Assessment of Income**
Self-Assessment and Filing of Return of Income
Due Dates for Filing Returns
As per the Income Tax Act, the due dates for filing returns of income vary based on the category of taxpayer:
- Individual / HUF (not liable to audit): 31st July of the assessment year
- Company / Firm (liable to audit): 31st October of the assessment year
- Assessee required to furnish transfer pricing report: 30th November of the assessment year
Filing after the due date may attract late fees under Section 234F and interest under Sections 234A, 234B, and 234C.
Forms of Return of Income
The appropriate form for filing income tax returns depends on the type and source of income:
| Form No. | Applicable For |
|---|---|
| ITR-1 (Sahaj) | Resident individuals with income up to ₹50 lakh (salary, one house property, other sources) |
| ITR-2 | Individuals and HUFs not having income from business/profession |
| ITR-3 | Individuals and HUFs having income from business/profession |
| ITR-4 (Sugam) | Presumptive income under sections 44AD, 44ADA, or 44AE |
| ITR-5 | Firms, LLPs, AOPs, BOIs |
| ITR-6 | Companies (not claiming exemption under Section 11) |
| ITR-7 | Persons required to file under Sections 139(4A) to 139(4D) |
Types of Assessment
Scrutiny Assessment
Under Section 143(3), scrutiny assessment is carried out when the return is selected for detailed examination. The Assessing Officer verifies the correctness of claims, deductions, income, etc.
Limited Scrutiny Assessment
In limited scrutiny cases, assessment is confined to specific issues flagged by the system. Broader issues are not examined unless converted to full scrutiny.
Non-Scrutiny Assessment
Also known as summary assessment under Section 143(1), where the return is processed electronically without human intervention. System automatically adjusts arithmetical errors, TDS mismatches, etc.
Best Judgment Assessment (Section 144)
If the taxpayer fails to furnish returns or comply with notices, the Assessing Officer can assess income to the best of his judgment based on available information.
Income Escaping Assessment (Section 147/148)**
If the AO believes any income has escaped assessment, he may reopen the case under Section 147. A notice under Section 148 is issued before reassessment.
Time Limits: Normally 3 years from the end of the relevant assessment year; extended up to 10 years in cases involving income escaping of ₹50 lakh or more (w.e.f. AY 2021-22).
Reassessment and Rectification (Section 154)**
Under Section 154, the AO may amend any order or intimation to rectify a mistake apparent from the record (arithmetical or factual errors).
Time Limit: Rectification can be made within 4 years from the end of the financial year in which the order sought to be rectified was passed.
Powers of Income Tax Authorities**
Powers of Survey (Section 133A)
The Income Tax Department may conduct surveys at business or professional premises to verify income declarations. Key features include:
- Conducted during business hours at business or professional premises only
- Used to inspect books of account, cash, stock, and other valuables
- Authorities cannot seize cash or assets, but can make an inventory
- Purpose is to gather information for verifying income and expenses
Surveys cannot be conducted at residential premises unless linked to business.
Powers of Search and Seizure (Section 132)
Search and seizure is a more serious measure where the Income Tax Department has reason to believe that:
- A person has not disclosed income or is in possession of undisclosed assets
- Books or documents important to assessment may be hidden
Powers include:
- Entering and searching any premises
- Seizing books of account, documents, jewellery, or money
- Making inventories and examining persons under oath
This action can be carried out with prior approval of higher authorities such as Director General or Chief Commissioner.
Powers of Requisition (Section 132A)
When assets or documents are held by other authorities (e.g., police, customs), the Income Tax Department can requisition them through Section 132A.
Requisition is allowed if:
- It is believed the assets represent undisclosed income
- It is not possible to carry out search directly
The requisitioned authority is legally bound to hand over the assets to the Income Tax Officer.
Power to Call for Information (Section 133)
Under this section, the income tax authorities may:
- Call for information from banks, companies, or individuals
- Seek statements of accounts, bank records, or proof of transactions
- Issue notices requiring compliance
These powers help gather information necessary for assessment or investigation. Non-compliance may result in penalties.