Income tax assessment is post-mortem and checking of your Income tax return and income by Income tax department as Income tax return is filed on the basis of self assessment by assessee.
There are mainly 3 types of assessment by Income tax department of your income:
1. Preliminary assessment u/s 143(1): It involves no interaction with assessee.
2. Regular scrutiny assessment u/s 143(3): It involves assessee providing information as called for by the assessing officer.
3. Income escaping assessment u/s 147: This is also known as re-assessment proceedings.
There is also one best judgement assessment u/s 144 wherein if assessee does not co-operate or attend proceedings mentioned above u/s 143(3) and 147, the assessing officer shall make best judgement assessment u/s 144.
In this post let’s talk about regular scrutiny assessment u/s 143(3):
Let’s talk about the regular scrutiny assessment for AY 2019-20: As per proviso to section 143(2) notice for regular scrutiny assessment needs to be sent within time limit of 6 months from the end financial year in which return is furnished. Relevant extract of this section is as under:
“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.”
Now, 6 months from the end of relevant financial year would be 30.09.2020 for AY 2019-20. However, parliament has passed “THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) BILL, 2020” after which all such due dates were extended to 31.03.2021 because of pandemic.
Now, the extended due date of 31.03.2021 has also expired and if Income tax department wanted to do any assessment for AY 2019-20, they would have issued the notice before 31.03.2021 but the number of people who have received such notice are very less and close to zero.
Further on 31.03.2021, government had further extended some due dates but the same was for notice u/s 148 and not for notice of regular assessment.
Hence, now no notice for regular assessment u/s 143(3) can be issued and there are various reasons as to why no such notice has been issued:
1. There is ongoing Covid pandemic and government don’t want to panic people with assessment.
2. Income tax officers were already occupied with completing assessment for AY 2018-19 and reassessment for AY 2013-14 due to extended due date.
3. With Finance Act, 2021 section 148 has been amended after which Income tax officer can now only open assessment for past 3 years and hence officers were busy opening assessment for period which were expiring before 01.04.2021. We have discussed the same in detail in our post.
4. Income tax officer’s can still open such cases under re-assessment proceedings u/s 148 under new provision where only information is required as compared to earlier where “reason to believe” was required for reopening any case.
Hence, many cases for AY 2019-20 would open in reassessment proceedings.
If you are the lucky one who has received notice for AY 2019-20 comment below and if you haven’t received notice till now don’t be happy as same can be opened in reassessment proceedings.