Income Tax Scrutiny Assessment With ITRKendra

Income Tax Scrutiny Assessment

Income tax assessment is the procedure used to confirm the accuracy of the data a taxpayer has included in the returns they have submitted to the income tax department. After an assessee files an income tax return, the Income Tax agency conducts an assessment. The assessment is being done so that the Income Tax department can confirm that the return submitted is accurate in terms of the amount of taxable income declared and tax paid. Assessments for income taxes come in a variety of forms. In this post, we provide a brief explanation of the notion of a Section 143 scrutiny evaluation (3). Here is information about Section 143(1) income tax notices.

A thorough review of an income tax return that has been filed by a taxpayer is a scrutiny assessment under Section 143(3). During a scrutiny assessment, a tax officer will carry out numerous tests and procedures to verify the accuracy and legitimacy of the taxpayer's claims, deductions, and other items in their income tax return. A scrutiny evaluation aims to make sure that the taxpayer hasn't underestimated their income, calculated an excessive loss, or underpaid their taxes in any other way.

For the following situations, scrutiny assessment under Section 143(2) would be appropriate:

1. A Section 139 income tax return or a Section 142 answer to an income tax notification has been submitted (1).
2. In order to make sure that the taxpayer hasn't understated their income, calculated an excessive loss, or underpaid their income taxes in any way, the Assessing Officer or Income Tax Authority believes it necessary or expedient to conduct an audit.

Scrutiny Assessment Hearing

The concerned tax officer will give the assessment enough time to be heard and to present papers or evidence to support the information filed in a tax return while conducting a scrutiny assessment. The tax officer is permitted to carry out the best judgement assessment under section 144 in the event that the taxpayer refuses to cooperate or fails to provide the requested information.

If the taxpayer cooperates and provides information, the Assessing Officer will issue a decision after hearing/verifying the evidence and considering all the data provided by the taxpayer. The assessee has one of the following options following the Assessing Officer's passing of the order:

• accepting the decision made by the income tax authority, paying any tax due, receiving a refund, or accepting the determined loss
• If any clerical error continues, submit a claim for a refund under Section 154.
• can submit an application for a modification to the Commissioner of Income Tax under Section 263/264.
• Appeal the ruling