
Act shall be construed as references to those provisions as
for the time being in force and applicable to the relevant
assessment year.
Section 142Aof Income Tax Act "Estimation of value of assets by Valuation Officer"
142A. (1) The Assessing
Officer may, for the purposes of assessment or reassessment,
make a reference to a Valuation Officer to estimate the
value, including fair market value, of any asset, property
or investment and submit a copy of report to him.
(2) The Assessing Officer may make a reference to the
Valuation Officer under sub-section (1) whether or not he is
satisfied about the correctness or completeness of the
accounts of the assessee.
(3) The Valuation Officer, on a reference made under
sub-section (1), shall, for the purpose of estimating the
value of the asset, property or investment, have all the
powers that he has under section 38A of the Wealth-tax Act,
1957 (27 of 1957).
(4) The Valuation Officer shall, estimate the value of the
asset, property or investment after taking into account such
evidence as the assessee may produce and any other evidence
in his possession gathered, after giving an opportunity of
being heard to the assessee.
(5) The Valuation Officer may estimate the value of the
asset, property or investment to the best of his judgment,
if the assessee does not co-operate or comply with his
directions.
(6) The Valuation Officer shall send a copy of the report of
the estimate made under sub-section (4) or sub-section (5),
as the case may be, to the Assessing Officer and the
assessee, within a period of six months from the end of the
month in which a reference is made under sub-section (1).
(7) The Assessing Officer may, on receipt of the report from
the Valuation Officer, and after giving the assessee an
opportunity of being heard, take into account such report in
making the assessment or reassessment.
Explanation.-In this section, "Valuation Officer" has the
same meaning as in clause (r) of section 2 of the Wealth-tax
Act, 1957 (27 of 1957).
What is Disclosure of information respecting assessees? Section 138 of Income Tax Act 1961
What is Return of income? Section 139 of Income Tax Act 1961
What is Permanent account number? Section 139A of Income Tax Act 1961
What is Assessment? What is Best judgment assessment? Section 143 and 144 of Income Tax Act 1961
What is Reference to dispute resolution panel? Section 144C of Income Tax Act 1961