Section 143 of Income Tax Act "Assessment"
143. (1) Where a return has been made under section 139,
or in response to a notice under sub-section (1) of section
142, such return shall be processed in the following manner,
namely:-
(a) the total income or loss shall be computed after making
the following adjustments, namely:-
(i) any arithmetical error in the return;
(ii) an incorrect claim, if such incorrect claim is apparent
from any information in the return;
(iii) disallowance of loss claimed, if return of the
previous year for which set off of loss is claimed was
furnished beyond the due date specified under sub-section
(1) of section 139;-
(iv) disallowance of expenditure indicated in the audit
report but not taken into account in computing the total
income in the return;
(v) disallowance of deduction claimed under sections 10AA,
80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or section 80-IE, if the
return is furnished beyond the due date specified under
sub-section (1) of section 139; or
(vi) addition of income appearing in Form 26AS or Form 16A
or Form 16 which has not been included in computing the
total income in the return:
Provided that no such adjustments shall be made unless an
intimation is given to the assessee of such adjustments
either in writing or in electronic mode:
Provided further that the response received from the
assessee, if any, shall be considered before making any
adjustment, and in a case where no response is received
within thirty days of the issue of such intimation, such
adjustments shall be made:
Provided also that no adjustment shall be made under
sub-clause (vi) in relation to a return furnished for the
assessment year commencing on or after the 1st day of April,
2018;
(b) the tax , interest and fee, if any, shall be computed on
the basis of the total income computed under clause (a);
(c) the sum payable by, or the amount of refund due to, the
assessee shall be determined after adjustment of the tax ,
interest and fee, if any, computed under clause (b) by any
tax deducted at source, any tax collected at source, any
advance tax paid, 23[any relief allowable under section 89,]
any relief allowable under an agreement under section 90 or
section 90A, or any relief allowable under section 91, any
rebate allowable under Part A of Chapter VIII, any tax paid
on self-assessment and any amount paid otherwise by way of
tax , interest or fee;
(d) an intimation shall be prepared or generated and sent to
the assessee specifying the sum determined to be payable by,
or the amount of refund due to, the assessee under clause
(c); and
(e) the amount of refund due to the assessee in pursuance of
the determination under clause (c) shall be granted to the
assessee:
Provided that an intimation shall also be sent to the
assessee in a case where the loss declared in the return by
the assessee is adjusted but no tax , interest or fee is
payable by, or no refund is due to, him:
Provided further that no intimation under this sub-section
shall be sent after the expiry of one year from the end of
the financial year in which the return is made.
Explanation.-For the purposes of this sub-section,-
(a) "an incorrect claim apparent from any information in the
return" shall mean a claim, on the basis of an entry, in the
return,-
(i) of an item, which is inconsistent with another entry of
the same or some other item in such return;
(ii) in respect of which the information required to be
furnished under this Act to substantiate such entry has not
been so furnished; or
(iii) in respect of a deduction, where such deduction
exceeds specified statutory limit which may have been
expressed as monetary amount or percentage or ratio or
fraction;
(b) the acknowledgement of the return shall be deemed to be
the intimation in a case where no sum is payable by, or
refundable to, the assessee under clause (c), and where no
adjustment has been made under clause (a).
(1A) For the purposes of processing of returns under
sub-section (1), the Board may make a scheme for centralised
processing of returns with a view to expeditiously
determining the tax payable by, or the refund due to, the
assessee as required under the said sub-section.
(1B) Save as otherwise expressly provided, for the purpose
of giving effect to the scheme made under sub-section (1A),
the Central Government may, by notification in the Official
Gazette, direct that any of the provisions of this Act
relating to processing of returns shall not apply or shall
apply with such exceptions, modifications and adaptations as
may be specified in that notification; so, however, that no
direction shall be issued after the 31st day of March, 2012.
(1C) Every notification issued under sub-section (1B), along
with the scheme made under sub-section (1A), shall, as soon
as may be after the notification is issued, be laid before
each House of Parliament.
(1D) Notwithstanding anything contained in sub-section (1),
the processing of a return shall not be necessary, where a
notice has been issued to the assessee under sub-section
(2):
Provided that the provisions of this sub-section shall not
apply to any return furnished for the assessment year
commencing on or after the 1st day of April, 2017.
(2) Where a return has been furnished under section 139, or
in response to a notice under sub-section (1) of section
142, the Assessing Officer 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 Assessing
Officer or to produce, or cause to be produced before the
Assessing Officer 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.
(3) On the day specified in the notice issued under
sub-section (2), or as soon afterwards as may be, after
hearing such evidence as the assessee may produce and such
other evidence as the Assessing Officer may require on
specified points, and after taking into account all relevant
material which he has gathered, the Assessing Officer shall,
by an order in writing, make an assessment of the total
income or loss of the assessee, and determine the sum
payable by him or refund of any amount due to him on the
basis of such assessment:
Provided that in the case of a-
(a) research association referred to in clause (21) of
section 10;
(b) news agency referred to in clause (22B) of section 10;
(c) association or institution referred to in clause (23A)
of section 10;
(d) institution referred to in clause (23B) of section 10;
(e) fund or institution referred to in sub-clause (iv) or
trust or institution referred to in sub-clause (v) or any
university or other educational institution referred to in
sub-clause (vi) or any hospital or other medical institution
referred to in sub-clause (via) of clause (23C) of section
10,
which is required to furnish the return of income under
sub-section (4C) of section 139, no order making an
assessment of the total income or loss of such research
association, news agency, association or institution or fund
or trust or university or other educational institution or
any hospital or other medical institution, shall be made by
the Assessing Officer, without giving effect to the
provisions of section 10, unless-
(i) the Assessing Officer has intimated the Central
Government or the prescribed authority the contravention of
the provisions of clause (21) or clause (22B) or clause
(23A) or clause (23B) or sub-clause (iv) or sub-clause (v)
or sub-clause (vi) or sub-clause (via) of clause (23C) of
section 10, as the case may be, by such research
association, news agency, association or institution or fund
or trust or university or other educational institution or
any hospital or other medical institution, where in his view
such contravention has taken place; and
(ii) the approval granted to such research association or
other association or fund or trust or institution or
university or other educational institution or hospital or
other medical institution has been withdrawn or notification
issued in respect of such news agency or fund or trust or
institution has been rescinded :
Provided further that where the Assessing Officer is
satisfied that the activities of the university, college or
other institution referred to in clause (ii) and clause
(iii) of sub-section (1) of section 35 are not being carried
out in accordance with all or any of the conditions subject
to which such university, college or other institution was
approved, he may, after giving a reasonable opportunity of
showing cause against the proposed withdrawal to the
concerned university, college or other institution,
recommend to the Central Government to withdraw the approval
and that Government may by order, withdraw the approval and
forward a copy of the order to the concerned university,
college or other institution and the Assessing Officer:
Provided also that notwithstanding anything contained in the
first and the second provisos, no effect shall be given by
the Assessing Officer to the provisions of clause (23C) of
section 10 in the case of a trust or institution for a
previous year, if the provisions of the first proviso to
clause (15) of section 2 become applicable in the case of
such person in such previous year, whether or not the
approval granted to such trust or institution or
notification issued in respect of such trust or institution
has been withdrawn or rescinded.
(3A) The Central Government may make a scheme, by
notification in the Official Gazette, for the purposes of
making assessment of total income or loss of the assessee
under sub-section (3) 24[or section 144] so as to impart
greater efficiency, transparency and accountability by-
(a) eliminating the interface between the Assessing Officer
and the assessee in the course of proceedings to the extent
technologically feasible;
(b) optimising utilisation of the resources through
economies of scale and functional specialisation;
(c) introducing a team-based assessment with dynamic
jurisdiction.
(3B) The Central Government may, for the purpose of giving
effect to the scheme made under sub-section (3A), by
notification in the Official Gazette, direct that any of the
provisions of this Act relating to assessment of total
income or loss shall not apply or shall apply with such
exceptions, modifications and adaptations as may be
specified in the notification:
Provided that no direction shall be issued after the 31st
day of March, 25[2022].
(3C) Every notification issued under sub-section (3A) and
sub-section (3B) shall, as soon as may be after the
notification is issued, be laid before each House of
Parliament.]
Following sub-section (3D) shall be inserted after
sub-section (3C) of section 143 by the Taxation and Other
Laws (Relaxation and Amendment of Certain Provisions) Act,
2020, w.e.f. 1-4-2021 :
(3D) Nothing contained in sub-section (3A) and sub-section
(3B) shall apply to the assessment made under sub-section
(3) or under section 144, as the case may be, on or after
the 1st day of April, 2021.
(4) Where a regular assessment under sub-section (3) of this
section or section 144 is made,-
(a) any tax or interest paid by the assessee under
sub-section (1) shall be deemed to have been paid towards
such regular assessment ;
(b) if no refund is due on regular assessment or the amount
refunded under sub-section (1) exceeds the amount refundable
on regular assessment, the whole or the excess amount so
refunded shall be deemed to be tax payable by the assessee
and the provisions of this Act shall apply accordingly.
(5) [Omitted by the Finance Act, 1999, w.e.f. 1-6-1999.]
144. (1) If any person-
(a) fails to make the return required under sub-section (1)
of section 139 and has not made a return or a revised return
under sub-section (4) or sub-section (5) of that section, or
(b) fails to comply with all the terms of a notice issued
under sub-section (1) of section 142 or fails to comply with
a direction issued under sub-section (2A) of that section,
or
(c) having made a return, fails to comply with all the terms
of a notice issued under sub-section (2) of section 143,
the Assessing Officer, after taking into account all
relevant material which the Assessing Officer has gathered,
shall, after giving the assessee an opportunity of being
heard, make the assessment of the total income or loss to
the best of his judgment and determine the sum payable by
the assessee on the basis of such assessment :
Provided that such opportunity shall be given by the
Assessing Officer by serving a notice calling upon the
assessee to show cause, on a date and time to be specified
in the notice, why the assessment should not be completed to
the best of his judgment :
Provided further that it shall not be necessary to give such
opportunity in a case where a notice under sub-section (1)
of section 142 has been issued prior to the making of an
assessment under this section.
(2) 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.
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