Guidance on the Income Tax Assessment in Remand Procedures

The Tax Department examines the income tax return for its correctness and accuracy. The method of reviewing the return of payment by the Tax department is known as the assessment.

The assessment also requires the reassessment and Best judgment assessment U/s 144 under the Income Tax Act 1961.

Assessment in the remand proceedings

The remand proceeding is an important provision of the Income Tax Act 1961. Suppose that the income that would have been chargeable to tax due to some reason, disappeared from the assessment for a specific Assessment Year. The proceedings carried by the A.O  against the assessee shall be referred to as reassessment proceedings under the Income Tax Act.

While the authority to begin reassessment proceedings was granted to the A. O under section 147, which deals with the assessment of income escaping. In order to make a case for the initiating of a reassessment process against the assessee the A.O shall agree with the four important conditions laid down in section 147 under the Income Tax Act 1961. This includes the following:

• The reason to believe
• Establishment of Live Link
• Application in mind before the reasons for recording
• The Fulfillment of authority is required under section 151 for the issuance of a notice according to section 148 under the Income Tax Act 1961.

If the A. O. considers that some of the revenue has disappeared from the assessment, the A. O should record the factor that contributed to the formulation of such a belief.

A post recording the cause & identifying the connection shall seek, in writing, substantial satisfaction from the authorities as described in and mandated by U/s 151 under the Income Tax Act 1961.

if the reassessment is undertaken after 4 years. After receiving appropriate penalties U/s 151 under the Income Tax Act 1961 on income tax, the A. O shall send to the assessee a notice according to U/s 148 of under the Income Tax Act 1961., thus initiating a reassessment proceeding.

Via different judgments, courts across India have specified that the reasons set out by the A. O for the initiation of reassessment proceedings should be issued to the assessee, along with a notice under 148 of the Income Tax Act 1961.

However, the approach taken by the tax department is quite different. Generally, the letter referred to in section 148 of the Income Tax Act 1961 concerns the beginning of the reassessment proceedings submitted to the assessee without the causes reported by the assessor.

With the receipt of a notice according to section 148 of under the Income Tax Act 1961, the assessee may notify the A. O & review a copy of the reasons for the officer.

Objections raised by the assessee

The S. Court defined a proper tax procedure for the income tax & the assessee was to be followed by when initiation & dealing of a reassessment procedure. The assessee may object to the reasons provided by the A. O.

The Concern officer must take care of these objections and must dispose of them before beginning the reassessment by passing an order.

when a notice U/s 148 is released, the appropriate action is to file a return & to seek the reasons for issuing a notice.

The following points must be noted along with a copy of the reasons must be noted:

• A.O is obligated to provide the reasons within a fair reasonable time.
• A.O the receipt of the reason, the notice is eligible to file an objection to the issuance of the notice.
• A.O is obligated to dispose of the same by passing an order.

Remedies available to the Assessee

Passes an order without having disposed of the original objections raised by the assesse, Which has provided the assessee with the advantage of one of the below 2 things:

• Either the courts have in some cases, assigned the order passed by the A. O & directed the matter back to the A.O for the fresh disposal of the objections raised by the assesse, or
• In other cases, the reassessment proceedings shall be void initially by quashing the issue of a Notice U/s 148 for the commencement of reassessment proceedings.

Income Tax Assessment & Appeals 

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